🔒CT water utilities face hundreds of millions in PFAS compliance costs that could reshape industry

For decades, firefighting foam used at military bases, airports and training facilities across Connecticut seeped into soil and groundwater, contaminating drinking water sources with so-called “forever chemicals.” Now, water utilities are confronting the cost of removing them. Connecticut’s largest water companies are advancing plans to comply with new federally enforceable drinking water standards for PFAS, or per- and polyfluoroalkyl substances. The U.S. Environmental Protection Agency has set a 2029 deadline for mitigation. The price tag: hundreds of millions of dollars. The spending wave, experts said, is reshaping an industry already grappling with aging infrastructure and a fragmented network of small, financially constrained water systems — dynamics that could accelerate consolidation. The EPA established maximum contaminant levels for several PFAS compounds in 2024, marking the first nationwide enforceable limits. While the agency is considering extending the compliance deadline to 2031, Bridgeport-based Aquarion Water Co. and Connecticut Water Co. say they are planning for whichever timeline ultimately applies.

Craig Patla, president and CEO of Clinton-based Connecticut Water, described the current moment as one of “unprecedented complexity” as PFAS mitigation, aging infrastructure and increasingly severe climate events converge. He noted the American Society of Civil Engineers gives the nation’s water infrastructure a C-minus, and water mains installed between 100 and 150 years ago are approaching the end of their useful lives. “We’ve got to be in front of that, knowing what our role is in providing clean drinking water for the communities that we serve,” Patla said in a recent interview with the Hartford Business Journal.

What are PFAS?

PFAS — a class of thousands of synthetic chemicals used in products such as nonstick cookware, food packaging and firefighting foam — are known as forever chemicals because they do not break down easily in the environment. Certain PFAS compounds have been linked to kidney and testicular cancer, thyroid disease, immune system suppression and developmental effects in children. For water utilities, the EPA’s new standards represent more than a compliance exercise. Patla said drinking water systems are the first large-scale infrastructure designed to systematically remove PFAS from the environment — an effort that will likely expand over time to wastewater and other contamination pathways. “Water represents, really, the first ability to remove PFAS from the environment,” he said. “But to be clear, these compounds remain in the environment. This is just the first of what hopefully will be many opportunities to remove it.”

Compliance

The impact of PFAS remediation varies widely across Connecticut’s highly fragmented water landscape, which includes over 2,300 water systems ranging from large investor-owned utilities to small homeowner associations serving only a handful of customers. Aquarion and Connecticut Water — both owned by publicly traded utilities — face steep price tags because they rely heavily on groundwater wells, where contamination is most prevalent. By contrast, the Metropolitan District Commission, which serves Hartford and surrounding towns, draws entirely from protected surface water reservoirs and has not detected PFAS, a spokesman said. The South Central Connecticut Regional Water Authority, serving much of Greater New Haven, sources about 80% of its supply from surface reservoirs and reports little detectable PFAS. Aquarion, which serves more than 60 Connecticut municipalities and 236,000 customer accounts, has identified 31 of its 106 wells and surface-water supplies that require PFAS treatment. Eight projects costing about $20 million are complete. The company, which is owned by Eversource Energy, projects another $88 million in mitigation through 2031, excluding a planned $40 million to $50 million replacement of its aging Putnam surface water treatment plant in Greenwich. In total, Aquarion’s exposure approaches $150 million. Connecticut Water, owned by California-based H2O America, faces similar scale. The company, which serves 60 towns and operates 235 active wells and 18 surface water supplies, relies on groundwater for roughly 72% of its daily demand. It has detected PFAS above federal limits at 26 sources and estimates roughly $200 million in total PFAS spending over time.

Aquarion President Lucy Teixeira notes that water utilities are being tasked with removing contamination caused by other industries. “We didn’t cause the contamination — we have to help remove it,” Teixeira said. “But it doesn’t mean we’ve been lax in any way.”

