Connecticut Rate Filing

Current Connecticut Water Rates

Application of Aquarion Water Company of Connecticut to Amend its Rate Schedules

Application - August 29,2022

For the complete list of rate filing documents, please visit PURA Docket 22-07-01.

 

Frequently Asked Questions

Over the last nine years, Aquarion Water Company (AWC) has undertaken more than $740 million in water infrastructure improvements throughout our service area, and our investment in our water system continues to grow. 

These investments, vital to providing quality water to AWC’s customers, have been made in key areas including water mains, storage tanks, treatment plant upgrades, dam improvements, new treatment facilities for smaller systems, and enhanced pump stations.  AWC’s customers benefit from these important infrastructure investments and upgrades and have not received a general increase in rates since 2013.  Costs associated with these investments related to property taxes and depreciation have increased 33% and 18%, respectively. 

Aquarion has been highly successful in controlling day-to-day operating and maintenance (“O&M”) expenses, enabling the Company to avoid base-rate changes and maintaining low and reasonable rates for customers.  The Company has controlled O&M expenses through rigorous cost oversight and efficient work practices, limiting the growth rate of these expenses over the past 10 years.

However, it is necessary at this time for the Company to realign its rates with the underlying cost structures to ensure a safe and reliable water supply, including preservation of public health and fire protection.

WICA (Water Infrastructure and Conservation Adjustment) is a surcharge that allows AWC to facilitate more timely replacements of aging infrastructure, such as old or problematic water mains, valves, hydrants, and other equipment.  Under WICA, timelier, smaller increases on customers’ bills make it possible for AWC to invest in our infrastructure, enabling us to improve our service and delivery.  

  • Through WICA surcharges, AWC was able to make approximately $150 million in timely/pressing/critical infrastructure investments.
  • As a result of WICA surcharges, AWC’s proposed rate increase is lower than it would have been. 

In recent years, WICA surcharges have allowed AWC to address pressing water main replacement needs without seeking a general rate review.  However, PURA declined to approve AWC’s most recent WICA reset request, making it necessary to file for a general rate review.


 

Aquarion has worked hard to contain costs in order to file a rate application that addresses the Company’s needs and obligations while remaining sensitive to the economic challenges facing our customers.  While the Company has achieved substantial cost-savings in our operations, key infrastructure investments and increased expenses have made it necessary for us to seek an adjustment with PURA.

The Company has taken proactive steps to mitigate additional impacts on ratepayers.  This includes refinancing existing debt which has reduced the overall cost of debt by 100bps. Customers also benefitted from the Tax Cuts and Jobs Act of 2017 which reduced the federal income tax paid by AWC and will result in savings for AWC ratepayers.  Further, AWC has implemented a range of conservation measures which reduce water consumption, and in turn, expenses. 

While committed to making vital investments in infrastructure, Aquarion recognizes the budget challenges facing families, businesses and communities around the state.  The Company has continued to make streamlined operations a top priority, and as a result has achieved industry-leading efficiencies.  

We are also aware that some of our customers continue to face financial challenges.  That is why Aquarion continues to offer flexible, extended payment plans for any past due amount as well as a customer assistance program to help eligible customers who are having difficulty paying their water bill.

Payment plans allow customers to pay past due balances over a period of up to twenty-four months and guarantees no service disconnection as long as the approved payment amount is made for the duration of the plan. With a payment plan, customers are not required to make a down payment, and will avoid fees and interest charges for the duration of the plan.  Additionally, qualifying customers may also be eligible to receive a one-time assistance voucher in the amount of $50 to $250.  

We have also proposed the expansion of our customer assistance program, offering a 15% bill discount for eligible, low-income customers. This assistance program is in addition to our voucher and payment plan programs designed to help customers that may have difficulty paying their bills.

In recognition of the financial hardships experienced by Aquarion’s low and mid-level residential consumers of water service, the Company’s application will propose rate design offerings and other initiatives designed to more equitably allocate system costs in light of the hardships that customers are experiencing, particularly the Company’s most vulnerable customers.  The Company’s proposals will be designed to mitigate the impacts of a rate increase on low to mid-level users, while encouraging higher volume residential customers to conserve.

