CT is in the middle of major water fight. What the sides contend, including that ‘the deal stinks.’
Republican state senators and local mayors are calling for the state’s utility regulatory board to block the planned sale of the state’s largest water company that serves 59 towns from Greenwich to Stonington to Granby.
The senators said that regulators should reject the sale by Eversource Energy of its Aquarion water subsidiary for $2.4 billion, saying that the deal would cause future rate increases and property tax hikes. The sale would be made to a new nonprofit entity affiliated with the South Central Connecticut Regional Water Authority, which is a quasi-public agency that does not pay property taxes unlike Aquarion.
Since Aquarion is a huge property owner across the state, Republicans warned that the sale could lead to increased local taxes along with an expected 65% water rate increase over 10 years.
The Public Utilities Regulatory Authority, known as PURA, is expected to vote as early as Wednesday on whether to approve the proposed sale. If the sale is approved, the new entity will not be subject to rate approvals by PURA.
Senate Republican leader Stephen Harding of Brookfield said the sale would not have been possible unless the legislature abruptly changed RWA’s charter to allow the purchase, which the General Assembly did in June 2024 in special session as part of an omnibus, 140-page bill that focused on school construction and car taxes.
“Why? We were not told,” Harding said Tuesday. “Magically, who was the one organization that won the bid and gave the high price for purchasing? RWA. … The $2.4 billion purchase is going to be on the backs of the water ratepayers. … They purchased it for a ridiculous, illogical price.”
Besides the Senate Republicans, the deal is opposed by mayors, leaders of regional councils of government, and state attorney general William Tong, who is a Democrat. Tong noted that the Public Utilities Regulatory Authority had blocked Aquarion’s attempt to hike rates by nearly 30% in 2023. That decision led to an appeal by Aquarion, but the state Supreme Court agreed largely with the decision to block the rate hike.
The 59 towns where Aquarion currently operates have a combined population of nearly 800,000 residents, officials said. In the Greater Hartford region, Aquarion provides water to Farmington, Southington, Granby, East Granby, and Simsbury, among others.
Lamont raises concerns
Senators and others complained Tuesday morning that Gov. Ned Lamont has remained silent on the issue. Two hours later, Lamont’s chief spokesman, Rob Blanchard, said that the governor has concerns.
“Connecticut ratepayers deserve relief from high utility costs and at a time when the governor is working to lower those costs, selling Aquarion could adversely impact those efforts,” Blanchard said. “This item deserves strict scrutiny to ensure ratepayers are protected.”
Politically, Lamont’s two Republican opponents in the race for governor, state Sen. Ryan Fazio of Greenwich and former New Britain mayor Erin Stewart, are against the deal.
“The fact that Governor Lamont allowed this to move forward is a complete betrayal of Aquarion’s ratepayers,” Stewart said in a statement. “Once again, it happened with no public hearing, no transparency, and no accountability. Another failure of leadership from the Lamont black box in Hartford.”
She added, “I appreciate the legislators, including Senators Harding, Somers, Hwang, and Fazio, who worked to expose this crooked process. Connecticut deserves more than watchdogs in the legislature. We deserve a governor who will stop it from happening in the first place, and that’s why I’m running. I urge PURA to reject this merger.”
Fazio spoke at the Republican news conference at the state Capitol complex, saying that he had spoken on the Senate floor for 30 minutes in special session in 2024 in an attempt to derail the deal.
CT official says proposed water deal will ‘double’ bills. Here’s what the utility says.
“The deal stinks,” Fazio said. “The former CEO of Aquarion has called the situation ‘shameful.’ Literally decades and decades of unaffordable water rate hikes await Connecticut residents if this becomes reality.”
State Sen. Heather Somers, a Republican from Mystic, said that the $2.4 billion purchase price is inflated.
“Already overburdened Connecticut families will face a tsunami of water rate hikes if this deal goes through,” Somers said. “Public health and the environment will be jeopardized. PURA should vote down this bad deal.”
Sen. Tony Hwang, who represents towns in the affected area, said, “The lack of transparency, the potential impact on ratepayers and to our towns, and the potential negative impact to our environment are all reasons to vote against this proposed sale.”
Tong has blasted the deal, saying it will not help ratepayers.
“This transaction is a costly loser for Connecticut families who simply cannot afford higher water bills right now,” Tong said. “This is about Eversource wanting to offload Aquarion because they didn’t get the multimillion-dollar rate hike they demanded. Don’t be confused by the complicated legal maneuvers. This is an end-run around PURA to double bills, and it should be rejected.”
Senators and others said they were uncertain how PURA might rule. They said that longtime Republican Michael A. Caron and Democrat David A. Arconti might be the only two commissioners to rule because there is no stated level of a quorum on the board. Three other commissioners who were recently appointed by Lamont might recuse themselves because they had taken a position in the past before they served on the PURA board, officials said.
Eversource declined to comment on the pending vote, but pointed to various statements on the issue.
David J. Borowy of Cheshire, who serves as board chairman of the newly created Aquarion Water Authority, said he understands the concerns of various mayors because he once served as mayor of his hometown.
“Another concern voiced by some local leaders revolves around the new authority’s obligation to pay property taxes,” Borowy wrote.
“As a public authority, the AWA will not be a private, for-profit entity. Instead, it will make Payments in Lieu of Taxes (PILOT) to municipalities, a common system used for state and other non-taxed properties like schools and healthcare facilities. Critically, the AWA is committed to paying 100% of the property taxes due on all properties owned at the time the transaction is finalized and will pay additional taxes for any new service line or pipe expansions. The AWA, unlike the state in some PILOT arrangements, cannot reduce these payments.”
Eversource announced the deal in January, saying it had agreed to sell the subsidiary for about $2.4 billion in a deal requiring approval by regulators in Connecticut, Massachusetts, and New Hampshire. The deal includes about $1.6 billion in cash and $800 million in debt. Eversource had said earlier that it would sell the subsidiary after PURA blocked a rate increase.
Christopher Keating can be reached at ckeating@courant.com