Fairfield public, pols pour on criticism of water rate hike
The region's water company came under fire from the public at a crowded Tuesday night hearing in Fairfield, where a proposal to hike residential rates by 18 percent in September was harshly criticized.
The two dozen people who spoke at the state Public Utilities Regulatory Authority's hearing in Sullivan-Independence Hall also were upset over what they said is Aquarion Water Co.'s failure to provide justification for the rate hike, which would be followed by annual increases of less than 2 percent in the following two years.
The jammed setting for the hearing also drew fire. The first-floor conference room in Sullivan-Independence Hall was packed with about 55 people, and state Sen. John McKinney, R-Fairfield, said another 20 to 30 people were forced to stand in the hallway and couldn't hear what was being said.
"You have a crowded room, people are frustrated and the public is not being served," said Michael Herley, a District 1 member of the Representative Town Meeting.
John W. Betkoski III, PURA's vice chairman, said another hearing would be scheduled in Fairfield at a larger venue and that he hopes Aquarion would provide information on why its requested 18 percent rate hike is necessary. During Tuesday night's hearing, Betkoski asked if Aquarion was prepared to give a presentation, and Bruce T. Silverstone, Aquarion's vice president of corporate communications, said the water company hadn't planned to do that.
Before the hearing started, Silverstone told the Fairfield Citizen the rate hike is necessary because Aquarion had spent $143 million in the last three years on infrastructure, which he said included pipes in the ground, pump stations and upgrades to treatment plants. He said Aquarion is trying to recover money that already had been spent and that water utilities "continue to face escalating needs for capital investment in aging but essential infrastructure as new environmental and water-quality standards require additional capital and operating expenditures."
Silverstone said Aquarion's last rate increase was 11.8 percent three years ago.
First Selectman Michael Tetreau said the proposed 18 percent rate hike would be "too high" and cost the town an extra $200,000, which would be passed onto Fairfield residents in the form of either reduced services or higher taxes. Tetreau said an essential step in the rate-hike review process -- a public presentation by Aquarion to its customers -- is needed for PURA to receive educated feedback.
Tetreau asked PURA to conduct an independent financial review of Aquarion, saying the proposed increase would be "just too big a number to be off in running a company or an organization."
Tony Unger, a Town Council member in Monroe, said his town is home to many people who are either unemployed or senior citizens living on fixed incomes. "When they have to look at a 23 percent increase, they don't know where they're going to get it," he said.
"Eighteen percent in one year, maybe they haven't been doing the right planning all along," Unger said of Aquarion. "If it's [for] infrastructure, it should be over a period of time."
State Rep. Brenda Kupchick, R-Fairfield, said she had received 300 emails from constituents about the proposed rate hike and that her constituents are "very upset." She said Aquarion customers had paid a fee for infrastructure on their water bills "for many years."
"I think Aquarion should have some public meeting to explain to ratepayers what they're looking to do, point by point by point," Kupchick said.
"People can't take it anymore," McKinney said. "The cost of everything is going up, except our salaries."
McKinney, the state Senate minority leader, added, "People cannot continue to pay more and more, especially those on fixed incomes ... This is a 23 percent increase over three years, and it's simply unaffordable and unacceptable."
Several people in the audience questioned whether the rate increase would fund the purchase of more water companies. Others said PURA should carefully examine Aquarion's financial records and corporate structure, including salaries, pensions and dividend payments, because its owner is a private equity firm in Australia and that private equity firms are profit-driven.
"This is very unusual because of who the owners are," said Tom Kinsley of Canterbury Lane, adding that private equity firms have a short-term view and usually sell a company after three to five years for a profit after either cutting salaries or raising revenue. "It certainly looks like they're driving the revenue with an 18 percent growth rate," he said. "There's something under the covers because of what they're trying to drive in revenue."
Bruce Ryan, a District 10 member of the Representative Town Meeting, said he believes Aquarion is "shooting for the stars and hoping to get the moon."
"I urge you to look at the reality of what this is going to do to the taxpayers of this town and other towns," Ryan said to PURA. "Really, all it comes down to are who are the beneficiaries of it? Here, we're talking about a private equity firm being the beneficiary."
Robert Fernandez of Fairfield agreed. "This company is a private, for-profit company, and the profit they're making is getting to be exorbitant," he said. "We can't go down the block to another water company."
David Rosenstein, who lives in the Southport section of town, said PURA should examine Aquarion's translation of its projected rate increase into dollars, saying it is based on a customer using 6,000 gallons per month, while his home generally consumes 7,500 gallons a month. "They're probably underestimating the real dollar increase people will face each month," he said.
Joseph A. Rosenthal, from the state Office of Consumer Counsel, which serves as an advocate for ratepayers, said his office hadn't taken a position on Aquarion's requested rate hike because evidence is still being gathered. But, he added, "We tend to argue for much lower rate increases."
Betkoski noted that the Office of Consumer Counsel has the ability to appeal PURA's decision in court.
Ellen Jacob, an RTM member from District 9, echoed the comments by McKinney and Fernandez in saying, "It's just getting to be too much. We have no other place to go for it. We need water to live."