Customers are welcome to provide comments on the application at any of the hearings, or electronically through the PURA web-filing system or by email to Pura.ExecutiveSecretary@ct.gov.

Instruction on how to use the web-filing system may be found at: https://portal.ct.gov/PURA/Consumer-Services/File-a-Public-Comment/File-a-Public-Comment.

Electronic comment submission is preferred, but in the event comments cannot be submitted electronically, they may be sent via mail to:

PURA
Ten Franklin Square
New Britain, CT 06051

Please refer to Docket Number 22-07-01 in any written or electronic correspondence. If you have any questions about the public hearings, contact PURA at (800) 382-4586 (toll-free in CT).

Aquarion has invested varied amounts of capital in its systems based on the size of its customer base. Rates can also vary when Aquarion purchases systems with lower rates or with contributed plant.  In this rate review application, the Company is proposing to continue the process of equalizing rates across all its service territory.


Aquarion rates are among the most affordable in the industry and will remain so even with the proposed rates. 

The Company has worked diligently to limit annual expense growth since the last rate case to under 3%.  Even with these efforts manage significant rises in a number of operating expenses were experienced, including:

  • Labor
  • Property tax increases
  • Medical
  • Water treatment chemicals
  • Electricity
 

It has been nine years since Aquarion customers have seen a base rate increase - there aren’t too many items that have stayed at the same price for the last nine years.  

The typical family of four uses approximately 200 gallons of water a day for cooking, washing, laundry and other uses.  If approved, the average total cost to AWC’s customers would be approximately 0.01 cents per gallon or $1.83 per day, comparing very favorably to other typical household expenses. 

In addition to providing high-quality water and reliable service, private water utilities such as Aquarion help to support local, state, and federal budgets by paying income and business taxes, as well as real estate and property taxes.  In 2021, AWC paid approximately $16.2 million in property taxes alone in the towns and cities that we serve. Because private utilities are investor-owned, they must demonstrate continual operations efficiency to reduce costs, maintain reliable service, and develop long-term water supply solutions.
The proposed residential inclining block rate structure calls for high volume customers to pay more than low volume users.  This rate structure is designed to mitigate the impacts of a rate increase on low to mid-level users, while encouraging high volume residential customers to conserve.  Inclining block rates offer a means to reduce water consumption, reward customers for choosing efficient water appliances, and encourage efficient discretionary water uses such as landscape irrigation.

AWC operates as a wholly-owned subsidiary of Eversource after the Company completed its acquisition of Aquarion in 2017. Our complimentary service territory includes Western, North Central, and Eastern Connecticut as well as areas in Massachusetts and New Hampshire. As part of Eversource, AWC remains a locally-owned company, however, we now have access to the strongest balance sheet in the industry which provides us with the resources we need for investments to ensure we continue to deliver the highest quality water and superior service to our customers. 
AWC remains locally operated and led as it has been since 1857, with our headquarters in Bridgeport, CT. We are proud of our legacy of delivering superior customer satisfaction, which includes top customer favorability ratings, and we share with Eversource the commitment to operational excellence in the communities we serve. In fact, when approving Eversource’s acquisition of AWC, some of the attributes of the transaction that regulators cited as particularly beneficial to customers were local ownership, financial stability, and community support.   

PURA is statutorily charged with regulating the rates and services of CT’s investor owned utilities and balances the public’s right to safe, adequate, and reliable utility service at reasonable rates with the provider’s right to a reasonable return on its investment. During the PURA review process, the agency will hold a public hearing no later than 60 days after the rate application is filed and will promote the hearing, so customers have ample opportunity to express their views. 
The “Take Back Our Grid” legislation includes provisions that impact all utilities including electric, gas, water, and telecommunication companies. The legislation created a performance-based system to determine rates, penalizes utilities for extended services interruptions, and compensates customers who have lost food or emergency supplies of medications due to the interruption. 

Aquarion’s last rate case was in 2013.  The current rate adjustment request reflects the Company’s need to recover $740  million in water utility infrastructure investments and to address increased costs in doing business.

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