A Superior Court in Connecticut has overturned a previous decision by the Public Utility Regulatory Authority (PURA) that blocked the proposed sale of Aquarion Water Company for $4.2 billion to the South Central Connecticut Regional Water Authority. The ruling, issued on March 14, 2024, has significant implications for both the water utility and its customers, many of whom have expressed concerns over potential rate increases should the sale proceed.
Judge Matthew Budzik stated in his written decision that PURA acted “illegally” in its November vote to reject the sale. He emphasized that the regulatory authority exceeded its jurisdiction by effectively nullifying a legislative act that explicitly authorized the transaction and outlined its terms. Budzik noted, “To hold otherwise would render the Public Act superfluous and meaningless, and render the legislature subservient to the policy decisions of PURA, not the other way around.”
Aquarion welcomed the court’s ruling, highlighting an opportunity for collaboration moving forward. The company stated, “Today’s clear decision provides a path forward which we believe should be focused on collaboration and reaching a practical resolution that supports long-term infrastructure investment, protects customers, and ensures safe, reliable water service across Connecticut.” Aquarion plans to continue engaging with PURA and stakeholders as discussions progress.
William Tong, Connecticut’s Attorney General, who opposed the sale, indicated that he is evaluating the court’s decision and considering further actions. He remarked, “We are reviewing the decision and evaluating next steps. But this remand does not change the fundamental truth of this transaction — it’s a costly loser for Connecticut families and it shouldn’t happen.”
The legislative approval for the sale was granted in June 2024, allowing Eversource Energy, the owner of Aquarion, to proceed with transferring ownership to the nonprofit water authority. This transaction requires a legislative exemption because it involves selling a regulated public utility to an unregulated nonprofit entity. The legislation was swiftly enacted without a public hearing during a special session and was signed by Governor Ned Lamont.
PURA had previously blocked the sale on grounds that it was not in the public interest. The regulatory body raised concerns about the proposed governance structure of the merged entities, claiming it would under-represent former Aquarion customers. PURA also expressed apprehension regarding the lack of rigor in the proposed Office of Consumer Affairs meant to advocate for these customers.
Budzik’s ruling clarified that PURA overstepped its authority by substituting its view of the public interest for that of the legislature. He stated, “The court holds that PURA has no authority to overrule, or to ignore the explicit, plain decisions made by the Legislature and set forth in statute with respect to the foregoing issues.”
While Budzik confirmed that PURA acted illegally, he did not mandate an immediate approval of the sale. Instead, he remanded the issue back to PURA, emphasizing that the authority must operate within the parameters established by Connecticut law. The court’s decision requires PURA to engage in reasoned decision-making when considering the application.
The ongoing debate surrounding the sale has attracted significant attention, particularly as consumer groups and local governments in Fairfield County have expressed fears over potential rate increases. Opponents argue that while PURA could limit rate hikes, an unregulated Aquarion would not be subject to the same regulatory oversight post-sale.
If the sale does not proceed, Eversource has indicated it might seek a rate increase of up to 42 percent from PURA to cover infrastructure improvements and restore profitability. In contrast, the Aquarion Water Authority, which is set to manage the nonprofit entity after the sale, has stated it would implement rate increases beginning in 2027 but at levels significantly lower than those proposed by Eversource.
As discussions surrounding the water utility sale unfold, it is evident that this decision is not only a pivotal moment for Aquarion but also plays into broader discussions about utility rates and consumer protection, especially as state and local elections approach. If the sale is finalized, the combined entities would serve more than one million people across 74 municipalities in Connecticut.
