Water Co. tax refund to lower rates

State regulators recently approved a $10 million federal tax refund for Connecticut Water Co., based on new procedures at the Internal Revenue Service.

With an influx in credit, customer rates are expected to decrease by 6.5 percent, beginning April 2014.

Under new regulations that no longer require repair and maintenance spending to be capitalized for tax purposes, Connecticut Water applied for a refund on taxes collected on repairs going back to 2010. In a settlement negotiated with the state attorney general and consumer counsel, the company has agreed to lower customer rates until at least 2015.

State officials are now looking into more possible federal tax refunds on other public utility companies.