PURA Proposes Zero Rate Increase for Aquarion, Company asks for ‘Right Balance of Affordability’


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Instead of the 20 percent increase Aquarion asked for, PURA proposed cutting the company’s revenues in a draft decision that could prevent Aquarion from raising rates on its customers if it’s approved.

Aquarion – a subsidiary of Eversource that provides water to 59 towns and cities in Connecticut, including all of Fairfield County – told regulators that it needs to raise its rates by 20 percent this year and 30 percent over the next three years to make up for the $740 million it spent on its distributions system since its last rate case in 2013.

Consumer Counsel Claire Coleman and Attorney General William Tong both argued PURA should approve a significantly lower increase – about $1.28 a month in Coleman’s proposal  – by lowering the 10.35 percent return on equity the company asked for and not allowing it to charge customers for about $11 million in expenses, including a company suite at Total Mortgage Arena and seats at Hartford Healthcare Amphitheatre in Bridgeport.

Coleman estimated at the time that Aquarion’s proposal would raise the average customer bill by about $5.44 a month. 

PURA eliminated the proposed increase entirely, proposing to decrease the company’s allowed revenue requirement by about 0.192 percent – cutting its revenues by $379,365 instead of increasing them by nearly $50 million over three years like the company proposed. 

PURA also proposed setting Aquarion’s return on equity at 8.7 percent, lower than the 9 percent return it approved for Connecticut Water in 2021, and far below the 10.35 percent return Aquarion requested. The exact impact on customer bills won’t be clear until a final decision is issued.

The draft decision still needs to be approved by PURA’s three-member board before taking effect, and parties including Aquarion will have time to file comments before the board is expected to vote in March.

In a statement, Aquarion said the company has invested $740 million in critical infrastructure since its last rate case in 2013. While draft decisions from rate cases allow for an “open and transparent discussion” into PURA’s rationale, this draft makes Aquarion’s ability to continue to make those investments uncertain, the company said.

“While we understand the drive to affordability, it cannot come at the cost of lost investment that will ultimately harm customer interests,” Aquarion said. “We will engage with PURA in the coming weeks as we look to find the right balance of affordability and access to clean, reliable water supply across Connecticut.”

Tong said in a statement that the draft decision is a “massive victory” for Connecticut customers after years of “relentless” rate increases, and urged the PURA board to stick to the decision.

“When Aquarion first issued its plan, I knew Connecticut consumers – especially those on fixed or limited incomes – simply couldn’t be asked to shoulder yet another costly hit to their finances,” Tong said.

In the draft decision, PURA would not allow Aquarion to charge customers $300,000 for its trade association dues, or $81,491 for “charitable donations” to groups like the Beardsley Zoo, or $37,812 for “entertainment expenses” including a suite at Webster Bank Arena.

PURA’s draft decision would also require Aquarion to meet a set of “affordability” metrics if it wants to charge customers a total of $410,676 to cover a “management fee” it pays parent company Eversource to fund its executives’ compensation

PURA would order Aquarion to report what percentage of residential customers pay their bills each month, how much of their bills customers pay, what percentage of customers the company shuts off for not paying their bills, and the average number of customers with overdue bills each month. How much those metrics improve from prior years would determine how much of that management fee Aquarion can charge its customers for, according to the draft decision.

PURA’s draft decision does include a tiered rate proposed by Aquarion, where customers using more water would pay a higher rate. PURA proposed three tiers: a base rate for customers using less than 6,732 gallons a month [9 CCF], a 20 percent higher rate for customers using between 6,732 and 14,960 gallons a month [9 to 20 CCF], and another 20 percent higher for customers using more than 14,960 gallons a month [20 CCF].