WATERBURY — Connecticut Water and San Jose Water Group on April 3 submitted a new merger application to the Connecticut Public Utilities Regulatory Authority.
The companies say the new application is responsive to the concerns PURA cited in its preliminary denial of the merger application submitted last year. The merger as it relates to shareholders is the same $70-per-share buyout of CT Water’s shareholders that was approved by shareholders last November.
“We believe that the new application demonstrates how our combination with Connecticut Water is in the public interest,” Eric Thornburg, chairman, president and CEO of SJW Group, said in a prepared statement. “The comprehensive commitments in our application will maintain the very best of Connecticut Water while also enhancing local service and delivering customer benefits as part of the SJW Group with increased access to expertise and resources.”
The new application includes 72 binding commitments, including a one-year bill credit for customers including municipalities, and freezes base rates for customers in the state until 2021. Nor will the utilities charge higher rates to recover the costs of the merger or the rate freeze.
Other commitments include maintaining current staffing levels of 221 employees at CT Water and its subsidiaries for three years and creating 67 jobs through 2021 through capital investments.
Local leadership will remain in place at Connecticut Water and the utility will also increase its charitable giving to $120,000 a year for the next five years, doubling its annual average over the past three.
“The new application we have submitted to PURA – with its extensive and binding commitments – ensures that Connecticut Water’s combination with SJW Group will provide immediate and long-term customer benefits, protect jobs, support economic development, advance important environmental goals and serve the interests of our employees, customers and local communities in Connecticut,” said David Benoit, president and chief executive officer of Connecticut Water. “In addition, the new application has governance provisions that will support continued local control and protect the financial integrity of the Connecticut utilities.”
San Jose Water Group is the California-based parent company of San Jose Water Company, SJW Land Company and Texas-based water utility SJWTX. The California Public Utilities Commission opened an investigation into San Jose Water Company last year for allegedly overbilling customers since 1987 and double-billing for service charges since 2011 which together cost customers an extra $9 million.
Connecticut Water Service provides services to 300,000 customers in 56 Connecticut towns and cities, including 13 communities in Litchfield County and five communities in Greater Waterbury, including parts of Naugatuck.
The two water utilities attempted to merge last year before retracting their merger application before PURA after the regulatory body issued a preliminary denial. Last year’s merger attempt was hotly contested by Eversource Energy, which also sought to acquire CT Water and accused executives there of favoring an inferior merger-of-equals offer from SJW to preserve their own jobs. PURA said in its preliminary decision the terms of the merger did not demonstrate the merger was in the public interest.
For the full list of commitments and a full copy of the application, visit www.sjw-ctws.com.
