Conn. AG asks PURA to deny Aquarion rate increase application

By Bryan Cohen | Jul 19, 2013

HARTFORD, Conn. (Legal Newsline) -- Connecticut Attorney General George Jepsen filed a brief on Thursday with the Public Utilities Regulatory Authority requesting the authority reject a water company's application to increase customer rates by $33 million over three years.

Jepsen argued that Aquarion Water Company of Connecticut failed to meet the burden of showing that such a significant rate increase is necessary or appropriate.

"Utility companies are, by law, allowed to charge customers rates that are just and reasonable," the attorney general said. "Aquarion's proposed rates far exceed levels that could be considered just and reasonable and are unwarranted at this time.

"I have asked that PURA reject this rate application and spare ratepayers an unnecessary and excessive increase to their water bills."

Aquarion requested a $27.2 million rate increase in the first year of a three-year period, with added increases of more than $3 million per year in the second and third years. The rate increase would average more than 17 percent in its first year and a total increase of more than 23 percent during the three-year period.

Aquarion also requested an increase in its return on equity to 10.6 percent.

Jepsen recommended under adjustments to reduce Aquarion's proposed revenue requirement by more than $20 million per year. Jepsen supports an ROE of 8.53 percent, a figure recommended by the Office of Consumer Counsel.

Aquarion is Connecticut's largest water company, serving more than 625,000 people in 47 municipalities. The company acquired 57 new water systems since its last rate case in 2010. Aquarion was granted an 11 percent increase, equal to $15 million, during the 2010 case.

Since 2007, Aquarion's rates increased steadily.

Jepsen anticipates a final decision from PURA in the rate case in August.

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