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CT regulators pass on water merger decision

BY Joe Cooper

6/11/2018
PHOTO | Connecticut Water
PHOTO | Connecticut Water
A Connecticut Water truck outside Middlesex Hospital in Middletown.
State regulators are dodging a decision on a $750 million merger agreement between Connecticut Water Service Inc. and California's SJW Group.

In a draft decision Friday, the Connecticut Public Utilities Regulatory Authority (PURA) said the May 4 application for the combined companies is "not ripe for review" and dismissed the request for approval after the Clinton-based water utility announced it would solicit outside bids for 45 days.

Connecticut Water, serving more than 450,000 customers in Connecticut and Maine, on May 31 announced it would seek competing bids, including from Eversource Energy. They will review and negotiate proposals through July 14.

The action, PURA says, indicates a "reasonable probability" that Connecticut Water selects another bid. The dismissal also avoids it rendering an opinion on the agreement that could affect Connecticut Water's solicitation process, it said.

"In essence, the applicants are asking the authority to approve a transaction that may not come to fruition," PURA said.

Connecticut Water officials said the dismissal was "understandable" given its current open bidding process, adding they will file another merger application once it finalizes a deal.

In a statement, the water utility said it "understands PURA's interest in conserving their resources and conducting their review once the go-shop process is completed."

PURA would open a new 120-day review process upon receipt of another application filed by Connecticut Water.

Connecticut Water has asked Eversource, which acquired Bridgeport's Aquarion Water Co. last year for $1.6 billion, to make a new acquisition offer after declining the utility's unsolicited bid of $63.50 per share in favor of SJW Group's offer now worth $64.72 per share -- based on its closing share price as of April 25 .

But Eversource rejected Connecticut Water's bidding plea and maintained its current offer.