Aquarion increase faces rough water

drinking waterAs Aquarion Water Company prepares to move forward with a rate hike, it held a hearing on the matter earlier this month in Fairfield that elicited so much response that another one will soon be scheduled.

And Perhaps David Rosenstein of Southport best expressed the frustration of many who attended the June 18 hearing on the  proposed rate increase when he said, “Water, water everywhere, but too expensive to drink.”

The crowd wanting to speak about a proposed 23% increase proposed by Aquarion Water Company spilled out of its assigned conference room and into the halls of Sullivan Independence Hall in Fairfield. The hearing was one of four sessions originally scheduled around the state, but it was the only one in this area at which those who would be affected by the rate hike could share their opinions.

No hearing will be held in Greenwich.

When Michael Herley, a member of Fairfield’s Representative Town Meeting, complained that the public was not being served by the proceedings, as many could not get in the room, Public Utilities Regulatory Agency Vice Chairman John Betkoski III announced that he would order another public meeting in Fairfield.

“I work out of town. I’m from Bridgeport,” Denise Anderson said. “Bridgeport has the largest populace in the state. Why isn’t there a meeting being held in Bridgeport? All consumers are important.”

Mr. Herley accused Aquarion of “trying to score a trifecta, raising the rates on residential, municipalities and local business. When you do that the victims are the consumers.”

“I am a small business owner in town as well as a representative,” State Rep. Brenda Kupchick of Fairfield (R-132) said. “I can’t imagine adding a 20% cost to all of our services. I’d be out of business. This is not the type of thing where people can say. ‘I no longer want this thing.’ We need the water. People are understandably upset.”

The hearing, conducted by the Public Utilities Regulatory Agency (PURA), was presided over by Mr. Betkoski and Director Michael Caron.

PURA’s job is to “balance the public’s right to safe, adequate and reliable utility service at reasonable rates with the provider’s right to a reasonable return on its investment.”

Aquarion declined to answer questions at the hearing. Representatives from the company did appear before the Greenwich Board of Selectmen in April. The company has said that the increase is necessary to meet the demands of improving and repairing water pipe infrastructure.

“We are sensitive,” Aquarion Vice President of Corporate Communications Bruce Silverstone said in Greenwich in April. “We know that this is perhaps at a time when customers are struggling to pay their other bills and their other utility costs. But I need to tell you that we have worked hard to contain costs and streamline our operations. We have filed a rate application that addresses the company’s needs while remaining sensitive to the economic realities our customers face.”

Critics of the increase, though, say it is far too high.

“Twenty percent,” Fairfield First Selectman Michael Tetreau said at the June 18 hearing, “is too much,” noting that the increase would mean $200,000 a year to the town.

“Does it really cost 20% more,” he asked, “to deliver the same water through the same pipes to the same people as it did last year?”

Reminding PURA that 47 towns and more than 625,000 customers face the increase, Mr. Tetreau called for an independent financial review of Aquarion, “to certify that there are no leaks in the financial system, that there’s a proper a financial plan in place prior to any new increases. If this can happen this year, what’s to keep it from happening in future years? How do we know that our water system is safe, secure and financially sound?”

“Is our water supply in jeopardy due to lack of control or poor financial management?” he asked.

In its application to PURA, Aquarion cited such costs as significant declines in consumption and investments in system upgrades and infrastructure.

“We have been paying as ratepayers into an infrastructure cost for many years,” Ms. Kupchick said, referring to the Water Infrastructure and Conservation Adjustment (WICA), included in bills to cover replacement of water pipes and related systems.

Some speakers wondered if Aquarion might use the extra revenue to purchase several water companies at ratepayers’ expense. Others asked if infrastructure money might be directed toward paying for improvements to outdated systems and still others alleged excessive executive salaries were really to blame for the rate hike. Aquarion was purchased by Macquarie, an Australian financial investment bank, in 2006.

“Aquarion has been using high rate increases since being bought by Macquarie to enrich its top management, its private equity owners, and to finance its strategy of expansion for the sake of long-term revenue growth and earnings growth and ultimately higher corporate value for the owners,” said John Levinson, who said he has a background as a securities analyst.

Joseph Knapik of Shelton reminded PURA that the proposed increase was 18.8% above the rate of inflation.

“Approximately three years ago Aquarion received a 15% increase,” Mr. Knapik said. “Aquarion used the last increase to purchase several water companies at ratepayers’ expense. Let this monopoly pay for its own expansion, not the citizen ratepayers.”

Mr. Levinson also noted that for the nine years before Macquarie’s purchase there was a 0% increase in water rates. Since the company was acquired rates have gone up 31%, he said.

“I am a homemaker and I pay the bills. I can’t believe what’s going on,” Jenny Gillis said. “I looked through several years of bills. Even doing what we can to conserve the water, my bills have stayed the same. We are encouraged to conserve and be aware of this precious resource and now it’s being given over to a monopoly. I’m just disgusted.”

Among those displaced from the main room was State Sen. John McKinney of Fairfield (R-28), who waited in the hallway.

“People can’t take it anymore. The cost of everything is going up — everything is going up except our salaries. People cannot continue to pay more and more, especially those on fixed incomes,” Mr. McKinney, the state senate’s minority leader and a potential gubernatorial candidate in 2014, said,

“I would ask you to not to fall into the trap that this is pennies per day or dollars per month,” he added. “This is a 23% increase over three years and it’s simply unaffordable and unacceptable.”

While awaiting word of the additional hearing, Aquarion customers may send comments either in writing to PURA at 10 Franklin Square, New Britain, CT 06051, or by email to [email protected] Correspondence should be noted with docket number 13-02-20 so it can be entered into the testimony.

“The Office of the Attorney General is actively participating in the PURA proceedings, and we will examine the evidence and each aspect of the proposal to ensure customers pay no more than is just and reasonable,” Jaclyn Falkowski, executive assistant for press and communications at Attorney General George Jepsen’s office, said in a statement. “Aquarion’s rate increase application has, understandably, generated a tremendous amount of public opposition, as evidenced by the many hundreds of complaints filed with PURA in opposition to the proposal.”

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