Utility regulators in Connecticut have issued a draft decision that might block a major water company takeover. The deal would see Connecticut Water Service bought out by a California company.
The battle over the future of Clinton-based Connecticut Water has already been long and bitter. Local utility giant Eversource had traded bids with San Jose Water over the summer, claiming local control was the best option.
But Connecticut Water’s board eventually chose the California company in a $1.1 billion acquisition.
But the Public Utilities Regulatory Authority, or PURA, which must sign off on the deal, said in a draft decision Tuesday that it is minded to block the deal.
PURA has concerns about financial risks and about SJW’s lack of a binding commitment to maintain a headquarters or a minimum number of jobs in Connecticut.
Joseph Rosenthal is with the Office of Consumer Council - the watchdog body for utility consumers. He told Connecticut Public Radio he’s surprised by PURA’s decision. "There’s value in local control and we did see continuing local authority through this transaction" he said. "But there's also value to having utilities be parts of larger entities, there’s cost savings involved, and access to financing can be improved, so there are trade offs."
PURA could change its mind before it issues its final decision next week and it says it will hear arguments from interested parties.
SJW issued a statement saying it will continue to work with regulators to demonstrate that the merger is in the public interest and could deliver benefits to employees, customers and Connecticut communities.
Rival bidder Eversource has yet to comment on the development.
Connecticut Water and its subsidiaries provide water to more than 450,000 households in Connecticut and Maine.