In a brief filed on Thursday with the Public Utilities Regulatory Authority (PURA), Attorney General William Tong urged regulators to reject an “excessive and unwarranted” request by Eversource-owned Aquarion Water Company to raise its rates by 27 percent over three years.
Though this is the first time Aquarion has attempted to raise rates since Eversource acquired the company in 2017, Aquarion has previously imposed a series of escalating Water Infrastructure and Conservation Adjustment surcharges. According to the brief, Aquarion’s proposed rate hike would represent an increase of $50 million.
The brief identifies several problems with Aquarion’s proposal, including the return on equity (ROE) sought by the company, which it states is based on “a biased analysis and is inconsistent with current market conditions and recent Authority decisions”. Additionally, the brief states that the proposed ROE is “far too high” and its proposed capital structure is “uneconomic and burdensome”.
According to the brief, Aquarion also overstated a number of its proposed expense items, including plant additions, executive retirement expenses, directors and officers liability insurance and incentive compensation. The brief urges PURA to reject the use of ratepayer funds for $1.4 million in bonus pay, incentives for the acquisition of smaller unprofitable water systems and reimbursements for incomplete infrastructure projects.
“The Company has failed to meet its burden of showing that such a large rate increase is necessary or appropriate. To the contrary, the evidence in this proceeding clearly shows that Aquarion’s proposed rate increase is excessive and unwarranted,” Attorney General Tong states in the brief. “Connecticut consumers – especially those on fixed or limited incomes – are simply unable to absorb any further increases in their cost of living. These customers need the Authority and all of the participants in this proceeding to work to ensure that the water utility rates approved here will be no more than absolutely necessary.”
The adjustments proposed by the attorney general would reduce Aquarion’s proposed revenue requirement in the first year by more than $20 million, according to the brief, offsetting much of the company’s $27.5 million rate increase proposal.
The full brief can be viewed here.
