By Sentinel Staff
State utility regulators on Wednesday approved the sale of Aquarion Water Co. to a new Aquarion Water Authority tied to the South Central Connecticut Regional Water Authority, reviving a transaction that Public Utilities Regulatory Authority commissioners had rejected in November and setting up a new round of political and legal conflict over water rates, oversight and local control.
The March 25 decision marks the latest turn in one of Connecticut’s most contested utility fights. PURA had blocked the deal on November 19, 2025, after opponents argued that the proposed acquisition exposed customers to steep long-term rate increases and weakened consumer protections. But in January, Superior Court Judge Matthew Budzik sent the case back to PURA for further proceedings, ruling that the agency had erred when it relied on objections to the managerial and governance structure that the legislature had already authorized. Earlier this month, regulators signaled the reversal in a draft decision, and on Wednesday they made it final.
That reversal immediately drew sharp criticism from state Consumer Counsel Claire Coleman, whose office has opposed the deal throughout the case. In a statement issued Wednesday, Coleman said the approval “saddles Aquarion ratepayers with approximately $5.9 billion of acquisition debt and financing costs, including roughly $3.646 billion in interest on a $2.249 billion principal purchase price.” She said the transaction would impose “immediate and sustained bill increases” and added that her office is “evaluating all available options to protect the Aquarion customers that will have to live through the results of this decision.” The Office of Consumer Counsel identifies itself as the independent state agency charged with representing consumers before PURA, the legislature and the courts.
State Sen. Ryan Fazio, whose district includes Greenwich and New Canaan and who is running for Governor, also renewed his attack on the transaction Wednesday. “For nearly two years, since this issue arose out of nowhere, I have said that this deal stinks for utility customers across Connecticut,” Fazio said in a statement released after the ruling. “From the beginning, it was clear this was a bad deal for ratepayers and transparency.” He said he had introduced legislation in 2024, 2025 and 2026 to undo the legal authorization for the merger, and faulted Gov. Ned Lamont and Democratic lawmakers for allowing it to proceed. Those legislative efforts came against the background of a larger debate this month over whether PURA should continue to regulate rates if Aquarion moves into a quasi-public structure.
Fazio’s Wednesday statement sharpened the political argument that he and other opponents have made since the sale first surfaced. “Permission for this deal was rushed through the legislative process without a public hearing, without proper vetting, and without giving the public a meaningful voice,” he said. He added that the sale “will take away consumer protections, lead to increased costs for consumers, and it will also put RWA customers at risk of greater operational liabilities of a quasi-governmental body that is now tripling in size.” He closed by saying, “Now that this decision has been finalized, I will continue to fight for relief for utility consumers while the governor and Democratic leadership sit on their hands.” Fazio had previously described the proposal as a threat to PURA oversight and warned that customers in western Connecticut could face unchecked water-rate increases if the company left the traditional investor-owned utility model.
First Selectman Dionna Carlson responded in more restrained but still pointed terms. “We are disappointed with PURA’s reversal on this critical issue, and we believe that the court and now PURA improperly limited the scope of PURA’s review – while also ignoring the unanimous opposition of the impacted towns,” Carlson said in a statement Wednesday. “We are working with our attorneys to consider next steps.” Her statement follows nearly two years of organized resistance from municipalities that argued the deal could strip them of tax revenue, diminish local representation and leave residents exposed to larger future rate increases. According to the Town of New Canaan, Carlson testified at a 2024 public hearing with concerns about the possible negative effects on the town, and New Canaan later said Carlson joined leaders from Fairfield, Ridgefield and Westport in leading opposition to the sale.
The heart of the dispute has been simple to describe and difficult to resolve. Supporters of the sale have argued that public or quasi-public ownership would remove the profit motive, allow lower-cost financing and place a major water system under more local control. Opponents have argued that the purchase price is too high, the debt burden too large and the oversight structure too weak to protect customers from years of rising bills. According to recent reporting on the PURA proceedings, critics of the sale pointed to projections showing annual rate increases of as much as 8.35 percent through 2035, while supporters responded that customers would not bear the transaction’s financing burden in the way critics claimed and promised no rate increases for at least six months after closing.
The court remand in January did not settle that policy dispute. It narrowed the legal ground on which PURA could act. According to the Superior Court ruling, the agency could continue to evaluate whether the deal served the public interest, but it could not reject the transaction solely because it disapproved of a governance structure already authorized by the General Assembly. That legal constraint appeared to drive the agency’s change in direction this month. In the March 6 draft decision, PURA said the proposed transaction was “reasonably aligned with the public’s interest,” while also making clear that regulators still had serious concerns about its potential effects. Coleman seized on that tension in her Wednesday statement, noting PURA’s own finding that the purchase price placed the deal on “the knife’s edge of a public interest finding.”
What happens next is no longer a question of whether the sale can clear PURA. It now turns on whether opponents can stop or alter the transaction through the courts, through legislation, or through added oversight after the fact. This month, lawmakers floated House Bill 5249 as a late effort to preserve PURA authority over a large quasi-public water utility, a sign that even as the regulators were preparing to approve the sale, concern remained strong in Hartford over rates and accountability. Carlson said Wednesday that New Canaan is weighing legal options. Coleman said her office is reviewing all available paths to protect ratepayers. Fazio said he will continue pressing for relief. The approval closed one chapter of the Aquarion fight. It did not end it.
