Water Industry News

Aquarion water company files for
up to 28 percent rate hike

By: Glenn M. Shafer , Staff Writer

VALLEY - Water rates may be on the rise. Aquarion Water Company has announced its intention to raise water rates for Simsbury, Granby, and East Granby customers by as much as 28 percent. Across the state, rates could increase on average 13 percent

When Aquarion purchased Village Water Company four years ago, residents were concerned with the threat of increased water rates because water would not be supplied by a locally owned company.

Aquarion, publicly traded on the London Stock Exchange, explained the need to raise water rates for infrastructure improvements. The State Department of Public Utility Control (DPUC) is currently reviewing the request.

A public hearing was held on June 15 at Simsbury High School, where state Sen. Thomas Herlihy (R-Simsbury) expressed his concerns. "I believe that these increases are excessive and that Aquarion's proposal should be denied on that basis alone," said Herlihy in a letter to Chairman Donald Downs at the Department of Public Utility Control. "Families and businesses in this region cannot sustain increases of this magnitude, especially when you consider that other utilities like electricity and commodities like gasoline are at an all time high."

For instance, According to Herlihy, there is a significant disparity between the rate increase in southeastern Connecticut compared to the increase in the northern region of the state. Mystic's rate increase is 8.36 percent. "I hope that Aquarion is not proposing that people in our region subsidize other areas of the state," said Herlihy. "We will pay our fair share of the necessary improvements in our towns but should not be asked to underwrite the costs in other towns." Herlihy is the ranking member of the legislature's Energy and Technology Committee.

David Balboni, former chairman of the board of Village Water Company, was the chief negotiator when Village Water sold to Aquarion. Balboni served Village Water as a board member for more than 20 years. "Aquarion took a pledge not to increase water rates for two years," said Balboni. "Four years later, they have filed an application."

According to state law, water companies that are privately owned or publicly traded must file with DPUC in order to raise water rates. Water companies owned by local municipalities are not required to file for water rate increases.

With matters of public health, the state Department of Public Health has control of all water companies. With matters regarding the environment, the state Department of Environmental Protection has jurisdiction of all water companies.

"The rate increase was a major concern," said Balboni. "The Simsbury Fire District wished to acquire Village Water Company. We had already signed a contract with Aquarion. We didn't know. We couldn't 'renege' on a contract. As the negotiator, Aquarion has met every condition of the sale. They have put in over $3 million dollars back into the system. The little fire station would not have done that."

According to Balboni, if the Simsbury Fire District purchased Village Water, they would have had to issue $10,000,000 in bonds. "The citizens and taxpayers have no obligation because Aquarion financed it," said Balboni. "Now Aquarion wants a modest increase. The reason the company was sold was because it was 90 years old. Expansion was required. The DPUC would not allow rate increases and drove us to be acquired. Who was the best acquirer? For the town, it has been an outstanding situation. Up until now, no water rate increases. Until now, four times lower than any other rate in the state. Local control would have been an anchor around the neck of the local citizens."

Aquarion Public Relations Manager Adrienne Vaughan cited the $151 million in improvements Aquarion has invested throughout Connecticut on infrastructure improvements and the low water rates that Aquarion inherited when they purchased Village Water Company four years ago as the two primary reasons it is time for a water rate hike. "The current rate is low," she said. "The last rate increase was in 1995 before we owned the water company. We inherited an old system that need significant updating."

By October, the DPUC will announce whether Aquarion will be allowed to raise water rates. The DPUC has the authority to dictate how much if any, the rates will rise.