Regulators Approve Slight Rate Increase For Connecticut Water

HARTFORD, CT — A rate decision by state utility regulators will up the average cost of water bills in some towns by less than $4 per month on average, but the approved number falls far short of what Connecticut Water Co. was asking for.

Connecticut Water serves 60 towns.

The Connecticut Public Utilities Regulatory Authority Friday approved a final decision that authorizes an increased annual revenue requirement of $124,700,031 for the Connecticut Water.

The utility, however, had proposed an 18.4 percent increase, or $21,755,828, to its currently authorized revenues of $118,245,047 for a total revenue of $140,000,875. The company's proposal included a 10.5 percent return on equity, which represented a 17 percent increase from the currently allowed 9 percent ROE.

Instead, PURA's approval of the $124 million annual revenue requirement, which takes effect on July 1, allows a ROE of 9.30 percent, as well as an authorization for the Connecticut Water to recover an additional $1,115,803 in executive compensation, provided the utility achieves "certain performance targets."

Connecticut Water President Craig Patla released a reaction Friday afternoon.

It said, "Connecticut Water respects the Public Utility Regulatory Authority's need for due diligence in rate case proceedings, and as such, has been committed to transparency throughout the rate case process. In fact, the company provided more documentation demonstrating the prudency of our request than in any other rate case in our history in the form of interrogatories, audits and in-person testimony.

"Despite the significant adjustments between the draft decision and final decision, the outcome still represents just 30 percent of the amount we feel is necessary to meet our obligations to customers, employees, communities, investors and the environment.

"The decision has the potential to also raise customer costs in the long run, as the company has been warned by credit agencies of a possible downgrade in the company's credit rating due to the outcome of this proceeding.

"A credit rating downgrade will increase the company’s costs related to interest rates on debt. With a significant amount of required investment over the next five years to meet federal requirements such as PFAS treatment, the challenges of increasing cyber security attacks on utilities, and the ongoing efforts to replace aging infrastructure, a lower credit rating will create higher interest rates for the company and, in turn, increased expenses for customers in the future.

"Connecticut Water is proud that PURA approved the company’s proposal of an expansion of its first-in-class Water Rate Assistance Program. As proposed, and approved in the decision, the assistance program will now be available to more Connecticut Water customers and will provide deeper water bill discounts to those who need it most.

"We remain committed to operating under a balanced approach that encompasses the needs of all stakeholders, now and into the future, and will continue to advocate for programs and rates that serve customers, employees, communities, shareholders and the environment. We value the work of those involved in the utility regulatory process and look forward to continued work with PURA, the Office of Consumer Counsel, the Attorney General’s Office and all stakeholders on proactive solutions to the challenges that the industry faces.

"Finally, we’d like to thank the 240-plus dedicated water professionals at Connecticut Water who live and work in the communities we serve. Across 60 towns in Connecticut, this team remains unwavering in their purpose-driven work to provide high-quality water and world-class customer service 24 hours a day, seven days a week, 365 days a year in the name of public health, fire protection and the support of our communities."

Connecticut Water is a public water utility regulated by PURA and it provides water service to more than 107,000 customers in the 60 Connecticut towns it serves and wastewater services to 3,000 customers in Southbury.

The towns served are Ashford, Avon, Beacon Falls, Bethany, Bolton, Brooklyn, Burlington, Canton, Chester, Clinton, Colchester, Columbia, Coventry, Deep River, Durham, East Granby, East Haddam, East Hampton, East Windsor, Ellington, Enfield, Essex, Farmington, Griswold, Guilford, Haddam, Hebron, Killingly, Killingworth, Lebanon, Madison, Manchester, Mansfield, Marlborough, Middlebury, Naugatuck, Old Lyme, Old Saybrook, Oxford, Plainfield, Plymouth, Portland, Prospect, Simsbury, Somers, South Windsor, Southbury, Stafford, Stonington, Suffield, Thomaston, Thompson, Tolland, Vernon, Voluntown, Waterbury, Westbrook, Willington, Windsor Locks and Woodstock.