Get The Truth And Facts

Water System Takeover FAQs

What’s at Stake for Aquarion Customers?

Aquarion Water Company owns and operates the water system serving residents and businesses in Hingham, Hull, and North Cohasset. This award-winning water system was founded as a private utility and has been owned and operated by a private entity since the late 1800s. Aquarion has supplied water to you and other customers since 2002. Providing water is what we do for residents and businesses in 59 cities and towns throughout New England. 
 
For the past seven years, the Hingham officials have expressed an interest in buying Aquarion’s water system. Later this spring, the Hingham Board of Selectmen plan to bring a proposal before Town Meeting where registered Hingham voters will determine the future of your water system. 
 
Key elements associated with Town Meeting’s decision focus on costs to customers, transparency and accountability, the shifting of operational and financial risks to the Town of Hingham and its residents, as well as the quality of the water you drink.
 
From a financial perspective, Hingham’s proposed takeover represents at least a $250 million decision for water customers. The Hingham Town Meeting’s decision will directly impact your wallet by increasing the rates you pay for drinking water in the years to come – funds required to repay debt, interest and future infrastructure costs should the Town buy the Aquarion system.
 
A takeover of the water system also will affect the quality of water you rely on and the environment around you.
 
Aquarion believes facts, not politics, should inform Town Meeting’s decision on the water company. Unfortunately, the Town’s process to study the advisability and feasibility of a water system takeover has raised more questions than answers. 
 
With that in mind, this document asks and answers many common questions that customers have posed about the proposed takeover during the past year. We hope this information provides you with a better understanding of what’s at stake for you, other customers and the communities we serve.

 

Frequently Asked Questions

Takeover Considerations: The cost of water and what you’ll pay
 
 
 
 
 
 
 
 
 
 
Takeover Considerations: The quality of your water and the environment 
 
 
 
 
 
 
 
Takeover Considerations: Governance, transparency and other information Hingham voters should know
 
 
 
 
 
 
 
 
 
 
 
Takeover Considerations: Some details about the Aquarion Water System
 
 
 

 

 
Q. How much will it cost the Town of Hingham to take over the water system?
 
A. This is the most important question facing water customers and taxpayers. 
 
Unfortunately, the Town’s Water Company Acquisition Study Committee has been unable to provide a true cost of operating and maintaining the water system in the years to come. As a result,  you and other customers won’t know how much you will be forced to pay if the water system changes hands. 
 
Based on different financial analyses that have been presented to the community, you and other customers will pay at least $250 million to cover the cost of buying the system, investing in future infrastructure, and repaying interest.
 
 
Q. A quarter-billion-dollar cost for Aquarion customers seems much, much higher than the Town’s initial estimate of approximately $50 million. What accounts for the difference in cost estimates?
 
A. There are several differences between estimates put forth by the Town and the actual cost of acquiring the system.  
 
One difference is the base cost of the acquisition compared with the total costs accrued through the estimate price of future infrastructure needs, interest costs, and repayment of debt. 
 
Publicly, the Board of Selectmen has focused only on the base cost of the acquisition, which they now estimate at $107 million.
 
However, a financial analysis the Town published last summer revealed a total cost of more than $250 million, which includes the $107 million price of purchase, $65 million in future infrastructure investment, $82 million in interest, and $1.5M to cover costs related to litigation with Aquarion.
 
At $250 million, the water system takeover would be the single largest financial commitment ever made by the Town of Hingham.
 
 
Q. Why should customers have to pay more than $250 million for a water system that operates at a high level?
 
A. That question can only be answered by Town officials. 
 
Customers already have all the benefits of this award-winning system without paying more than $250 million over the next 31 years.
 
The process for acquiring the water system, however, is clear. If Hingham Town Meeting approves a takeover of Aquarion in April, the Town must borrow funds to cover the purchase price while shifting the water system’s future risk and debt to taxpayers (note: by borrowing funds to pay for the acquisition, the Town will obligate Hingham taxpayers to guarantee repayment to lenders.) 
 
Thereafter, a new water system governing body – the Hingham Board of Selectmen based on a current proposal – will ask you and your fellow customers to repay acquisition costs in the form of higher rates and bills. 
 
 
Q. I thought that the Town said water bills would be lower under its ownership?
 
A. Last summer, the Board of Selectmen presented a financial ‘analysis’ that promised significant ($136 million) future savings for you and other customers. 
 
This unfortunate claim was recently determined to be incorrect….by the Town’s own financial consultant, who still claims that there will be savings, but much less savings.  .  
 
 
Q. Does the Town know what it will cost to maintain the water system in the years to come?
 
A: The Town has not provided a clear statement of financial resources that are needed to operate and maintain the Aquarion water system.  
 
It’s important that customers understand the financial costs of operating a water system. There are two areas of cost  (1) for ongoing operations and maintenance of the system’s asset and (2) for capital investments to upgrade and replace system assets. Both factor into projecting the future cost of owning the water system and meeting the obligation of providing water service.
 
