CT Attorney General, Consumer Council Asking Regulators To Reconsider Aquarion Sale Approval

NEW BRITAIN, CT – Following what they called the "discovery of a massive mathematical error that overlooked nearly half a billion dollars in projected rate increases," Attorney General William Tong and Consumer Claire Counsel Coleman today filed a joint petition urging the Public Utilities Regulatory Authority to reconsider the recent decision approving the sale of Aquarion Water Company.

The claim the transaction will "significantly increase water bills and weaken oversight over customer rates."

The petition identifies "major financial and legal errors in PURA's March decision that understate the cost to customers and undermine the agency's public interest finding," they said

After initially denying the application in November, PURA was ordered by the Superior Court to reconsider the decision. While the court required additional proceedings, it also reaffirmed PURA’s independent authority to determine whether the transaction serves the public interest.

PURA’s approval would place approximately $5.9 billion in acquisition and financing costs on Aquarion customers, including $3.6 billion in interest on the purchase price, Tong said.

Tong said the petition further identifies a "critical error" in PURA's analysis, "which failed to account for approximately $474 million in additional rate increases through 2066."

Specifically, PURA’s Final Decision concludes that "AWA anticipates proposed annual increases from 2027 through 2035. After 2035, AWA state that there will be no further rate increases until 2040 and with rate applications every five years thereafter," Tong said.

Said Tong, "That analysis was incorrect because PURA based its decision on hypothetical financial modeling and a spreadsheet that had been compressed in size. In fact, the correct, fully expanded document projects nearly half a billion dollars in additional rate increases during that time period."

He added, "This is a bombshell that blows open the entire Aquarion decision. PURA completely missed half a billion dollars in rate increases. Their entire decision rested on bad math based on incomplete information. There’s just no question that PURA must immediately reconsider its decision and reject the sale."

Coleman said, "PURA approved the transaction despite finding that the exorbitant purchase price places the proposed transaction on the ‘knife’s edge of a public interest finding.’ A nearly half billion-dollar error in rate impacts doesn’t just tip the scale, it breaks it. PURA must reconsider its decision based on the complete evidence in the record, and take steps to adequately protect the families and businesses within 57 towns currently served by Aquarion in Connecticut."

The petition also raises legal concerns, including that PURA imposed requirements that "conflict with state statute and relied on information introduced after the close of the evidentiary record, undermining fairness and transparency in the regulatory process," Tong said.

Tong and Coleman are asking PURA to reopen the proceeding, correct the errors and "reconsider whether the transaction meets the public interest standard based on the evidence in the record."