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Life seems to flow slowly, timelessly, inside the gates of the Kelseytown Reservoir in the upper reaches of Clinton, nestled in the Cockaponset State Forest far from Route 1 and the bustling shoreline.
There, the Connecticut Water Co. has operated one of its five surface water treatment plants since 1980, turning out up to 4 million drinkable gallons a day with just a few people watching over the pipes, valves and holding tanks in a ballet of nature and chemistry. Kelseytown has hydrated local customers since 1904, long before Connecticut Water formed.
It's a calming scene but as Paul Andrews, the company's water treatment plant supervisor, leads me on the water's path, the reality comes clear: This treatment plant, with $12 million in new upgrades just in the last five years, is part of a complex, expensive and changing water landscape in a state that still has some 400 independent, community water systems.
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We are about to see a rate hike request from Connecticut Water to the state's Public Utilities Regulatory Authority, a case that will test the for-profit company's claim that it needs more money to modernize its home state's water purification and delivery. The company is expected to file preliminary papers for the rate case this week and while executives aren't saying the percent increase they will seek, it could be substantial.
This rate case comes at a watershed moment, pardon the pun. Regulators are not in a generous mood these days with utilities when it comes to spending customers' money. PURA, as the authority is known, has just whacked two utilities -- Aquarion, the state's largest water supplier, and United Illuminating, the electric company in parts of Fairfield and New Haven counties -- in rebukes that were heroic to weary ratepayers but bloody to the utilities crying foul.
Now comes Connecticut Water Co. with its bid. Third sacrificial lamb in the lion's den? No, says Craig Patla, the company president. He's confident that his company has the culture regulators want to see as they embrace something called performance-based ratemaking, driven by new state legislation.
"Connecticut Water is confident that our record of serving customers, communities, employees and the environment does make us a different kind of utility and in going through the rigorous process of a general rate case, we’ll get to proof that out," Patla said. "We are ready and willing to meet the standards of prudency and service to stakeholders that the authority has set.”
Balance among 'building blocks'
Patla, sitting in his company's modest offices on Route 1 in Clinton, described the five "building blocks" of Connecticut Water: employees, customers, shareholders, communities and the environment.
"We believe strongly that when we have balance for those five building blocks that we will achieve success for all of those building blocks," Patla said. "We measure our employee satisfaction twice a year. We measure our customer satisfaction twice a year."
A longtime industry veteran, Patla doesn't see a fight, but rather a sort of kumbaya moment -- my words -- that will bring out a different reaction from the PURA lion, when it comes to weighing the company's performance, not just reimbursing it for spending money.
"We welcome that concept," Patla told me. "A lot of the metrics around performance, we excel at...We don’t fear it because we perform well in the components that are being measured."
I have no way to judge the merits of Patla's claim that his company is a different kind of utility. In theory, a utility of any kind ought to be able to use larger size to shave costs for customers. That never seems to work out. So regulators closely monitor shareholder profits. Connecticut Water, which owns a water company in Maine, was bought out in 2019 by SJW Group, the publicly traded parent of the San Jose Water Co. in California.
Like its larger competitor, Aquarion, Connecticut Water has been buying up many of the old community water works, at their request. These tiny systems might have lower rates but many of them can't do the job anymore in an age of droughts and severe storms caused by climate change; PFAS and other emerging contaminants; tighter regulations; declining volunteer ranks; and aging infrastructure that these providers on old wells have let slip.
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Connecticut Water, with about 110,000 customers in Connecticut and 232 employees, runs 66 non-connected water systems in 60 cities and towns, some with just one or two wells.
Following two tough rulings
All of that requires big ongoing investments. But in March, PURA whacked Aquarion's $32 million rate hike request down not just to zero, but to a $2 million giveback for customers. Aquarion, a unit of Eversource, the giant regional electric utility, filed a lawsuit. A state judge issued a rare stay of the rate reduction in May and the case is pending.
Then last week, PURA allowed just $23 million of a $131 million rate hike request from United Illuminating, after a July draft decision that would have left UI with less than $2 million more from ratepayers. UI has not said whether it will appeal in the courts.
Connecticut Water's rate request follows a 2021 rate case that gave the company a 7.1 percent average increase, or about $7.3 million. Patla talks about the company's efforts to encourage water conservation -- not easy in a part of the world where life's liquid runs in abundance most of the time -- and he talks about those building blocks.
"I would make the argument that pursuit of balance really sets us apart," he said.
We'll see how that goes in the hearings.
Back at the treatment plant at the Kelseytown Reservoir, we see water flowing into tanks with compounds that make particles come together to form "floc" sludge, then we see the water filtering up through that sludge, then filtering through four feet of granular, activated carbon. Then the system adds lime, phosphate, chlorine and fluoride in critical amounts with disastrous results if done incorrectly.
Making filtered water from raw water, as Paul Andrews calls it, requires a different kind of balance than what Patla describes. Different, but related through the modernization of a fractured industry. The question is how much we the drinking, flushing, showering, washing and lawn-watering public need to pay to make it flow.