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March 15, 2023

PURA rejects proposed rate hike by Aquarion, lowers rates for customers

Photo | HBJ File PURA Chair Marissa Gillett oversees the state's grid-modernization efforts.
By Andrew Larson

The Public Utilities Regulatory Authority rejected a three-year rate increase totaling 27% proposed by water supply company Aquarion during a meeting Wednesday morning, according to PURA.

In February, PURA issued a draft decision in which it fully rejected Aquarion’s proposal and instead reduced current customer rates.

On Wednesday, PURA commissioners voted 2-1 to affirm that action. Chairman Marissa P. Gillett and Commissioner Michael A. Caron voted to approve the decision, and Vice Chairman John “Jack” Betkoski III dissented.

The action will decrease the average residential customer’s total bill by roughly $67 per year, an 11% decrease, according to PURA.

Under the decision, PURA approved annual revenue of $195.56 million for Aquarion for the rate year starting Wednesday – about $2 million less than in the previous year – along with a return on equity of 8.7%. Aquarion requested about $37 million more in distribution revenue over last year, and a 10.35% return on equity.

Also, PURA reset the surcharge known as the Water Infrastructure and Conservation Adjustment, which allows water companies to cover the cost to replace aging water distribution pipes, to zero.

PURA has authorized a new three-tier pricing structure for Aquarion residential single-family customers aimed at reducing water consumption. The system allows for lower pricing at the initial consumption rate tier, which will apply to about 76% of customer bills.

In February, Aquarion said PURA's proposed draft decision raised uncertainty about the company’s ability to continue investing in new infrastructure and services.

“While we understand the drive to affordability, it cannot come at the cost of lost investment that will ultimately harm customer interests,” the company said in a statement. “We will engage with PURA in the coming weeks as we look to find the right balance of affordability and access to clean, reliable water supply across our Connecticut systems.”

PURA said the company is obligated by law to provide safe, adequate and reliable service regardless of the rate increase drop.

Aquarion’s August 2022 request to increase its rates prompted a 200-day proceeding at PURA that included four public comment hearings, several days of field audits and inspections.

During the hearing process, PURA received 48 comments from public officials, organizations and other entities, all of which opposed the proposed increase.

Aquarion’s last rate case was completed in 2013. The Bridgeport-based company serves 207,000 customers in 56 Connecticut municipalities.

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