In presenting estimates to the community, it is clear that the Town used a financial model that lacked solid data in both areas. The Town also failed to engage experienced engineers when constructing its financial model. Without engineering expertise and accurate information, the Town has been forced to rely on fuzzy estimates when making statements about potential costs.
 
 
Q. What about the Town’s claim that it can do better than Aquarion on water rates?
 
A. As a regulated utility, Aquarion does not set water rates. In Massachusetts, the Department of Public Utilities is the sole body empowered to set water rates for the Commonwealth’s water systems. 
 
Rate increases reflect operational expenses and infrastructure investments that have been incurred by owners/operators of water systems. Rates are set to cover those costs and to ensure that community water suppliers have adequate financial resources to serve customers.
 
 
Q. Is there any truth to the Town’s claim that water rates have skyrocketed since Aquarion took control of the system?
 
A. Not at all.
 
The record clearly shows that Aquarion has held the line on rate increases since purchasing the water system in 2002. 
 
In that timeframe, municipal water customers across Massachusetts saw their rates rise an average of 4.7% per year while Aquarion customers in Hingham, Hull and North Cohasset had water rates that increased an average of 1.8% per year.
 
It’s important to note that a capital investment made before Aquarion took over the water system continues to impact local water rates. In the 1990s, the former system owner invested tens of millions of dollars in a new water treatment facility located off Main Street. Customers continue to repay those costs. 
 
 
Q. What’s the Town’s plan to run the water system if Town Meeting approves a takeover?
 
A: The Town hasn’t disclosed a transition plan in the event that Town Meeting approves a takeover of the Aquarion system in Hingham, Hull and North Cohasset.
 
The Town has proposed to hire a private company, known in the water industry as a “contract operator,” to operate and maintain the system. But last summer, the Town tried but failed to solicit binding price proposals from potential contract operators. For four months, the Town refused to publicly disclose the nonbinding responses it received regarding the annual cost of water system operations and maintenance. 
 
During late January, officials relented under pressure from Aquarion and the publicand released two documents from firms that provided estimates.  
 
 
Q. What’s the Town’s plan to deliver high-quality water if a takeover is approved?
 
A. The Town hasn’t disclosed its plans for infrastructure investment in Hingham, Hull and North Cohasset.
 
Delivery of high-quality water and reliable service is predicated on careful, detailed planning for future capital improvements and maintenance. The volume and emphasis of infrastructure investment is directly tied to water system performance.
 
Unless the Town provides a meaningful analysis of future infrastructure upgrades and maintenance needs, there is no way to know its plans to deliver high-quality water service to customers.
 
 
Q. How does Aquarion deliver high quality water and reliable service?
 
A: Aquarion has been in the business of providing excellent water to local communities since 1857. Its employees – including engineers, scientists, and licensed operators - are some of the best in the industry, dedicated – in some cases for decades - to serving cities and towns throughout New England with high quality water.  Towns simply cannot retain the expertise that a company serving more than 700,000 people can retain.  That means Towns do not have expertise readily available, and have to hire consultants at high cost to get the same expertise that Aquarion provides to its customers every day. 
 
In Hingham, Hull and North Cohasset, Aquarion relies on a combination of prudent investments, proactive maintenance, and innovative approaches to achieve water quality excellence.
 
The company, with its decades of experience,  has also developed the systems (like automated facilities), processes, and practices that are critical to day-to-day operation and maintenance, and long- term stewardship of the infrastructure.
 
Aquarion’s approach has delivered excellent water service to you and other customers. The system has been recognized by the Massachusetts Department of Environmental Protection (Mass DEP) for “Outstanding Performance and Achievement” in four of the past five years. With its most recent award, the water system was one of 58 selected from a field of 1,735 systems across the Commonwealth.
 
 
Q. How does Aquarion distinguish itself from other water systems?
 
A: As stewards of community water supplies throughout the region and an industry leader, Aquarion is committed to delivering high-quality water. 
 
One example is Aquarion’s dedicated Water Quality Department whose sole job is to ensure the best possible drinking water to Aquarion’s customers across New England. 
 
Aquarion’s full-service approach to our customers in Hingham, Hull, and North Cohasset also helps explain why the system is highly regarded. Aquarion tests your water for more than 100 compounds that are important to public health. Our testing encompasses the full range of regulated inorganic, organic and radiological compounds as well as microbiological and physical parameters. Through constant testing, we can confirm that your water meets or exceeds state and federal standards. Aquarion’s ongoing efforts to protect the purity of the water you drink covers every step of the way, from the source to your tap.
 
Aquarion invests prudently to ensure continual improvements for local water infrastructure. The company invested approximately $15 million into the system’s infrastructure from 2013 through 2018. These outlays help us deliver excellent service to you while ensuring a robust, reliable and safe water system for generations to come.
 
