Call it a monopoly or a corporate noose, but many feel that this deal isn’t exactly a good thing. Eversource Energy will officially take over Aquarion Water. Considering the energy utility is under investigation for artificially increasing prices, residents say they don’t feel optimistic about this merger.
Two words: Delivery charges.
Stamford Advocate reports that Connecticut regulators approved of the $880 million deal. It went through over the weekend.
The state’s biggest electric utility now owns the state’s largest water utility? What could possibly go wrong?
Apparently, the water utility sustained a fair amount of debt before the buyout. To the tune of $795 million. Eversource already agreed to absorb it, however.
So, for those 625,000 residents this company serves, they fear pricier bills in the future. I mean, you can live without electricity, but you can’t live without water.
But, Eversource counters the claim, saying they’ll allow the water utility to borrow at better interest rates. So, their rationale is that it will ultimately benefit their customers.
Eversource also claims this merger is a great thing because a local company now owns the utility. Well, that’s according to Lee Olivier, the executive vice president:
“I think local ownership really means a lot. If you look at the rationale for the sale of the company, it was strictly related to a fund that Macquarie had that … needed to be dissolved, and that could have gone in a lot of different directions. So having local ownership where we expect to keep the existing operations pretty much in place — as I said, we’re not in the water business. They have a great track record for operations.”
Company spokesman Mitch Gross also added current electricity customers will see their overall bills rise by about 6.8 percent. That increase will raise an extra $337 million. Basically, the utility agreed to a 4 year freeze after taking over Massachusetts-based NStar. So… time’s up.
That money, however, will reportedly help the company make improvements to the electricity grid. Basically, building stronger poles and wires that can withstand severe weather.
Then again, a good portion of their customers lost power last night due to that wicked storm. About 20 to 30 percent of their consumers woke up to a total blackout.
As of 10:00, there’s a total of 139,148 outages across the state. You can click HERE to see the outage map.
So, many customers worry about their future utility bills. Does this mean we’ll have to pay more for our water? Considering Connecticut already has the highest cost of living in the country, many worry if it’ll worsen.
Well, ask yourself this: is it more likely things will improve? Residents complain they pay more out of pocket every year. So, the question is: just how much more money will we pay next year? Will the hikes be big or small?
Also, there’s speculation over how Eversource would rationalize any future hikes. As of now, structural improvements seem to be their most common reason.
Then again, with the rise of crazy storms…
But, the biggest issue of all is the dreaded “m” word: monopoly. Is it fair for one company to control the majority of Connecticut’s utilities? Many feel that oversteps several boundaries.
The dictionary defines a monopoly as “the exclusive possession or control of the supply or trade in a commodity or service.” Other definitions include that a monopoly hampers future competitors.
So, does this meet the federal requirements? Well, it’s hard to tell. Then again, I didn’t study law so I can’t make the call.
Many feel this merger potentially conflicts with the state’s antitrust law. Which, surprisingly, also contains grounds for people to complain about their jacked up delivery charges.
Just saying. Those are pretty out of control as of late. Check your gas and electric bills if you don’t believe me.
The issue here is, will the companies address these fears? Will our elected officials fight against future rate hikes? More importantly, will the PURA scrutinize this deal if enough people complain? We’ll see.
So, how do you feel about this? Is it for the best or for the worst? Also, how will this affect Connecticut’s cost of living?
Do you think residents can handle paying more for their utilities? Or, will this further the state’s exodus problem?
Or, am I being too hard on this merger? Perhaps so, and I will give it a chance. But I only have so much cash per month to put aside for my bills, so consider me nervous. I know I’m not the only one who struggles to make ends meet.
So, if this merger reduces my water bill, excellent. But, it the opposite happens…? I am sure our lawmakers will have a lot of explaining to do.