Attorney General Jepsen to PURA: Aquarion Proposed Rate Increase Excessive

Attorney General George Jepsen has asked the state Public Utilities Regulatory Authority (PURA) to reject Aquarion's application to increase customer rates by $33 million over three years, according to a release from Jepsen's office.

In a brief filed with PURA late Thursday, the Attorney General argued that Aquarion failed to meet its burden of showing that such a large rate increase is necessary or appropriate.

“Utility companies are, by law, allowed to charge customers rates that are just and reasonable,” said Attorney General Jepsen. “I have asked that PURA reject this rate application and spare ratepayers an unnecessary and excessive increase to their water bills.”

Aquarion has requested a rate increase of $27.2 million in the first year of a three-year rate period, according to the release, with additional increases of more than $3 million per year in the second and third years. The rate increase would average more than 17 percent across its service area in the first year, with a total increase of more than 23 percent over the three-year period. Aquarion has also asked for an increase in its return on equity (ROE) to 10.6 percent.

According to the Attorney General, the requested increase is “excessive and unwarranted.” Rather, under adjustments the Attorney General recommends, Aquarion’s proposed revenue requirement would decrease by more than $20 million per year. The Attorney General also supports an ROE of 8.53 percent as recommended by the Office of Consumer Counsel.

Aquarion is the largest water company in the state, serving more than 625,000 people in 47 municipalities, and it has acquired 57 new water systems since its last rate case in 2010, and according to Jepsen's release, it was granted a $15 million, or 11 percent, rate increase in the 2010 case. The company’s rates have increased steadily since 2007.