February 22, 2019

SJW to refile regulatory application for $1.1B CT Water buyout

Photo | Connecticut Water
Photo | Connecticut Water
A Connecticut Water truck at Middlesex Hospital in Middletown.

The California water company working to acquire Clinton-based Connecticut Water Service for $1.1 billion said it plans to refile its deal application with state regulators.

SJW Group last month revoked its application submitted to the Connecticut Public Utility Regulatory Authority (PURA) amid resistance from regulators who issued a preliminary decision in December to block the deal.

PURA had argued the all-cash buyout would leave Connecticut Water in worse financial condition, and expressed concern the proposed combination lacks commitments to keep the company and its workforce in tact in Clinton.

In a fourth quarter earnings release Thursday, SJW said it will file a new application for the deal during the second quarter this year.

SJW CEO Eric W. Thornburg in a conference call regarding the earnings report said the renewed application will be squarely focused on addressing PURA's concerns.

"So having taken a careful look at that and consulting with other experts and some fresh eyes, we believe that we can adequately address those, but we respect the commission process and we recognize that coming back in, we have that burden to make sure that we alleviate their concerns and address those issues," Thornburg said.

After PURA's preliminary denial, the company rolled out a slate of new commitments to quell their concerns. The new pledges included reassurances that rates would be unchanged for customers of Connecticut Water and its two local subsidiaries -- Avon Water Co. and Heritage Village Water Co. -- through 2020.

The companies also promised to maintain Connecticut Water's minimum employment levels, regional headquarters and management team in Clinton.

The combination was originally expected to be consummated by year-end 2018, a delay that is a potential win for electric and gas utility Eversource, which submitted unsuccessful bids last year to takeover Connecticut Water.

Meantime, another California water company has attempted to acquire SJW, whose board swiftly rejected the offer.

This story has been updated

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