Hartford Business Journal

HARTFORDBUSINESS.COM | JUNE 16, 2025 21 A Regional Water Authority crew works on a water line. Once Eversource completes its $2.4 billion sale of Aquarion Water Co. to the Aquarion Water Authority, Aquarion will operate as a quasi-public entity alongside the New Haven-based Regional Water Authority. CONTRIBUTED PHOTO Sea Change Eversource's $2.4B sale of Aquarion will create a new nonprofit water authority in CT — Backers say the deal could save $350M long term; others fear it will increase consumer costs will finance the acquisition largely by issuing tax-exempt bonds, she said. "There will be a sliver of taxable debt issued to cover non-allowable costs associated with the acquisition," Kowalski said. "No state money is being used to finance the transaction." However, not everyone is convinced the deal will be a good one for ratepayers. A contingent of towns, mostly in Fair- field County, say the sale may cause rates to increase for consumers and reduce local property tax revenues. There's also concern about the debt load AWA will be taking on to finance the deal. Six towns, including Fairfield, have been granted intervener status in PURA's review of the transaction. A hearing is scheduled for June 25. Cheaper capital Kowalski said AWA's ability to issue tax-exempt debt for capital improve- ments will allow it to finance infrastruc- ture improvements at a lower cost than a private company, which should mean lower rate increases for consumers in the long run. That's important because main- taining and upgrading Aquarion's massive infrastructure will require significant capital costs. Aquarion has a large footprint in Connecticut, operating eight reservoir systems, 251 wells and 18 interconnec- tions, from which it purchases water. It also operates nine surface water treatment plants that can treat up to 165 million gallons per day from reservoir systems; 72 groundwater treatment facilities that treat water from wells; along with roughly 3,300 miles of water mains, 88 water storage tanks and 87 pump stations. Since 2017, Aquarion said it has invested more than $900 million in utility facilities, information systems and other capital assets, according to its change- of-control application filed with PURA. However, the Aquarion Water Authority will be managing a smaller business than Eversource-owned Aquarion. That's because the AWA plans to sell off Aquarion's business outside of Connecticut (in New Hamp- shire and Massachusetts) to New Hampshire-based public utility holding company Unitil Corp. for $100 million. That deal was announced last month and will close when the Aquarion sale is completed. Regardless, through 2029, AWA said it plans to invest roughly $39 million in technology and other infrastructure, including PFAS mitigation. By Andrew Larson alarson@hartfordbusiness.com T he Aquarion Water Authority's (AWA) pending acquisition of Eversource-owned Aquarion Water Co. — which involves converting the company into a nonprofit, quasi- public entity — is expected to save at least $350 million over the first 10 years, once the deal is finalized. The projected savings will largely stem from AWA's ability to obtain capital at a lower cost, backers say. That's one of the interesting insights outlined in a change-of-control application submitted to the Public Utilities Regulatory Authority, which is reviewing and must approve the deal before it's finalized. In January, Eversource, which is publicly traded and owned by inves- tors, announced that it had reached an agreement to sell Aquarion Water Co. to the newly created, quasi-public Aquarion Water Authority, following a competitive bidding process. The deal, valued at about $2.4 billion, is expected to close in late 2025. When the sale is completed, AWA will operate as a standalone entity alongside another quasi-public water system, the New Haven-based South Central Connecticut Regional Water Authority (RWA). AWA will serve roughly 685,000 people in 59 Connecticut municipal- ities. It will share resources with the RWA, which serves 20 towns and cities, including a board of directors and executive staff. The two water authorities believe they will benefit from economies of scale and stronger purchasing power. Under the not-for- profit model, AWA will also be able to access tax-exempt debt to help mitigate the costs of capital expenditures and rate increases, said Rochelle Kowalski, chief financial officer of the RWA, who will hold the same title for the AWA. That's a key attraction of the deal for the Aquarion Water Authority, which Continued on next page CT's two quasi-public water authorities will share executive team, other resources By Andrew Larson alarson@hartfordbusiness.com W hen the Aquarion Water Authority (AWA) completes its acquisition of Eversource-owned Aquarion Water Co. later this year, it will appear on the surface to be the same company. The name will change slightly, but the Aquarion moniker will remain. However, the conversion of Aquarion from a publicly traded company to a not-for-profit, quasi- public entity means major changes to its governance, rate-setting process and capital budgeting. Once the deal closes, AWA will operate as a standalone entity, but share resources — including an exec- utive team — with a sister quasi-public water company, the New Haven-based South Central Connecticut Regional Water Authority (RWA), which serves 20 towns and cities. Sunder Lakshminarayanan, who is interim president and CEO of the Regional Water Authority, will hold the same title at AWA. Lucia A. Teixeira, Aquarion Water Co.'s president and chief operating officer, will be AWA's president. RWA Chief Financial Officer Rochelle Kowalski will hold the same title at AWA. AWA and RWA will also be overseen by two separate boards, but they will be composed of the same 11 people. AWA will also appoint a represen- tative policy board that will review and approve future rates. That's in contrast to the current process, through which Aquarion's rates are approved by the Public Utilities Regulatory Authority. Rochelle Kowalski

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