WATERBURY — Connecticut Water and San Jose Water Group have withdrawn their merger request before the Public Utilities Regulatory Authority.
The two water utilities, which have sought to merge since last March, said in a statement Jan. 9 they might submit a new merger application in the near future.
“The companies are confident that their combination is in the public interest and that they have the technical, financial and managerial suitability to create important benefits, including rate reductions, and unique service and job protections, for Connecticut customers and communities and the employees who serve them,” said the statement.
PURA issued a preliminary rejection of the merger Dec. 4, citing concerns that the merger was not in the best interest of local ratepayers. After initially granting a weeklong extension for CT Water and SJW to gather additional evidence in favor of the merger on Dec. 5, PURA this month refused to consider material the companies submitted. A statement issued by the authority on Jan. 4 criticized the companies for offering concessions rather than presenting new evidence that addressed its concerns and showed the merger would be in the public’s interest.
“The authority has expended extensive resources reviewing three iterations of this merger application. The authority expects parties submitting merger applications to have finalized all material details of the transaction before submission of an application,” the statement read. “Applicants should not consider their application to be an initial offer to the authority, only to be improved after being rejected in the proposed final decision.”
In their statement, CT Water and SJW Group said they will review past utility applications that “were able to overcome PURA concerns and obtain the necessary regulatory approval.”
One such application was for the merger of United Illuminating (UIL Holdings) and Spanish energy company Iberdrola in 2015. In July of that year, PURA rejected the deal in a preliminary decision, saying the benefits for the public were not “tangible and sizable.” However, PURA did approve the merger in December after Iberdrola committed to keeping UI’s headquarters in Connecticut indefinitely, according to RTO Insider, a watchdog of electric markets.
Connecticut Water has 300,000 customers throughout the state, including in Beacon Falls, Middlebury, Naugatuck, Plymouth, Prospect, Thomaston and Waterbury.
The merger agreement between the CT Water and SJW Group remains in effect, according to the statement.