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August 9, 2019

Weeks from merger decision, CT Water’s 2Q profits up 22%

Photo | Connecticut Water A Connecticut Water truck.
By Joe Cooper

Connecticut Water Service Inc., which is nearing a decision from state regulators on its proposed $1.1 billion merger with a California water supplier, said its second-quarter profits jumped about 22 percent due partly to increased rate revenues in its home state.

The Clinton-based water purveyor, operating subsidiaries in Connecticut and Maine, in the April-June period posted net income of more than $5.7 million, or 48 cents a diluted share, up from $4.7 million, or 39 cents, in the second quarter of 2018.

Total revenues also rose about 2.4 percent to $32.3 million, although the increase was partially offset by increased tax, depreciation and interest expenses. For the year, Connecticut Water revenues have increased about 3.7 percent to $60.1 million.

Connecticut Water's shares were up 0.32 percent to $69.95 after the market closed Thursday.

David C. Benoit, president and CEO of Connecticut Water, in an earnings release said the water supplier made “significant progress” during the three-month period in its quest to combine with California’s SJW Group.

In April, the companies revised and refiled an application with the Connecticut Public Utilities Regulatory Authority (PURA) seeking approval for its proposed tie up, which was first announced in March 2018.

The action resulted after PURA last December preliminary denied the proposed combination due to fears the deal would leave Connecticut Water in worse condition financially and managerially.

Last month, the companies, through a settlement agreement between the Connecticut Department of Energy and Environmental Protection and the Office of Consumer Counsel, again revised its previous pledges and legally tied themselves to another eight binding commitments they say provide long-term customer and environmental benefits and strengthen local control of Connecticut Water.

PURA is scheduled to release its final decision on the proposed merger Sept. 4, Connecticut Water said.

Meantime, Connecticut Water’s northern subsidiary, Maine Water Co., in May filed a new application with state regulators there seeking approval of the proposed merger. Maine regulators have not indicated when they will deliver a final decision.

“We are working with the parties in the Maine regulatory process to deliver similar benefits in Maine,” Benoit said. “We are eager to begin delivering the full benefits offered through the combination with SJW Group.”

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