Eversource’s sale of the Aquarion Company to a newly created quasi-public water authority supports a broad regional water supply strategy with benefits for consumers and communities and local ownership stability.
While the sale is subject to approval by the Connecticut Public Utilities Regulatory Authority (PURA) and is expected to close in 2025, let’s review some of the benefits.
The sale to the Aquarion Water Authority (AWA) – a standalone not-for-profit public water utility – will not affect current rates for Aquarion consumers. At acquisition, current Aquarion rates and charges will remain in effect. Rates for AWA will continue to be set as a standalone entity, based on AWA’s actual cost of service, in accordance with the enabling legislation statute, which contains important protections for customers in terms of the way that rates are set and the process for resetting rates.
Furthermore, with the lower cost of capital and other advantages that come from converting Aquarion Company to a public entity, the revenue requirement for AWA will generate customer savings over the long term.
As a self-regulated public authority, AWA will be outside the jurisdiction of PURA. This change will continue ratepayer protections because of the credible, long-standing and tested regulatory framework and procedures followed by other public water authorities, which ensure community interests are served and rates are just and reasonable.
Locally appointed residents of each municipality within the Aquarion water district will have a voice in the new authority through a governing board that will cast votes on critical decisions including rate increases, land sales and capital projects. Moreover, this board will have wide exposure to the utility’s operations, strategic initiatives, and financials through regular monthly meetings and committee work.
This hyperlocal representation governance structure also includes an independent Office of Consumer Affairs that will provide full attention and sensitivity to the interests of Aquarion consumers, much like the way the state’s Office of Consumer Counsel and PURA work on behalf of the utility customer.
Aquarion towns will continue to benefit from the revenue support currently received through property taxes. AWA will structure PILOT (Payment in Lieu of Taxes) – which is comparable to property tax in most respects – with Aquarion municipalities to maintain local revenues, keeping cities and towns whole. At acquisition, PILOT payments will reflect the same level of real and personal property tax payments made to communities under the Aquarion Company, ensuring continuity for communities.
The buyer – AWA – was created by the state of Connecticut for the purposes of acquiring the company. The purchase was enabled by the South Central Connecticut Regional Water Authority (RWA) – a not-for-profit quasi-public utility that serves the Greater New Haven area – through legislation included as part of the 2024 omnibus bill. That law enabled the aforementioned new governance structure and regulatory framework for the Aquarion Company that is modeled after RWA, which has 45-year track record demonstrating the benefits of local control and regulation and organizational stability.
Other benefits of the public authority framework include stability of local ownership for Aquarion employees as well as improved economies of scale, a broader focus on customer service and community support, and operating efficiencies for AWA and RWA water systems.
Ultimately, the acquisition by AWA of Aquarion Company will extend all these benefits on a larger scale, result in water services remaining in public hands and accountable to the communities they serve. To that end, Aquarion Company consumers, communities and employees, along with local and state government officials and regulators should embrace the public water authority model and all of its advantages.
Marshall Chiaraluce is the former President & CEO and Board Chair of the Connecticut Water Company and also served as Chief Operating Officer for the South Central Connecticut Regional Water Authority (RWA) and Head of Customer Service & VP of Administration for the RWA’s predecessor, the New Haven Water Company.