CT's WATER FOR SALE: San Jose Water (SJW) of California is currently seeking regulatory approval to acquire CT Water Co., one of CT's largest private water utilities. Last year, Aquarion Water Co. was bought by Eversource. Who will have the right to store and distribute (i.e. control) large volumes of CT's water? Many, many questions are being raised. Is this in the public's best interest? What will be done with any lands SJW wishes to sell off? Will it support the proposed State Water Plan? Does it regard water as a public trust resource? Are there potential conflicts of interest, given SJW is an out-of-state for-profit company which also has interests in real estate development? Will it be a good steward of our water sources and water infrastructure? Hopefully CT is not to become the land of "water opportunity" with a reasonably plentiful supply and "a favorable regulatory climate".


PLEASE SEE RIVERS ALLIANCE WEBSITE http://www.riversalliance.org/Top…/Water_Infrastructure.php… for an in-depth discussion. Details on submitting a comment or question to the Public Utilities Regulatory Agency, are also provided there: Docket # 18-07-10.

Save Our Water CT has submitted the following comments and questions to the Public Utility Regulatory Agency for its consideration in this deliberation:

September 2, 2018
Re:  Docket 18-07-10 [Application of SJW Group and Connecticut Water Service, Inc. for Approval of Change of Control].
 
We are writing on behalf of Save Our Water CT to share our concerns regarding the acquisition of Connecticut Water Service, Inc. by SJW Group. 
 
Save Our Water CT is a citizen-activist group that formed in early 2016 in response to Niagara Bottling’s negotiations with the Metropolitan District Commission (MDC) and the Town of Bloomfield to bring a large water bottling plant to Bloomfield.  In 2012 the MDC proposed an 18 mile out-of-basin transfer of water to UConn.  During the last two and a half years we have witnessed a serious, prolonged state drought; a reluctance and outright refusal by water utilities to publicly release non-security-sensitive water supply plan details; industrial rate discounting of water that rewards increased usage as opposed to conservation; and the opposition of the business and water utility lobby to the already-established statute referencing water as a public trust resource (CT G.S. 22a-15). Consequently, we have been following news of the proposed “change of control” of Connecticut Water Service with interest.  Quoting briefly from page 3 of the joint application: 
 
“The Authority has also found that it has a statutory responsibility, inherent under Title 16 of the General Statutes, to ensure that the change of control is in the public interest…… The change of control is in the public interest as it is expected to provide benefits to customers by providing opportunities to increase the reliability and adequacy of water service, to increase access to capital, and to improve customer service. Moreover, in the long run the Transaction will provide opportunities to reduce costs through economies of scale and operating efficiencies which will benefit customers by exerting downward pressure on rates.” 
 
Our expectation and hope is that PURA will take a sufficiently broad view of what constitutes “the public interest” in considering this application.  We think that Connecticut state agencies have an obligation to consider long-term impacts on all Connecticut citizens and on the environment in proposed “changes in control” of public trust resources – not just the proposed new company’s customers.
 
Apart from the question of whether the proposed acquisition would actually deliver to customers those purported benefits it is “expected” to provide, the acquisition would impact more than the company’s customers.  For example:

• What about the potential sale of undeveloped land that SJW deems unessential?  The list of commitments on page 9 of the application does not include any representations regarding potential disposition of land holdings. Class III watershed lands act as important forested buffers, provide open space for CT communities, and serve as prime ecological resources. Will SJW, for example, commit to first offering any “unwanted” land to conservation interests? Are SJW stockholders also involved in real estate development, which could lead to conflicts of interest in determining the disposition of land?
• What would be the impact of future offers for the company?  It’s increasingly apparent that water is a “growth” industry.  What guarantees do we have that any representations made in this application would be honored if future company circumstances change? Or if a larger or even a foreign entity- acquires SJW at some future point?
• Current state regulations provide no oversight to large water transfers that happen within already registered diversions as long as the water utility maintains a margin of safety. Nor do they provide oversight to the transfer of water OUTSIDE an exclusive service area by truck (or non-piped means).  Is it in CT’s interest to allow transfer of Class A waters out of state?
• Why would the consolidation of utilities be considered a priori to be a good thing and in the public interest?  The argument made here is consolidation offers economies of scale, resulting in decreased costs and increased operational efficiencies.  Apart from the fact that promised expected gains are often not delivered, such consolidation often brings fewer resiliencies, especially in the events of natural disasters (becoming more prevalent with climate change).  When things break down, they break down on a large scale, with a corresponding ripple effect.  A good example is Eversource’s performance in the aftermath of Storm Alfred, the 2011 Halloween nor’easter.  The smaller utilities in Connecticut restored power much more quickly.  Local control delivered much better results.
• Does SJW view water as a public trust resource? What is their understanding of CT’s Gen. Statute 22a-15?  Have they reviewed the draft of CT’s first State Water Plan and will they support or oppose it?
• Is there any law or regulation that limits the ability of any private (or public) company or person from buying every water utility in Connecticut?  Does the (advisory) State Water Plan even address this issue?  SJW’s and CTWS’s joint press release from March 15, 2018 stated:  “The combined company will have a strong multi-state presence with high-quality and well-run operations, with constructive regulatory relationships in California, Connecticut, Maine, and Texas.” [emphasis added] What’s meant by “constructive” here?  Lack of adequate protections and regulation?  Given Mr. Thornburg’s background, he and the rest of the leadership team are well situated to navigate the regulatory landscape and exploit existing loopholes.  This concerns us, given our recent experience.

 
We hope that PURA will take time to thoroughly and thoughtfully review this application.  Connecticut water is a public trust resource and citizens are relying on you to safeguard that resource.
 
Thank you for your consideration.
 

The Tilcon proposal to expand into Class I and Class II watershed lands in exchange for money, the promise of a new reservoir 40 years from now, and less valuable acreage appears to be dead.  At least for now..

On Aug. 22, 2018, Mayor Erin Stewart submitted a letter to the Water Planning Council (W.P.C.) withdrawing the city's proposal in light of significant public opposition and the need for further review "before any such project could move forward".  On Aug. 24th the W.P.C. in turn forwarded to the CT. General Assembly its review of the environmental study. It found serious flaws in the argument that this proposal would be beneficial to New Britain's water supply....and in addition found that the risks posed to the environment by the project were significant.  (See the WPC letter below).

This is the second time in which Tilcon and the City of New Britain have attempted to skirt the process of obtaining a permit from the D.P.H. to impact Class I and II watersheds.  Knowing that such an application was unlikely to be approved, they instead turned to the legislature to bypass environmental regulations- and nearly succeeded in doing so. The Mayor's letter leaves open an implicit suggestion that a resurrection of the deal is a possibility, and the citizens of CT will need to remain vigilant .

It was largely with the activism of Atty Paul Zagorsky and other members of Protect Our Watersheds CT that this round was won.