The four official intervenor municipalities in the change of control for Aquarion Water Co. by Eversource Energy oppose an offer of compromise by the water utility applicants because it doesn’t address any of the concerns the town have.
The towns of Fairfield, New Canaan, Ridgefield and Westport filed an objection with the state Public Utilities Regulatory Authority (PURA) on Oct. 10 asking the regulator to deny the compromise motion that would apparently save ratepayers about $27 million.
“The intervenors hereby object to the Motion to Approve Offer of Compromise, Motion No. 31, filed in the proceeding by the Aquarion Water Authority, the South Central Regional Water Authority and Eversource Energy on Oct. 1, 2025,” the official objection read.
“Although the Applicants claim that the Offer of Compromise was a memorialization of commitments resulting from ‘numerous discussions on various matters related to the Application and the Transaction with the parties and intervenors,’” the objection continued, “… the Applicants have made little effort to negotiate meaningfully with the Towns.”
In the objection filed by attorney David Ball and Wilson Carroll of Cohen and Wolf P.C. in Bridgeport, the towns raised four main points for turning down the compromise:
- PURA’s oversight, including the prudency requirement, would still be eliminated
- The state Office of Consumer Counsel (OCC) would still be replaced with a “powerless and understaffed” OCC
- PILOT (payment in lieu of taxes) are still an inadequate substitute for property taxes
- The proposed Special Transition Committee is “unworkable, inconsistent” with the enabling legislation and does not result in equal representation for AWA customers.
The reason for the change of control application in the first place is the $2.4 billion sale of Aquarion Water Co. to the newly formed Aquarion Water Authority by Eversource Energy. The acquisition made in the spring has the South Central Regional Water Authority (RWA) taking control of the company with a board that gives them a majority of directors.
Soon after the proposed acquisition was announced Westport First Selectman Jen Tooker and the late Fairfield First Selectman signed on to become intervenors in the PURA change of control application. They surmised that the legislative process that created the Aquarion Water Authority (AWA) to “buy” Aquarion Water through RWA was “specious” and that the financing that will be used to carry out the transaction will saddle the new authority with such debt that it will have no choice to substantially raise water rates.
The compromise
Following a recent PURA hearing, AWA, RWA and Eversource filed an Offer of Compromise that includes such conditions enforceable by PURA that addresses issues related to rates, governance, and other areas:
- Eversource agrees to contribute $10 million for the AWA Rate Stabilization Fund to be used as a rate credit to partially offset the impact of one or more rate changes that will occur after closing, exclusively for the benefit of AWA customers. The availability of these funds will be enforceable by PURA as a condition precedent to closing, such that Eversource will need to provide documentation of the designated interest-bearing account with a $10 million balance in advance of the close.
- AWA will not remove the $16.8 million in annual rate credits that are currently included in AWCCT’s rates. These rate credits will remain in AWC-CT’s rates in perpetuity. The credits include (a) reduced revenue requirement associated with the accumulated deferred income taxes ($3.5 million); (b) reduced revenue requirement associated with excess accumulated deferred income taxes (EADIT) ($4.8 million annually); (c) the annual credit instituted July 31, 2024 to return the EADIT balance to customers ($2.8 million annually) (for a total EADIT credit of $7.6 million); and (d) refund of income-tax expense resulting from the 2017 Tax Cuts and Jobs Act, lowering the corporate tax rate from 35% to 21 % ($5.7 million annually).
- AWA will create a Special Transition Committee to support the knowledge transfer and training on all aspects of the authority model. The STC will establish a transition plan and associated criteria to demonstrate that AWA has achieved “steady state” in its conversion to the authority model.
In its Oct. 1 Motion to Approve Offer of Compromise written by attorney Bruce McDermott of Harris Beach Murtha of New Haven, the applicants stated their reason for going ahead with the motion.
“Despite the Applicants’ best efforts to work with the other parties and intervenors to address their concerns and to educate them on the proposals and other commitments, no party or intervenor is willing to provide a substantive counter-proposal to the Applicants in an effort to resolve the issues in this proceeding,” the filing read.
In addition to the opposition by the intervenors PURA received objections to the compromise motion from Save the Sound, the National Association of Water Companies and Connecticut Water Co.
