Eversource Energy (NYSE: ES) said it is reviewing conditions attached to a proposed final decision from the Connecticut Public Utilities Regulatory Authority supporting the sale of Aquarion Water Company to the South Central Connecticut Regional Water Authority. The draft ruling, released March 6, represents a significant shift after regulators previously rejected the transaction and now moves the process toward a final decision expected on March 25. If approved, the roughly $2.4 billion transaction would transfer the largest investor-owned water utility in New England into a quasi-public nonprofit structure. The development has triggered sharp political criticism from Connecticut officials who warn the deal could significantly increase water bills for households.
Eversource Energy indicated that the Aquarion sale is not included in its 2026 financial guidance and that the company has already taken steps to ensure financial stability regardless of whether the transaction ultimately closes.
Why did Connecticut regulators reverse course on the Aquarion water utility sale?
The March 6 draft decision marks a notable reversal in one of the region’s most closely watched utility regulatory disputes.
Connecticut’s Public Utilities Regulatory Authority previously rejected the Aquarion transaction in November, concluding that the proposal did not sufficiently protect ratepayers. Aquarion subsequently appealed that decision, and a court remanded the matter back to the regulator for reconsideration.
The proposed final decision now indicates regulators may approve the sale with conditions.
Such reversals are unusual in the tightly structured world of utility regulation, where transactions often undergo extensive economic and legal scrutiny before approval. However, court remands can force regulators to revisit earlier conclusions if procedural issues or legal interpretations require further analysis.
The upcoming March 25 final ruling will determine whether the regulator formally authorizes the transaction.
Even if approved, additional regulatory steps remain before the deal can close.
What is the Aquarion Water Company sale and why does Eversource Energy want to exit the water business?
The Aquarion transaction dates back to January 2025, when Eversource Energy announced an agreement to sell the utility to a newly created entity known as the Aquarion Water Authority.
The proposed buyer is structured as a quasi-public corporation that would operate alongside the South Central Connecticut Regional Water Authority.
The deal carries an enterprise value of approximately $2.4 billion, including around $1.6 billion in cash proceeds and roughly $800 million in Aquarion debt that would be extinguished at closing.
For Eversource Energy, the sale reflects a broader strategic shift.
The company has increasingly focused its investment strategy on electric transmission, distribution infrastructure, and natural gas networks across New England. Utilities across the United States are entering a period of heavy capital spending as power grids modernize, electrification accelerates, and reliability investments expand.
Divesting a water utility business allows Eversource Energy to reduce parent-company debt while directing more capital toward core energy infrastructure.
Management has also emphasized that the company’s financial outlook does not depend on completing the transaction.
Eversource Energy’s guidance for 2026 projects earnings between $4.80 and $4.95 per share and assumes Aquarion remains part of the company. Long-term projections target cumulative annual earnings growth of between 5 percent and 7 percent through 2030 using 2025 results as the base year.
That positioning suggests the transaction is primarily strategic rather than financially essential.
Why are Connecticut officials warning the Aquarion deal could significantly increase water bills?
The draft regulatory decision has sparked strong criticism from Connecticut Attorney General William Tong and several local officials.
Opponents argue that transferring Aquarion to a nonprofit water authority could lead to substantial long-term rate increases for customers.
According to projections referenced by state officials, the Aquarion transaction application included assumptions of annual water rate increases ranging from approximately 6.5 percent to 8.35 percent through 2035. Over time, those increases could significantly raise household water bills across the state.
The debate centers on regulatory oversight.
Aquarion currently operates as an investor-owned utility regulated by the Connecticut Public Utilities Regulatory Authority. That structure allows regulators to scrutinize rate requests in detail and modify individual cost components before approving price adjustments.
Under the proposed transaction, Aquarion would transition to a nonprofit authority structure governed by a board representing municipalities served by the system.
Critics argue that such boards historically approve rate increases in full rather than negotiating detailed adjustments. They also note that consumer advocacy oversight could be weaker compared with traditional regulatory frameworks.
Supporters of the nonprofit model argue that regional water authorities have successfully managed large water systems for decades and can provide operational stability and long-term infrastructure planning.
The dispute therefore reflects a broader policy question about how water utilities should be governed.
How significant is Aquarion within the New England water infrastructure landscape?
Aquarion represents one of the most important water utilities in the northeastern United States.
Headquartered in Bridgeport, Connecticut, the company provides drinking water and wastewater services to approximately 250,000 customer accounts across Connecticut, Massachusetts, and New Hampshire. In total, the utility supplies water to more than 775,000 residents.
Aquarion’s network spans 72 municipalities and employs more than 360 workers responsible for system operations, infrastructure maintenance, and water quality management.
The company traces its history back to the Bridgeport Hydraulic Company, which began providing water service in the nineteenth century.
Since acquiring Aquarion in 2017, Eversource Energy expanded the utility through several acquisitions, including the purchase of the Torrington Water Company and municipal wastewater systems in Connecticut communities.
Those acquisitions added roughly 30,000 new customers and expanded the company’s regulated asset base.
Given the size of the customer base and infrastructure footprint, changes to Aquarion’s ownership structure inevitably carry broad implications for regional water policy.
What happens next for the Aquarion sale as regulators prepare their final decision?
The immediate milestone is the final ruling expected from the Connecticut Public Utilities Regulatory Authority on March 25.
If the regulator confirms approval, the transaction would still require several additional regulatory clearances before closing.
Those approvals include reviews from the Massachusetts Department of Public Utilities and the New Hampshire Public Utilities Commission. Federal antitrust clearance under the Hart-Scott-Rodino Act is also required.
Even with regulatory approval, the closing timeline could extend beyond March as the parties finalize conditions attached to the decision.
Eversource Energy has already taken steps to strengthen its financial position while the regulatory process unfolds. These include issuing junior subordinated notes, filing a rate case for Aquarion, and raising $600 million in parent-company debt.
Those measures suggest the company has prepared for both potential outcomes.
For Connecticut policymakers, however, the Aquarion decision could shape the future governance model for water utilities serving hundreds of thousands of residents.
Key takeaways: What the Aquarion regulatory decision means for Eversource Energy and Connecticut utilities
- Connecticut regulators issued a proposed decision on March 6 supporting the sale of Aquarion Water Company by Eversource Energy.
- The draft ruling reverses an earlier rejection and moves the process toward a final decision expected on March 25.
- The transaction values Aquarion at roughly $2.4 billion and would shift the utility into a nonprofit quasi-public structure.
- Eversource Energy aims to use proceeds to reduce debt and reinvest capital in its electric and natural gas infrastructure businesses.
- The company’s 2026 earnings guidance assumes Aquarion remains part of its portfolio, indicating the sale is not financially essential.
- Connecticut Attorney General William Tong and other officials oppose the deal, warning it could significantly raise water bills.
- Rate projections cited in the transaction application suggest annual increases of roughly 6.5 percent to 8.35 percent through 2035.
- Aquarion serves more than 775,000 residents across three New England states, making it the largest investor-owned water utility in the region.
- Additional approvals from Massachusetts and New Hampshire regulators remain necessary even if Connecticut grants final approval.
- The case highlights broader policy tensions around whether nonprofit water authorities or investor-owned utilities offer stronger oversight for essential infrastructure.
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