HARTFORD, Conn. (Legal Newsline) - Connecticut Attorney General George Jepsen and Consumer Counsel Elin Katz announced a settlement Tuesday with Connecticut Water Co. that will reduce rates for the utility's customers.
The state's Public Utilities Regulatory Authority agreed late on Friday to approve a settlement that would reduce Connecticut Water Co. customer rates by an estimated 6.4 percent starting onApril 1. Customers will be credited approximately $10 million in refunds Connecticut Water anticipates from the federal Internal Revenue Service as a result of a recent clarification of the repair tax deduction credit.
Jepsen and Katz negotiated the settlement with Connecticut Water, which also includes an agreement not to seek a general rate increase until 2015 and to delay until July a rate adjustment for conservation and infrastructure improvements.
"This settlement is a fair compromise that will lower bills for Connecticut Water's 90,000 customers and stabilize rates for the near future," Jepsen said.
Jepsen and Katz also asked PURA to look into use of possible tax refunds from the RTDC on other public utility companies, including United Illuminating, Connecticut Light & Power Co. and Aquarion Water Company. The RTDC could result in millions more in savings for other utility customers.
In March 2012, the IRS issued new procedures allowing businesses to adopt an alternative method of determining how they treat capital expenditures for federal tax purposes. The IRS now permits certain qualified capital spending related to repair and maintenance of a utility plant to be deducted as an expense. The regulations also allowed the companies to reach back for taxes paid in the last three years.
The $10 million Connecticut Water customers may receive represents the federal income taxes paid by the company between 2010 and 2012. The exact amount of the refund will be known early next year.