Treatment strategy

To meet the new standards, utilities are installing filtration systems at affected wells and treatment plants or, in some cases, shutting down contaminated sources and connecting them to cleaner supplies. Most filtration systems rely on either activated carbon — which filters PFAS from large volumes of water — or ion exchange resin, a more compact treatment often used at groundwater wells. In certain cases, the most cost-effective solution is interconnection: taking a contaminated well offline and extending a water main to a nearby PFAS-free source. Four of Aquarion’s eight completed projects have used that approach. “When you look at your cost in the short term and long term, if it’s not too far (to extend a water main), it definitely makes the difference,” said Daniel Lawrence, Aquarion’s vice president of engineering, planning and real estate. Connecticut Water is applying that approach in Madison, extending a main roughly one mile to connect its 26-customer Green Springs system to a PFAS-free source in Guilford rather than constructing a standalone treatment facility. Meanwhile, national demand for PFAS treatment equipment has strained supply chains, driving up costs and compressing timelines as utilities race toward compliance deadlines. “Every water company has to provide some degree of treatment, and there are only so many suppliers of the equipment required,” said Patla, the Connecticut Water CEO. “You have to have secured procurement of them by now to have any reasonable confidence in meeting a 2029 compliance date — which is precisely why there’s heavy pressure on EPA to extend the deadline.”

Paying for it

Utilities are financing PFAS upgrades through a number of ways, including low-interest federal loans and subsidies under the Bipartisan Infrastructure Law. Litigation against PFAS manufacturers has provided partial offsets. Aquarion has received $15.5 million from settlements with 3M and DuPont and expects roughly $25 million in total recoveries. Connecticut Water received about $7.6 million in 2025 from the same settlements, with additional payments anticipated over nine years. Even so, significant costs will be recovered from water customers. Last year, state lawmakers approved a new surcharge — called the Water Quality and Treatment Adjustment — that allows water companies to begin recovering PFAS-related capital costs as projects move forward. The approach spreads the expense over time instead of concentrating it in a single year. “That’s one of the benefits of having these surcharges — it avoids rate shock for customers,” Teixeira said. Connecticut Water has filed to begin recovering PFAS planning and engineering costs incurred through 2025. If regulators approve the request, the surcharge could begin appearing on customers’ bills in April. Water companies can also recoup costs through the state’s regular rate adjustment process.

Consolidation pressure

The capital demands, industry executives said, are intensifying consolidation pressure across the state’s water sector. Many small systems lack the financial capacity to absorb PFAS treatment costs, prompting inquiries about acquisitions or interconnection agreements. “(They) are coming to realize that installing treatment is going to be cost-prohibitive,” Lawrence said. Teixeira said Aquarion receives roughly a dozen inquiries annually from small systems — often local taxing districts serving 50 to 500 customers. Connecticut Water has already moved on that trend. The company acquired the Miami Beach water system in Old Lyme in 2022, and is in the process of folding the Shaker Heights system in Enfield into its northern Connecticut network. Connecticut Water and Aquarion, as investor-owned utilities, can raise capital through equity markets to finance large infrastructure programs — an advantage many small systems lack. However, that dynamic could change for Aquarion. Eversource Energy has proposed selling the utility in a $2.4 billion deal to the South Central Connecticut Regional Water Authority and a newly created Aquarion Water Authority, which would operate as a quasi-public entity. The controversial deal was rejected by the Public Utilities Regulatory Authority last year and is now under appeal. If approved, Teixeira would continue leading the company. As a quasi-public entity, Aquarion would gain access to tax-exempt municipal bonds, reducing its cost of capital. Water executives said PFAS mitigation underscores broader pressures on the industry, including aging infrastructure and emerging contaminants that will require sustained capital investment. “If we don’t take a proactive approach to replacement, the day of reckoning will arrive,” Patla said. “It can’t be about low rates. Low rates mean you’re not investing, you’re not being a proper steward. It’s not about low rates — it’s about correct rates.”