by Dana Benson
Save Our Towns/Save Our Schools
The Regional Water Authority’s proposal to purchase Aquarion Water Co.’s CT assets is complex; creating a detailed summary will take time. Here is my first attempt to highlight some of the facts and issues.
Towns Served in CT by Aquarion:
https://bit.ly/4ethQ8k
Regional Water Authority Slide Presentation:
https://bit.ly/3Xfc0l5
Regional Water Authority President goes through slides (48 minutes)
https://vimeo.com/
Full Regional Water Authority Hearing (2 hours)
https://vimeo.com/1002072117
Dana Benson of Easton testimony (5 minutes)
https://vimeo.com/1002072332
There will be more hearings in the future. The timeline for the sale of Aquarion is that final bids are due in December. Then, the Public Utility Regulators have six months to review and approve the transaction.
Over the past ten years, Eversource has invested hundreds of millions of dollars in Aquarion. It recently sought a 13% rate increase to recoup some of that investment. The Public Utilities Regulatory Authority (PURA) turned them down. Shortly after, Eversource announced its intention to sell Aquarion via a competitive bid. This means that the Regional Water Authority will be one of many bidders.
The Regional Water Authority purchased the New Haven Water Company in 1980. Eli Whitney II founded the New Haven Water Company in the 1800s. It is the second-largest water utility in CT. It is a “non-profit public corporation and political subdivision created by the State of CT in 1977 to provide water to the State of CT. A not-for-profit state-chartered utility like the Regional Water Authority is less likely to sell off non-core land to developers than a private equity fund buyer or a for-profit corporation.
RWA serves 430,000 customers from Milford north to Cheshire, west to Seymour, and east to Killingworth. One of their charges is to conserve and preserve land. This link takes you to a map of their service territory: https://bit.ly/3WWYeSS. This link takes you to a map of Aquarion’s service territory: https://bit.ly/4dx8x7l
The Public Utility Regulatory Authority (PURA) currently sets Aquarion’s rates. If RWA succeeds in buying Aquarion’s CT assets, it will become a quasi-government utility like RWA. The state government has already approved forming the Aquarion Water Authority (AWA) structure, so that will not be a contingency in RWA’s proposal to the owner of Aquarion (Eversource). Click here to learn more about AWA: https://bit.ly/3XiU4WV https://bit.ly/4dZdiGB
If the Regional Water Authority (RWA) buys Aquarion and converts it into the Aquarion Water Authority, a non-profit quasi-governmental utility, the rates Aquarion charges its customers will no longer be set by the State. The Aquarion Water Authority Representative Policy Board will set them. This board will comprise representatives of all fifty-nine towns where Aquarion supplies water or owns land.
It will approve spending on projects over three and a half million dollars. Making Aquarion a non-profit means the towns whose citizens are being charged for the water the system produces will have representatives who decide what their citizens pay for water.
Above the “big board” of fifty-nine community representatives will be a five-person executive board, a “little board” that develops strategies. Most of “the little board’s” recommendations must be approved by the “big board” of community representatives. Click here to see the slide of the organizational chart: https://bit.ly/3T2JNvv
In addition, the state appoints a Consumer Affairs Administrator. He serves on the “big board” and advocates for water customers. The current Office of Consumer Affairs representative, Jeff D’Onofrio, testified for thirty minutes. He favors the transaction. His speech is worth listening to in order to learn more about the water industry. Click here to listen: https://vimeo.com/1002092557.
D’Onofrio pointed out that consumer water use has declined for twenty years due to improved conservation. He said there are over one hundred fifty thousand quasi-government-owned water utilities in the United States and only nine investor-owned water companies in England. In a fragmented industry with declining individual consumption, consolidation through acquisition makes sense to realize economies of scale.
Selectmen from various towns expressed concerns that the “big board” would be too big to do anything. They also worried that the municipalities with greater population densities could outvote the rural towns on the board. One question was how the representatives would be allocated. Would it be one representative per town, or would there be another formula?
Charles Firlotte, who served as President of Aquarion for 16 years, testified that RWA’s rate increases have been dramatically higher in its territories over the past ten years than Aquarion’s. He is concerned about too much debt being heaped on Aquarion and made several arguments against the transaction. Listen him here (8-minute clip): https://vimeo.com/1002072266.
RWA bond ratings: https://bit.ly/4cz752Z
Aquarion bond ratings: https://bit.ly/3z2srrz
Dr. Bindelglass of Easton did not attend, but he had the mayor of Stratford, Laura Hoydick, reiterate his concerns about the possible loss of tax revenue to Easton. At the same time, she discussed the effects upon Stratford. Bindelglass previously spoke privately with the RWA.
Listen to Mayor Hoydick Stratford discuss Easton’s tax concerns via the link below. Her comments about Easton start around 3-4 minutes in (6-minute clip). https://vimeo.com/1002072305
If RWA bought Aquarion and became a non-profit Water Authority, it would no longer pay property taxes to the towns it operates in. Instead, it would make “Pilot Payments” (payments in lieu of taxes). Management says the transaction would not affect the town tax revenues because the Pilot payments would equal the property taxes Aquarion used to pay. Other Selectmen spoke about the possible loss of property taxes.
Dionna Carlson, New Canaan First Selectman: https://vimeo.com/1001858917
Vicki Tesoro, Trumbull First Selectman: https://vimeo.com/1002104510
