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December 12, 2016 Editorial

Water-discount reversal adds to anti-business sentiment

Evidence of Connecticut's poor business climate was on full display again last week.

The latest purveyor of bad policymaking was the Metropolitan District Commission, which unanimously voted Dec. 5 to rescind a high-volume water-user discount that Niagara Bottling Co. was expected to leverage once it completes its $73 million Bloomfield bottling plant early next year.

It was only a year ago that MDC adopted the policy, which gave discounts to companies that use significant water (more than 500,000 gallons daily) or create lots of wastewater (more than 500,000 gallons daily). The policy was created around the same time California-based Niagara Bottling was moving forward with plans to build the bottling plant, which could use up to 1.8 million gallons a day to fill its bottled-water products that will be sold around the country.

The policy would have saved Niagara up to $1.8 million annually, a number company officials no doubt were counting on when they negotiated to build their Bloomfield facility, which will employ 120 workers, adding much needed jobs in a flailing Connecticut economy.

If there is anything businesses clamor for, it's economic certainty, particularly in tax and regulatory policy, and MDC's decision to rescind its water-user discount, just as the Bloomfield bottling plant is getting ready to come online, simply adds to Connecticut's reputation as a poor place to do business.

MDC caved to pressures from local residents and advocacy groups, which raised objections to public water being sold to a private business at a discounted rate, particularly at a time when Connecticut faces drought conditions that have forced water utilities around the state to ask customers to conserve water.

To be clear, we aren't necessarily blaming opponents of the bottling plant for this ordeal. They've raised some legitimate concerns over the past year, including objections over the lack of transparency with how this bottling-plant deal was negotiated.

That has put officials from the town of Bloomfield, which offered Niagara tax breaks to build its facility, and MDC, which crafted the water discount, on the proverbial hot seat — and rightly so — for months.

We also understand fears about selling local water at a time when 44 percent of the state is experiencing “extreme” drought conditions, which led Gov. Dannel P. Malloy and other state officials in October to ask residents to conserve water by taking shorter showers and doing fewer loads of laundry.

It appears, however, MDC has adequate water supply. Throughout this process, MDC defended its discount and decision to sell water to Niagara, arguing it has plenty of capacity and that the deal will bring in new revenues that could help lower customers' bills. According to Niagara, at its peak, the plant will use only 2.8 percent of MDC's daily supply of about 77.1 million gallons. Right now, the actual average daily usage is around 48 million gallons, down significantly from historic levels.

Regardless, MDC adopted the water-use discount knowing Niagara would take advantage of it, and has now pulled the carpet out from under the company's feet, months before it opens for business.

According to published reports, Niagara officials said they won't oppose the change, but it still sends the wrong message to the business community, mainly that it can't trust government or quasi-public agencies to keep their word.

Changing the rules midstream is bad policy, and we urge MDC — and all arms of government — to be more transparent in its future dealings to avoid such reversals. 

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