A Connecticut Superior Court judge has overturned the state’s rejection of Eversource Energy’s proposed $2.4 billion sale of Aquarion Water Co., ruling that regulators illegally blocked governance structures explicitly authorized by the General Assembly.
New Britain Superior Court Judge Matthew Budzik sustained the utilities’ appeal Thursday and remanded the case to the Public Utilities Regulatory Authority for further proceedings, though he stopped short of ordering PURA to approve the deal.
The ruling represents a significant victory for Eversource, the South Central Connecticut Regional Water Authority (RWA) and the Aquarion Water Authority (AWA), which argued PURA exceeded its statutory authority when it unanimously denied their change-of-control application Nov. 19.
PURA rejected the sale citing three main concerns: an 11-member board structure that would create conflicting fiduciary duties for directors overseeing both AWA and RWA; weighted voting rules that would give 30 of 59 municipalities zero voting power; and the creation of an Office of Consumer Affairs that lacked sufficient independence compared to the state’s Office of Consumer Counsel.
The court found those governance elements were mandated by Public Act No. 24-1, which the legislature passed in a June 2024 special session authorizing the transaction.
“The court holds that PURA has no authority to overrule, or to ignore the explicit, plain decisions made by the legislature and set forth expressly in statute,” Budzik’s decision states.
However, the judge emphasized that PURA retains regulatory authority over issues not specifically dictated by the statute, including the Office of Consumer Affairs’ staffing levels, budget and degree of independence.
The proposed deal would transfer Aquarion — Connecticut’s largest water utility serving about 695,000 customers in 57 municipalities — from publicly traded Eversource to AWA, a nonprofit, quasi-public entity modeled after New Haven-based RWA.
The $2.4 billion transaction includes $1.6 billion in cash and $800 million in net debt.
In a joint statement, Aquarion and AWA said the ruling “provides a path forward which we believe should be focused on collaboration and reaching a practical resolution that supports long-term infrastructure investment, protects customers and ensures safe, reliable water service across Connecticut.”
“We appreciate the Court’s direction and will continue engaging with PURA and all stakeholders as this matter moves forward,” the statement said.
Opposition to the sale has been widespread. Attorney General William Tong argued the proposal would sharply raise household water bills and remove regulatory oversight from PURA.
The state Department of Public Health, regional planning agencies, several Fairfield County municipalities, Save the Sound and Connecticut Water Co. also urged PURA to reject the transaction.
On Thursday afternoon, Tong said he is “reviewing the decision and evaluating next steps.”
“But this remand does not change the fundamental truth of this transaction — it’s a costly loser for Connecticut families and it shouldn’t happen,” Tong said.
Rate projections in the application showed annual increases of 6.5% to 8.35% through 2035. RWA’s existing rates are currently 19% to 39% higher than Aquarion’s rates.
Following PURA’s denial, Aquarion filed notice it would seek an $88 million rate increase — a 42% average hike — explicitly blaming regulators for blocking the sale. The company said the increase would have been limited to $18 million under the AWA nonprofit model.
Eversource appealed PURA’s decision in Superior Court on Dec. 2.
PURA now must reconsider the application consistent with the court’s ruling. The authority’s timeline for making a new determination was not immediately clear.
Eversource acquired Bridgeport-based Aquarion in 2017.
