Attorney general opposes Aquarion rate hike

State Attorney General George Jepsen has asked the state Public Utilities Regulatory Authority (PURA) to reject an application from the Aquarion Water Company of Connecticut that would increase customer rates by $33 million over three years.

In a brief filed with PURA late Thursday, July 18, the Jepsen argued that Aquarion failed to meet its burden of showing that such a large rate increase is necessary or appropriate.

“Utility companies are, by law, allowed to charge customers rates that are just and reasonable,” Jepsen said in a statement. “Aquarion’s proposed rates far exceed levels that could be considered just and reasonable and are unwarranted at this time. I have asked that PURA reject this rate application and spare ratepayers an unnecessary and excessive increase to their water bills.”

Aquarion has requested a rate increase of $27.2 million in the first year of a 3-year rate period, with additional increases of more than $3 million per year in the second and third years. The rate increase would average more than 17% across its service area in the first year, with a total increase of more than 23% over the three-year period. Aquarion has also asked for an increase in its return on equity (ROE) to 10.6%.

According to the Attorney General’s brief, the evidence in the proceeding demonstrates that the requested increase is “excessive and unwarranted.” Rather, under adjustments the Attorney General recommends, Aquarion’s proposed revenue requirement would decrease by more than $20 million per year. The Attorney General also supports an ROE of 8.53% as recommended by the Office of Consumer Counsel.

Aquarion is the largest water company in the state, serving more than 625,000 people in 47 municipalities, and it has acquired 57 new water systems since its last rate case in 2010, Jepsen said. It was granted a $15 million, or 11%, rate increase in the 2010 case.

“The company’s rates have increased steadily since 2007,” Jepsen added.

A final decision from PURA in the rate case is expected in August.

Assistant attorneys general John Wright and Michael Wertheimer, with Associate Attorney General Joseph Rubin, are assisting Jepsen with this matter.