Aquarion rate request for Greenwich opposed by CT Attorney General
By Louis Porter
August 20, 2004
State Attorney General Richard Blumenthal is trying to block a proposed
14 percent rate increase by Aquarion Water Co. of Connecticut.
Aquarion, whose parent company is United Kingdom-based Kelda Group,
wants to increase water rates to offset about $150 million in
investments made in the past eight years, according to the company.
The rate increase would cost Aquarion's 174,000 customers about $16
million a year. Blumenthal said the increase is unnecessary.
"Maintaining Aquarion's rates at their current levels will provide
rates that are just and reasonable," Blumenthal said in a brief
filed with the state's Department of Public Utility Control, which is
evaluating the rate increase.
The department will have an initial decision on the case by Sept. 27 and
a final decision by Oct. 27, said Beryl Lyons, spokeswoman for the DPUC.
Blumenthal's office is a participant in the case, she said.
The DPUC establishes how much utilities such as Aquarion can make on the
money they invest in their systems. The 11.25 percent rate of return
requested by Aquarion is "grossly excessive," the attorney
Blumenthal's brief says the company should control capital spending and
only get a 9.5 percent rate of return, as recommended by the office of
the consumer counsel.
Aquarion also has not given customers their full share of the profits
from a $90 million land sale to the state, Blumenthal said. Aquarion has
kept much of the customers share of that money -- about $4.9 million --
as an "interest-free loan" and proposes to keep it until the
next rate case, Blumenthal said in a statement.
Aquarion spokeswoman Adrienne Vaughan declined to comment on
"Aquarion, since it last filed for a rate increase in 1996, eight
years ago, has invested $151.5 million to improve the water system
throughout the state of Connecticut," she said. "That
investment was made not because this is an inefficient company."
Aquarion is requesting an increase in its rate of return in part because
of its good management. Blumenthal said that request also should be
That increase for management would result in a $1 million increase in
costs to ratepayers, according to the attorney general's brief.
The DPUC "should reject this proposal as simply a $1 million a year
give-a-way by rate-payers to the company," it states.
Aquarion already has an obligation to provide excellent service in
exchange for collecting rates approved by the DPUC, according to the
brief. "To the contrary, the record in this proceeding shows that
Aquarion has shown a pattern of ignoring repeated customer complaints
and then acting to correct the problem only after the intervention of
the DPUC," according to Blumenthal.
Vaughan said only about 34 customers spoke out against the increases in
a series of hearings on the issue around the company's service area, she
"They understand the value of pure, abundant drinking water,"
Vaughan said. "That is why the DPUC is there. They have considered
the application and they will make a decision that is fair to our
customers and the Aquarion Water Company."
In Stamford, Blumenthal's objection to the rate increase is being
followed closely said Ben Barnes, the city's director of administration.
"Unfortunately, we don't have the resources to do the kind of
analysis that the attorney general has done on their proposal,"
Barnes said. "I have to rely somewhat on his conclusions, but it
does match up with what I suspected."
"I am encouraged to see that there are two sides to this
debate," Barnes added.