The Connecticut Supreme Court on Wednesday upheld nearly all of state regulators’ decision two years ago to cut water rates for Aquarion customers by an average of $67 a year.
The unanimous ruling was largely a victory for the Public Utilities Regulatory Authority, which has repeatedly clashed with the state’s investor-owned utilities, who have taken issue with its efforts to apply tougher scrutiny to the way the companies operate and the costs they are allowed to recoup from customers.
A key moment in that dispute came in 2023, when PURA rejected Aquarion’s request for an annual rate increase of around $61 a year for the average customer. Instead, PURA voted to reduce rates, citing dissatisfaction with how the company justified years’ worth of capital costs, including plant upgrades and water main repairs.
The company appealed that decision, with the case eventually reaching the state Supreme Court. In Wednesday’s majority opinion, Justice Steven Ecker noted that PURA’s review of Aquarion’s case included audits, evidentiary hearings, numerous exhibits and responses, as well as approximately 48,000 pages of written records.
Despite that lengthy record, Ecker said, there was reason to believe regulators’ justification for not allowing the company to recoup about $42 million in costs associated with its projects.
“Aquarion provided PURA with hundreds of pages of spreadsheets, but the data contained in those spreadsheets were limited to generic information like the name, location, date of completion, and cost of the project,” Ecker wrote. “It was not unreasonable for PURA to decide that this data failed to explain adequately why these itemized plant additions were performed or how they benefited rate-payers.”
The court did side with Aquarion on a smaller dispute over $1.5 million in deferred water conservation costs, remanding that matter back to PURA.
Jamie Ratliff, a spokeswoman for Aquarion’s parent company, Eversource, said in a statement that the company was encouraged by the court’s “constructive decision.”
“This decision affirms that the costs that utilities incur to serve customers are necessary and shall be recovered through customer rates,” Ratliff said. “We are appreciative of the court’s deliberations and for establishing the rules of the road that must be followed by state officials. The court has also provided a path for reasonable cost recovery on critical infrastructure investments that PURA must adhere to in both ongoing and future rate proceedings.”
Others described the decision as a vindication of PURA and its embattled leader, Marissa Gillett.
“This was another resounding affirmation of PURA’s well-reasoned, pro-consumer rejection of Aquarion’s unsubstantiated multi-million-dollar rate hike demand,” Attorney General William Tong said in a statement. “Aquarion sought excessive, unsupported profits, unnecessary ratepayer-supported bonuses, and unwarranted reimbursement for incomplete infrastructure projects. The company failed to meet its burden both before PURA and the court.”
“To me, this seems like more evidence that utilities should stop fighting with PURA, whether in the courts or in public media, and start working with them to reduce rates,” said state Rep. Matt Blumenthal, D-Stamford, who serves as co-chair of the legislature’s Government Administrations and Elections Committee.
A spokesperson for PURA did not immediately respond to a request for comment.
Earlier this year, Eversource announced its plans to sell Aquarion to the quasi-public Regional Water Authority in a deal worth $2.4 billion. The utility serves roughly 685,000 customers across the state.
