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January 9, 2019

CT Water, SJW withdraw PURA application

Photo | Contributed Killingworth Reservoir is among 253 in-state reservoirs and wells Connecticut Water Service Inc. taps to provide potable water to about one in 10 Connecticut residents.

Clinton-based Connecticut Water Service and California’s SJW Group on Wednesday withdrew their application to state regulators to combine in a proposed $1.1 billion deal.

SJW’s acquisition bid has drawn resistance from the Connecticut Public Utility Regulatory Authority (PURA), which in December issued a preliminary decision to block the California water utility from purchasing Connecticut Water and denied the companies’ request to reopen their review of the proposed deal.

SJW and Connecticut Water issued a statement Wednesday stating their intent to withdraw the application and evaluate their regulatory approach and possibly re-submit a new application to PURA.

“The SJW Group and Connecticut Water merger agreement remains in effect and the companies remain committed to the merger and to realizing its many stakeholder benefits,” the companies said.

In a preliminary decision in early December, PURA argued the all-cash buyout would leave Connecticut Water in worse condition financially and managerially. They also expressed concern the combination lacks commitments to keep Connecticut Water’s headquarters in Clinton and local jobs in the state.

The companies offered new commitments to PURA weeks later, ensuring the deal would maintain rates for Connecticut Water customers and ensure job projections in Connecticut, among other promises.

SJW and Connecticut Water on Wednesday said they will review prior utility transactions in Connecticut to “overcome PURA concerns” and obtain regulatory approval.

The delayed deal, originally expected to be completed by year-end 2018, is a potential win for Eversource, which in 2018 submitted unsuccessful bids to acquire Connecticut Water.

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