Are Aquarion Water Company customers about to get hosed?

In a stunning reversal, state utility regulators approved a multibillion-dollar takeover of Aquarion on Wednesday – just four months after they rejected the sale.

Customers will likely pay higher bills, but supporters insisted it's a better deal in the long run.

Approximately 700,000 customers across western Connecticut are getting a new water company.

On Wednesday, the Public Utilities Regulatory Authority approved Eversource's request to sell Aquarion to the South Central Connecticut Regional Water Authority for $2.4 billion. The new nonprofit Aquarion Water Authority will be controlled by nearly five dozen communities it serves.

PURA commissioners said a publicly owned utility will be more accountable to customers.

"The new authority will be governed by individuals from the communities it serves, not a board of directors whose main responsibility is providing a return to shareholders," said interim commissioner Holly Cheeseman. "The authority will be under public ownership, not a creature of private equity and no longer subject to sale when the winds of the market grow adverse."

Wednesday's approval is a seismic shift.

PURA unanimously rejected the sale in November over concerns that customers would be stuck with substantially higher bills. But in January, a judge ordered commissioners to reconsider their decision.

The takeover has led to lawsuits and bipartisan backlash.

"I'm furious and outraged and stunned," said Connecticut Attorney General William Tong, a Democrat. "We won't be done paying this off until I'm 92 years old. And rates are going to double in a hurry."

RWA projects up to 8.35% rate increases each year until 2040, according to filings with PURA. However, Eversource planned to raise rates – regardless of a sale – because PURA has not allowed an increase in a dozen years.

"Whatever form you were going to have around ownership, there were likely going to be rate increases," said Connecticut House Majority Leader Jason Rojas (D-East Hartford). "Just like the state, just like people at home, inflation is impacting the way they do their work."

Several Fairfield Co. towns are suing to stop the deal. Tong and the state Office of Consumer Counsel are also considering legal action.

"Aquarion customers will see immediate and sustained bill increases from the transaction, in addition to being saddled with paying off the debt service for decades to come," Consumer Counsel Claire Coleman said in a statement. "PURA had the tools to prevent this outcome and chose not to use them."

Some state lawmakers want to step in too.

A bill would give PURA the power to reject rate increases. Because the new Aquarion Water Authority is publicly owned, rates are not subject to state review. Instead, a board consisting of all 59 communities will set them.

"For nearly two years, since this issue arose out of nowhere, I have said that this deal stinks for utility customers across Connecticut," said state Sen. Ryan Fazio (R-Greenwich), a GOP candidate for governor. "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."

But leaders in the Connecticut House of Representatives appear cool to the idea of intervening.

"I don't really have a position on it, one way or another," House Speaker Matt Ritter (D-Hartford) told reporters on Wednesday. "But I can understand the argument from some that PURA may be a better regulator than local mayors and first selectmen and women. I get it."

House Republican leader Vin Candelora (R-North Branford) said that RWA is a better buyer than a private out-of-state investment group.

"If my constituents have an issue, we get a meeting with the Regional Water Authority," he said. "It's not owned by some company that they have to fly in from Spain in order to have a conversation."

In a joint statement, Eversource and RWA insisted that the deal will be good for customers.

"This approval allows the Aquarion Water Authority to move forward with the acquisition and transition to a locally governed, not-for-profit model focused on reliable service, accountability, and sustained investment in the system," said RWA Chief Financial Officer Rochelle Kowalski. "We look forward to working with communities across the region to ensure a smooth transition and deliver lasting value for customers. We will take the necessary steps to ensure that Aquarion customers see the benefits of this agreement as soon as possible."