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May 9, 2024

CT Supreme Court to hear Aquarion rate case appeal

PHOTO | PIXABAY.COM A gavel.
By Andrew Larson

The state Supreme Court has agreed to hear Aquarion Water Co.’s appeal after a Superior Court judge upheld a $40 million cut to the utility’s proposed revenue increase by the Public Utilities Regulatory Authority.

Aquarion’s appeal is seen as a legal test of PURA’s new stricter standards for utilities to recover costs, which have drawn fierce opposition from utility companies Eversource Energy Co. and Avangrid, parent company of United Illuminating, the state’s other electricity provider.

Aquarion, based in Bridgeport, is a subsidiary of publicly traded Eversource and provides water service in 56 municipalities in Connecticut.

A ruling by the state’s highest court would have significant implications for future rate cases. The state Supreme Court has the power to establish binding legal precedent and can strike down or uphold state laws based on their constitutionality.

In the initial appeal, Aquarion argued that PURA’s March 2023 decision was “confiscatory” and threatened its financial stability. A Superior Court judge ruled mostly in favor of PURA, in a decision issued March 25, 2024.

Aquarion appealed the trial court’s decision to the Appellate Court. On Tuesday, the case was transferred to the state Supreme Court, at the high court’s request, which means it will bypass the Appellate Court.

The appellant's brief is due June 24, 2024, and the case will likely be heard during the 2024-25 court year, according to a Judicial Branch spokesperson.

“We will be prepared to defend our claims in court regarding this case,” said Aquarion spokesperson Peter Fazekas. He declined to comment further.

The appeal comes as Eversource and PURA are engaged in a high-profile dispute over utilities’ ability to recover costs for capital projects. PURA has imposed stricter standards for cost recovery under chair Marissa Gillett, whom Gov. Ned Lamont has given strong support and promised to reappoint.

Eversource and Avangrid have been critical of Gillett’s approach to ratemaking, saying it will have a detrimental effect on their ability to attract investors, lowering their margins to unsustainable levels.

Lamont announced his intent to reappoint Gillett on May 2 – the same day that Eversource CEO and President Joseph Nolan told investors that Eversource would reduce its investment in Connecticut by $500 million over the next five years due to the “negative regulatory environment.”

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