 
Q. What are Aquarion’s future plans to deliver superior water quality and protect the environment?
 
A:   Through our commitment to appropriate improvements, Aquarion has reduced leakage (as measured by unaccounted-for-water) by 35 percent since 2014. Aquarion also has maintained a water main failure rate below industry average. During this past year, we continued to make great strides in our water conservation efforts by proactively finding and fixing water leaks and launching a free fixture replacement program for our customers. 
 
 
Q. What about water resource management?
 
A. Though an aggressive leak detection/repair program and the water conservation program, Aquarion has lowered withdrawals from the system’s water sources (which include a reservoir as well as 11 groundwater wells) to the lowest point since 2012. Water withdrawals from our wells and reservoir have decreased even as population, residential development and commercial expansion are on the rise in the communities we serve.
 
 
Q. The proposed water system takeover is complex, even confusing. What’s being done to help Hingham voters separate fact and fiction?
 
A. Aquarion has established an online presence on the company website and on Facebook where residents can review all of the documents, testimony and related materials regarding the proposed takeover.  
 
 
Q. Has there been any consideration of hiring an independent third-party analyst to review the Town’s and Aquarion’s presentations to the public?
 
A. During a meeting last August, a member of the public suggested that Aquarion and the Town should submit financial analyses for independent, third-party review by a qualified consultant. 
 
Our management thought this was an excellent idea, one so good that we offered to pay for half of the cost to conduct the analysis. 
 
The Town declined the offer and has since refused to consider an independent review. 
 
 
Q. What are the governance considerations associated with a takeover of the water system?
 
A. The number one consideration is how Hingham officials will administer a water system that services customers in other communities. 
 
Under the Town’s proposed governance plan, the Board of Selectmen would empower themselves as Water Commissioners for the system, thereby assuming full control over future decisions about investments, proposed rate increases and maintenance.
 
The proposed governance plan gives rise to a number of questions, including:
 
- Is the Hingham BOS legally entitled to incur debt for the purchase of assets in another town? 
 
- Can Hingham legally dictate expenses for water infrastructure in other communities without giving officials from those towns equal control over finance and investment decisions? 
 
 
Q. What authority will Hull and North Cohasset have if a takeover moves forward?
 
A: Under the Town’s current governance proposal, those communities will have no control or binding authority over the water system. 
 
In addition to appointing the Hingham Board of Selectmen as Water Commissioners, the Town’s proposed governance structure calls an all-volunteer, unpaid five-member Citizen Advisory Board (CAB) with no voting power. 
 
The CAB would include one resident from Hull and one from Cohasset. The Hingham BOS would appoint all other members.
 
 
Q. Does a simple majority vote at Hingham Town Meeting mean the Town will take over Aquarion?
 
A. No. The only way Hingham can purchase the water system is by winning support from at least two-thirds of registered voters at Town Meeting. 
 
 
Q. Do Aquarion customers in Hull and North Cohasset have any say in the proposed takeover?
 
A: No. Only registered Hingham voters can participate in Town Meeting. 
 
 
Q. If Hull and Cohasset have no legal authority, who will pay for future water infrastructure improvements in those communities? 
 
A. There is no agreement about who is obligated to pay for water infrastructure replacement and repairs in Hull and Cohasset – costs that are currently covered by Aquarion. 
 
 
Q. Will Hull and Cohasset customers be protected in the future if Hingham takes over the system and acts to benefit their town rather than neighboring communities? 
 
A. Under Aquarion ownership, the DPU and the Massachusetts Attorney General ensures that all customers are treated fairly. A takeover would empower the Hingham Board of Selectmen to decide what’s best for Hull and Cohasset customers. 
 
 
Q. Is there any history in Hingham on prior water system takeover attempts that might inform customers and voters? 
 
A. The idea of a water system takeover isn’t new. 
 
In 2009, the Hingham Municipal Lighting Plant considered a takeover. After commissioning an independent review, the HMLP abandoned the plan due to legal concerns, potential multimillion-dollar cost overruns, and a failure to demonstrate future savings for customers and taxpayers.  
 
Takeover Considerations: Some details about the Aquarion Water System
 
 
Q. Why does a private company own and operate the Town’s water system?
 
A. Back in the late 1800s, a group of Hingham residents requested that the State Legislature grant a charter to form a private company to establish, own, and operate a water system to serve the Town of Hingham. The charter was later amended so the water system could provide water to residents and businesses in Hull and North Cohasset. 
 
 
Q. Why does Aquarion want to continue owning and operating Hingham’s water system?
 
A. Private water system operators benefit customers like you because they are utility companies that specialize in providing superior water quality and service at a lower cost than municipal water departments that may lack sufficient resources such as qualified engineers, water quality scientists, and water system operators.
 
If Hingham took over the water system, the Board of Selectmen would be forced to spend additional funds to contract the expertise and staff needed to ensure a safe, reliable water system for now and for the decades to come.