A proposed $2.4 billion sale of Aquarion Water Company to the nonprofit Aquarion Water Authority (AWA) has ignited fierce debate across 黑料新闻. Supporters of the sale, including the South Central 黑料新闻 Regional Water Authority (RWA), tout long-term benefits and local control. The AWA would essentially merge Aquarion and the RWA into a single nonprofit utility.
Opponents of the sale warn the sale could lead to higher water bills and less state oversight. Former Aquarion CEO Charles Firlotte represents 25 towns in the Fairfield County area opposing the sale to the Aquarion Water Authority.
鈥淧ost sale, rates are going to rise,鈥� Firlotte said, 鈥渂ecause this organization is not efficient.鈥�
Both sides expect rising rates
Both sides agree that water rates are going up. The questions are how much and for what reason?
Firlotte pointed to statements from the RWA that suggest rates could increase by 65% over the next decade. He blamed the RWA鈥檚 operational inefficiencies and Aquarion鈥檚 purchase price.
"There's a walloping $2.4 to $2.6 billion that's going to be put on the backs of Aquarion customers," Firlotte said.
RWA Chief Financial Officer Rochelle Kowalski acknowledged that 65% is the projected rate increase, but said that has nothing to do with Aquarion鈥檚 acquisition price.
鈥淩ates will not go up due to the acquisition itself. Rates will go up regardless of ownership due to required infrastructure investment,鈥� Kowalski said. She said the rate increases will largely go toward planned capital investments in systems and facilities totaling about $2 billion over that 10-year span.
Efficiency claims and savings debate
Firlotte also questioned RWA鈥檚 claim that the sale would save $350 million over 10 years, citing the RWA鈥檚 current rates as evidence against efficiency.
"If they're so efficient, why are their rates 30% higher today?" he asked. "I have no idea what their assumptions are into that $350 million savings they're projecting."
Kowalski said the savings estimate came from a third-party M&A advisor using the previously authorized weighted average cost of capital. She added that the analysis was formally submitted to state regulators.
鈥淚t wasn鈥檛 wild assumptions,鈥� she said. 鈥淲e鈥檝e responded to an interrogatory in that regard.鈥�
Ownership and local control
On the question of ownership, Kowalski said local control would bring long-term stability and accountability.
鈥淎quarion has been sold either three or four times in approximately the last 20 to 25 years,鈥� she said. 鈥淭his provides for long-term stability.鈥�
But Firlotte said the deal was set in motion without public input, pushed through via legislation crafted in a special session.
鈥淚t was not illegal,鈥� Firlotte said, 鈥渂ut it鈥檚 unfair and it鈥檚 inappropriate.鈥�
He also criticized the sale鈥檚 origins, linking it to financial losses at Aquarion鈥檚 parent company, Eversource Energy.
鈥淓versource is selling Aquarion because they got into a bad business investment in offshore wind ... Aquarion is a sacrificial lamb.鈥�
Rate structure concerns
While critics like Firlotte point to RWA鈥檚 higher rates as a red flag, Kowalski said there are no plans to blend rate structures between customers currently served by Aquarion or RWA.
鈥淢ultiple reasons cause rates to vary by utility,鈥� she said, including differences in population density, commercial versus residential customer mix, and infrastructure design.
In explaining Aquarion鈥檚 lower water rates, she noted Aquarion鈥檚 size allows it to spread fixed costs across more customers, which lowers the per-user cost.
Regulatory oversight
Firlotte expressed concern that state regulators at the Public Utilities Regulatory Authority would lose dominion over Aquarion the moment the deal is approved.
鈥淭he day PURA approves the deal is the day they no longer have any jurisdiction whatsoever over Aquarion,鈥� he said.
What鈥檚 next
Kowalski said the process is still moving through regulatory review in 黑料新闻, as well as in Massachusetts and New Hampshire. If approved, she expects the sale to close by the end of the year.
鈥淭his provides for local ownership, stable infrastructure investment, and long-term benefits for customers,鈥� she said.
A note, Gregory B. Butler, who is an executive with Eversource Energy, is a member of 黑料新闻's Board of Trustees.
