Residents of three CT towns to see increase in water cost. Agency notes possibility for ‘rate shock’

Customers in three Connecticut towns will pay more for their water under a plan now approved by the Connecticut Public Utilities Regulatory Authority.

According to the authority and a record of its meeting, it approved an annual revenue requirement of $4.8 million for the rate year of April 1, 2026 – March 30, 2027 for the Hazardville Water Company.

Hazardville Water Company serves approximately 7,500 customers in the towns of Enfield, Somers and East Windsor. The company’s total water production in 2024 was 481,315,000 gallons from its wells. It owns 11 active wells along with various treatment facilities, booster stations, atmospheric storage facilities, and a distribution system, according to PURA.

This approved revenue requirement means there is an allowed return on equity of 9.5%, according to the authority. A message seeking comment was left with the water company.

“The approved increase has an estimated average monthly bill impact of $5.51 for residential customers, billed quarterly for most customers,” according to the authority.

The ruling brings “revised fixed customer charges and water usage rates for both residential and nonresidential customers.”

Russ Bowman, staff attorney at the Connecticut Public Utilities Regulatory Authority, said during an agency meeting that it conducted an “extensive investigatory process” over a 260-day period which included public comment hearings, pre-filed testimony from the company, an on-site audit, an engineering inspection, more than 200 interrogatories among all parties, three days of in-person hearings, submission of 55 late filed exhibits, a late filed exhibit hearing, briefs, and reply briefs.

He noted the authority also had issued a proposed final decision in this matter on March 23, and had then received written exceptions and held oral arguments on them.

Hazardville Water Company had initially proposed a revenue increase of $2.5 million to its presently authorized base rate revenues of $3.4 million, excluding WICA revenues and other adjustments, for a total proposed revenue requirement of $5.9 million, which was a 10.60% proposed ROE, or would have been an increase of about 10% from the current 9.60% ROE, according to PURA.

Bowman noted the authority is guided by state law and case law in its decisions and deciding what is just and reasonable by a preponderance of evidence. He said the decision requires the water company to better capture concerns shared by customers, and that includes on water color, clarity odor.

Commissioner Everett Smith (listed as interim by PURA) said he would abstain from a vote due to the timing of his membership and the review of the water company rate case.

Commissioner Janice Beecher (also listed as interim by PURA) said the agency knows the process “wasn’t easy” but she believes “the process was fair.” She encouraged the water company, “don’t be a stranger” to the state, the professional water community, or to customers.

Commission Vice Chairman David Arconti, Jr.  noted the work of needing to protect ratepayers, and that Hazardville Water Company had not had a fully adjudicated rate case since 2009.

“It has been nearly 17 years since the Company’s last fully adjudicated general rate case. While this prolonged ‘stay-out period’ may have [benefited] customers who might have been charged higher rates had there been more frequent rate adjustments, it also poses the potential for rate shock and diminished regulatory oversight, which is a detriment to both customers (who benefit from the assurance that their bill payments are commensurate to the true cost of service) and the Company (which benefits from clarity and predictability in the Authority’s expectations),” the ruling notes.

Arconti noted the need for careful balance and that the authority is statutorily obligated to be  reasonable and that the authority applied “rigorous scrutiny.”  It heard concerns from ratepayers and looks for “reasonable return,” prudent and necessary to provide a safe and reliable water supply and the decision “reduces and right sizes” the company’s request.  “No rate case is ever easy.”

Commission Chairman Thomas Weihl mentioned the 16 years since the last rate decision and that it created the potential for “rate shock.” He noted the authority looks for and needs explanation and “documentation” and said, “I feel we gave this company significant leeway.”

He said the panel met its duty owed to the public. “We owe a duty to the public to ensure requested costs are justified in the record,” he said.

“This decision is tough but fair,” he said.

The ruling notes, “At the virtual hearing on November 6, 2025, 16 individuals attended and eight provided testimony. All customer testimony provided during the hearing was in opposition to the rate increase.”

The authority also contends the decision “highlights findings made by the Authority related to cost allocation, customer service and other issues. As part of the proceeding, the Authority held a noticed audit and inspection of the Company, a public comment hearing, several evidentiary hearings and a late filed exhibit hearing.” The Office of Consumer Counsel also participated actively in this proceeding on behalf of ratepayers, according to the authority.

“While the Authority recognizes the burden that a rate case places on small utilities, more routine rate amendment applications may reduce such burden on the Company,” the ruling says.

The Public Utilities Regulatory Authority also noted that while Hazardville Water Company’s last fully adjudicated rate case was in 2009 that interim changes to rates had been made through the state Water Infrastructure and Conservation Adjustment mechanism.

In other Connecticut water company news, a Public Utility Regulatory Authority decision this week removed the final regulatory obstacle to closing the $2.4 billion transfer of Aquarion from Eversource to a regional non-profit.

Critics of the sale, rallied by some state leaders and other political figures, complained that it would result in a spike in rates. But there is substantial evidence indicating that rates will go up whether Aquarion remains a subsidiary of privately-owned and regulated Eversource or is transferred to the non profit, unregulated regional authority. PURA’s decision suggests that rates will increase more slowly under authority ownership.

In its decision approving that sale, PURA said it recognized that Eversource had a duty to shareholders to “maximize” Aquarion’s market value.

“However, the $2.35 billion purchase price, which includes a significant acquisition premium, agreed to by AWA, a public corporation, places the proposed transaction on the knife’s edge of a public interest finding.”