Connecticut Water Co. wants to raise rates 21.4%, and the regulator that will decide whether it can has been almost completely remade since the utility’s last rate case.
The Clinton-based utility, which serves more than 108,000 customers across 60 communities, filed its application in May, seeking to increase annual revenues by about $28.8 million.
In an interview at the Hartford Business Journal’s offices, company President Craig J. Patla described the request as overdue and largely uncontroversial, and said he is cautiously optimistic a reconstituted Public Utilities Regulatory Authority will give it a fair hearing.
Connecticut Water filed a letter of intent to raise rates in March, estimating an increase of 19%, but Patla said the request grew as the company updated demand projections that helped drive the filing.
He cautioned that rate cases rarely end where they begin, with authorized returns on equity and other contested figures typically changing before a final decision is issued.
About half of the requested increase would recover roughly $129 million the company has invested in its system since its last rate case three years ago. The remainder would cover rising operating costs, including wages, insurance, chemicals, fuel and electricity, Patla said.
Power is among the company’s largest expenses, Patla said, meaning water bills are affected by the same electricity costs driving higher utility rates elsewhere.
The biggest looming cost is PFAS, also known as “forever chemicals,” which are synthetic compounds that don’t break down in the environment or the human body and have been linked to cancer and other health problems.
Federal regulators have set a limit of 4 parts per trillion for two PFAS compounds that are already widespread in the environment and in people’s bodies, Patla said.
To comply with the standard, Connecticut Water has planned 41 treatment projects costing about $200 million. The company is working toward the current federal compliance deadline of April 2029, though the U.S. Environmental Protection Agency has proposed extending that deadline to 2031.
Aging infrastructure is another challenge facing water utilities.
Some of Connecticut’s water mains date to the years following the Civil War, Patla said, while many older cities continue to rely on pipes installed before World War II.
Connecticut Water replaces about 1% of its 1,800 miles of water main annually, a pace that would replace the entire system roughly every 100 years.
Many utilities fall well short of that pace, Patla said.
Older systems often rely on mains that have been repeatedly patched until they fail. Patla pointed to a major Waterbury water main break in December that disrupted businesses during a critical holiday season.
Climate change is the third strain on water utilities.
Along the shoreline, Patla said wells in the company’s Guilford system are drawing increasingly brackish water as rising sea levels push salt farther upstream into rivers and tributaries feeding Long Island Sound. The company has responded by building treatment facilities capable of removing salt from water sources that historically did not require such treatment.
“You can argue politically about the cause, but you cannot argue it isn’t happening, because we’re seeing it,” he said.
Seeking acceptance
Meantime, the rate case arrives at a significant moment for Connecticut’s utility industry.
Former PURA Chair Marissa Gillett, who became openly adversarial with utilities, resigned in October.
Gov. Ned Lamont rebuilt the authority with four new members, naming a former Office of Consumer Counsel attorney, Thomas Wiehl, as chair. Patla said his company has met the new commissioners and found a more constructive tone, with Wiehl encouraging the company to think creatively while remaining mindful of affordability concerns.
During Gillett’s tenure, Patla said credit agencies downgraded utilities across the state in 2024 and 2025 after watching PURA rulings go against them. Those downgrades increased borrowing costs even for utilities not actively pursuing rate increases, he said.
Connecticut Water’s earned return on equity has ranged between 6% and 7%, and the company typically files a new rate case once that figure falls below about 6%, Patla said.
In its last rate case, Connecticut Water sought an increase of about 18%. PURA ultimately approved a 5.45% increase in 2024 and set the company’s return on equity at 9.3%, below the 10.5% return it requested.
Patla said Connecticut Water fared better than many of its peers, but still fell short of achieving its target return.
Patla said he would like to explore phasing in any approved increase over several years to lessen the impact on customers. The proposed rates would take effect Feb. 1, 2027.
Patla acknowledged that winning public support for higher rates is difficult.
“We’re not asking people to like it,” he said. “But if we can get them to understand it, maybe acceptance follows.”
