Tetreau hails state AG's opposition to proposed water rate hike
Published 4:34 pm, Saturday, July 20, 2013
The state attorney general is opposing Aquarion Water Co.'s request for a three-year, 23 percent increase in its water rates.
Jepsen said in a statement that the rate request, rather than being fair, "far exceeds levels that could be considered just and reasonable and are unwarranted at this time."
"It's much bigger than anything we've seen," Jepsen said in an interview Friday.
Jepsen said Aquarion's request -- 17 percent in the first year and 3 percent in each of the next two years -- would earn the company about $33 million over three years.
He also said the rate increase would give the company a 10 percent return on equity. That's higher than either Northeast Utilities and United Illuminating, the state's electric utilities.
"NU has 9.5 percent rate of return and United Illuminating, less than 9 percent," Jepsen said.
But, he added, water utilities have fewer risks than electric utilities. The huge storms that have hit the state and the electric wires they've brought down are proof of that.
Changes in state regulations concerning water utilities will reduce their risks further, Jepsen said.
"We think their rate of return should be about 8 percent," Jepsen said. "That would save the ratepayers $11 million."
Fairfield First Selectman Michael Tetreau, one of the most persistent critics of the rate increase, congratulated Jepsen on Friday.
"I'm thrilled he's involved,'' said Tetreau, who quested the proposed rate hikes at two public hearings in his town. "I hope PURA listens to him.''
But Tetreau said he still believes Aquarion has failed to explain to the general public why it's asking for such a big increase to begin with.
"Give us the information so we can critique it,'' he said of the proposed rate increase, "Or at least understand it.''
Aquarion has said it needs the increase, which would amount to $33 million over three years, because of the cost of repairing and renovating the public drinking water supply.
The water company claims it has spent $143 million on infrastructure projects in the past few years.
Aquarion is the largest privately owned water utility in New England. It serves 47 towns in Connecticut, mostly in the state's western third.
Bruce Silverstone, the company's vice president for corporate communications, said Friday that Jepsen's office "represents the interests of the citizens of the state of Connecticut. We respect his opinion."
Silverstone also said he hopes Aquarion, Jepsen and the authority will arrive at a conclusion that's fair to all parties.