Special legislative sessions have become the norm in Connecticut politics. It seems almost every year state policymakers feel too confined by a part-time legislature that meets for only three or five months annually, so they add an extra session in the offseason to vote on, and usually pass, bills that address seemingly pressing issues. Special […]
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Special legislative sessions have become the norm in Connecticut politics.
It seems almost every year state policymakers feel too confined by a part-time legislature that meets for only three or five months annually, so they add an extra session in the offseason to vote on, and usually pass, bills that address seemingly pressing issues.
Special sessions aren’t inherently a bad thing, but the most recent one that took place in late June set a bad precedent, even though most of the policies passed by the House and Senate were considered pro-business.
The biggest concern was the Democratic-led passage of an unvetted proposal that allows the South Central Connecticut Regional Water Authority to make a bid for and potentially purchase Bridgeport-based Aquarion Water Co., which was put up for sale earlier this year by parent company Eversource Energy.
Lawmakers approved the proposal without a public hearing or any other type of vetting. It was a deal done behind closed doors, anathema to good governance.
Unknown is the potential tie-ups’ impact on consumer rates, the water supply industry’s competitive landscape and other issues.
According to the Connecticut Mirror, the Regional Water Authority was created by a special act of the General Assembly in 1977, and needed new enabling legislation to expand outside its current territory of New Haven and about 20 suburbs.
The Regional Water Authority’s Director of Public Affairs Kevin Watsey told the Mirror that the acquisition of Aquarion would make sense because it would provide “improved economies of scale, operational efficiencies, a broader focus on customer service and community support, as well as lower cost of capital, access to a broader customer base for commercial offerings to reduce water rate increases, and access to a deep and talented pool of individuals living within the region.”
Republicans unsuccessfully attempted to block the proposal, which was a late addition to the special session agenda, arguing they didn’t have enough time to weigh its consequences.
The GOP’s concerns were well-founded.
More guardrails are needed around what can or can’t be done during a special session. At the very least, if a bill is new and hasn’t received a public hearing, some extra time should be allotted for proper vetting.
To be fair, expanding the Regional Water Authority’s territory could end up being good public policy that consumers and regulators embrace. And if the authority does end up making a bid on Aquarion, the deal will get regulatory oversight.
But what’s to stop future legislatures from hurriedly adopting unvetted proposals in a special session that could hurt the state’s economic competitiveness, or result in some other negative long-term consequences?
Past influence
So, why do I believe the public could end up supporting the Regional Water Authority’s ability to potentially acquire Aquarion?
It’s about having local control of the state’s water supply business.
That became a major issue just a few years ago, when California-based SJW Group in 2019 completed its $1.1 billion purchase of Clinton-based Connecticut Water Co., which provides water services to more than 107,000 customers in 60 Connecticut towns.
That acquisition raised many concerns in Connecticut, particularly around having an out-of-state company controlling a significant stake in the state’s water supply system.
The on-again, off-again deal went through many ups and downs before ultimately being approved by state regulators.
At one point, the Public Utilities Regulatory Authority signaled it would block the deal, arguing it would leave Connecticut Water in worse condition both “financially and managerially.”
That forced SJW and CT Water to withdraw their merger application and return months later with a revised deal structure and additional commitments to sweeten the offer for Connecticut ratepayers.
PURA eventually approved the acquisition with conditions that required SJW to maintain a regional headquarters and management team in Connecticut, in addition to minimum in-state employee counts.
PURA also placed restrictions on CT Water/SJW drawing on its local water sources to supply systems or customers outside of Connecticut.
I suspect state lawmakers have concerns about another out-of-state company swooping in to purchase Aquarion, leaving more Connecticut water customers susceptible to out-of-state influences.
In fact, SJW-owned Connecticut Water Co. told the Mirror it’s considering a bid to purchase Aquarion.
Still, more time should have been granted to vet the change to the Regional Water Authority’s charter. That’s how the legislative process is supposed to work.
