Aquarion Water Projects $64 Million Revenue Increase Amid Regulatory Changes

On July 24, 2025, the Connecticut Public Utilities Regulatory Authority (PURA) convened an evidentiary hearing regarding Docket No. 25-04-03, focusing on the proposed change of control of Aquarion Water Company. This meeting highlighted significant financial implications and regulatory considerations surrounding Aquarion's operations and future rate adjustments.

A central topic of discussion was Aquarion's projected revenue deficiency, estimated at $64 million. This figure reflects the gap between the current rate base and the necessary revenue to achieve an acceptable rate of return, factoring in depreciation, taxes, and operating expenses. The hearing revealed that this projection is not merely a reflection of past financial performance but also includes anticipated future expenses, particularly in light of new regulations concerning lead and copper remediation and PFAS (per- and polyfluoroalkyl substances) management. These regulatory changes were not accounted for in previous rate cases, indicating a shift in the financial landscape for water utilities in Connecticut.

The hearing also addressed the Water Infrastructure and Conservation Adjustment (WICAA) mechanism, which allows for rate adjustments based on infrastructure investments. While Aquarion has previously reached the 10% limit on WICAA, the discussion indicated that the current capital plan is significantly higher than in past years, driven by the need to address aging infrastructure and compliance with new environmental standards.

Additionally, the potential for operational synergies resulting from the change in control was examined. Aquarion representatives noted that the transition to a non-publicly traded entity could lead to cost savings, although the exact impact of these synergies remains to be fully quantified. The hearing underscored the importance of these financial considerations, as they will directly affect customer rates and service quality.

The meeting also touched on land protection issues related to previous transactions involving Aquarion's property. The discussions clarified that while certain properties were designated for protection in past agreements, the company has since acquired additional assets that may not be covered under those protections.

In conclusion, the evidentiary hearing served as a critical platform for evaluating Aquarion's financial strategies and regulatory compliance in the face of evolving environmental standards. As the proceedings continue, stakeholders will be closely monitoring how these discussions will shape the future of water service in Connecticut, particularly regarding rate adjustments and infrastructure investments. The next steps will involve further analysis of the proposed changes and their implications for both the company and its customers.