Twenty-six mayors and first selectmen across Connecticut have formally opposed Eversource Energy’s proposed $2.4 billion sale of Aquarion Water Co. to a newly created nonprofit authority.
If approved, Aquarion would be owned by Aquarion Water Authority (AWA), an affiliate of the South Central Regional Water Authority (RWA) in New Haven. Currently, Aquarion is the largest water utility in the state, serving about 722,000 people across 62 municipalities.
The municipal leaders cite concerns over significant rate increases, loss of regulatory oversight and reduced accountability. Similar concerns have been raised by Attorney General William Tong and Consumer Counsel Claire Coleman, who have also come out against the deal.
The transaction requires approval from the state Public Utilities Regulatory Authority (PURA), which oversees Aquarion.
In a letter to PURA, the municipal coalition urges the regulatory agency to reject the proposed sale “and uphold its responsibility to protect the interests of Connecticut consumers.”
The letter was signed by the leaders of municipalities served by Aquarion, including Bridgeport, Stamford, Norwalk, Greenwich, Danbury and Fairfield, among others.
The coalition, organized by the Western Connecticut Council of Governments (WestCOG) and Connecticut Metropolitan Council of Governments (MetroCOG), argues that RWA customers already pay 30% more for water than Aquarion customers.
They project that rates for current Aquarion customers could increase by 65% over the next decade to help finance the acquisition.
“This deal is not in the public interest of the communities we represent,” said Francis Pickering, executive director of WestCOG. “It offers no benefit to our residents and instead threatens them with soaring costs and a complete loss of the public accountability that PURA has long provided.”
Eversource and AWA both dispute claims about rate increases. Previously, AWA told the Hartford Business Journal that the nonprofit model would benefit customers through access to lower-cost financing.
“Regardless of ownership, any future rate changes for local water customers will be a function of the costs of significant investments needed to meet federal and state environmental regulations, including remediation of forever chemicals in our water supply,” Eversource and AWA said in a joint statement last week.
They pointed to an analysis presented to PURA showing that customers under the AWA model will pay less over the next 10 years due to lower financing costs for investment and other lower costs associated with authority ownership.
Another concern of opponents centers on regulatory oversight. Unlike private utilities regulated by PURA, RWA operates without independent state oversight of rate-setting, service quality or infrastructure investment. The sale would eliminate Aquarion customers’ access to PURA’s Customer Affairs Resolution Center for resolving service complaints.
The proposed governance structure would leave Aquarion service areas with minority representation despite covering a larger territory and asset base, the coalition’s letter states. Under the plan, RWA would appoint six of 11 board members, while only five would represent the Aquarion service territory.
Critics say the lopsided structure would give RWA the power to set rates for AWA customers, despite RWA’s smaller size.
“The governance structure is fundamentally inequitable and creates a new government entity that hands decision-making power for our region’s water supply to those outside the region,” said Matthew Fulda, executive director of MetroCOG.
