Official urges regulators to reject Connecticut Water Co. rate hike request

Connecticut Attorney General William Tong is urging state utility regulators to reject a $21.8 million rate increase sought by the Clinton-based Connecticut Water Co.

Officials with the utility filed an application in October with the Connecticut Public Utilities Regulatory Authority seeking to raise the cost of a gallon of water from 1.5 cents to 1.8 cents. Approval of the increase would raise Connecticut Water’s rates by approximately 18%, according to Tong.

The rate hike request came two years after Connecticut Water received approval for a rate increase in July 2021. Officials with the utility requested a $20 million rate hike in that case, but received a $5.2 million increase.

Tong said in a brief filed Monday that Connecticut consumers, especially those on fixed or limited incomes, “are simply unable to absorb any further increases in their cost of living.”

“These customers are entitled to expect that the Authority and all the participants in this proceeding will work to ensure that the water utility rates approved will be no higher than absolutely necessary,” Tong wrote in the brief.

Officials with Connecticut Water issued a statement on Monday, which said in part that the utility “understands the responsibility to both its current customers and future generations to prudently invest in the infrastructure needed to provide clean drinking water. “

“While we make all efforts to drive down operational expenditures, our water systems in Connecticut are some of the oldest in the country and take significant investment to maintain and improve so that Connecticut residents can continue to depend on reliable water service,” the statement said, noting that the company and public officials “have a responsibility to Connecticut residents to balance the needs of all stakeholders and determine reasonable and prudent water rates.”

Tong noted to PURA commissioners that Connecticut Water is seeking a return on equity of 10.5% as part of its rate increase, which he said is substantially higher than the state’s other regulated utilities.

“The company has presented no reasonable explanation for why a relatively low risk operation such as a water utility should be awarded the highest authorized ROE of any of the state’s regulated public service companies,” Tong wrote in the brief.

The brief identifies numerous areas where the increase requested could be reduced, including accounting, revenue and expense areas, as well as costs that should be covered largely by shareholders instead of ratepayers. Those areas include board of director expenses, investor relations expenses, cash incentives and bonuses.

Connecticut Water serves 107,000 customers in 60 towns.

Dan Haar/Hearst Connecticut Media Connecticut Water Co.’s William Neal MacKenzie Water Treatment Plant in Clinton purifies up to 4 million gallons a day. State Attorney General William Tong is urging Connecticut utility regulators to reject the company’s request for an 18 percent rate increase.