January 2, 2019

PUC delays review of merger involving Maine Water Co.’s parent

Courtesy / Connecticut Water Co.
Courtesy / Connecticut Water Co.
Connecticut Water Service Inc. (NASDAQ: CTWS), parent company of Maine Water Co., and its merger with California-based SJW Group faces a key decision by the Connecticut Public Utilities Regulatory Authority, which had earlier issued a preliminary rejection of the deal.

Maine Water Co.'s parent

Connecticut Water is the parent of the Connecticut Water Co., the Maine Water Co., the Avon Water Co. and the Heritage Village Water Co. The subsidiaries provide water service to more than 450,000 people in Connecticut and Maine, and wastewater serve to 10,000-plus people in Connecticut. It became the largest investor-owned water utility in Maine in 2012 with its $53.5 million purchase of Aqua Maine and $19.8 million purchase of the Biddeford & Saco Water Co., which are both now under the name of Maine Water Co. Maine Water Co. serves more than 32,000 customers, or approximately 85,000 people, in 21 communities across Maine.

Maine Public Utilities Commission has halted its review of SJW Group's proposed $1.1 billion merger with the parent company of Maine Water Co., pending a key regulatory decision in Connecticut over whether the purchase of Connecticut Water Service will be allowed to proceed.

In a procedural order issued Dec. 20, PUC accepted Maine Water's request that the Maine proceedings be delayed until after the Connecticut Public Utilities Regulatory Authority makes its final decision on SJW's acquisition of Connecticut Water. Until then, Maine Water plans to file weekly status reports with the PUC on the Connecticut proceedings.

As reported by Mainebiz's sister publication Hartford Business Journal, Connecticut's Public Utilities Regulatory Authority issued a preliminary decision in early December to block the deal, citing concerns it would not have enough public benefit and would leave Connecticut Water in "worse condition both financially and managerially."

HBJ reported that the Connecticut authority is continue to review the deal, after the two companies responded with changes that included offering a rate freeze for Connecticut ratepayers and local employment pledges.

Connecticut regulators are now weighing whether the new information and pledges made by the two companies will be admitted into the record for review and consideration.

The decision, though procedural, is seen as a key step for the acquisition to proceed, HBJ reported.

"The reopened record, with some new evidence and additional process, will provide the necessary basis for a PURA decision without requiring a wholly new application," the Office of Consumer Counsel wrote in a recent filing that urged PURA to reopen the record.

Meanwhile, spurned bidder Eversource, whose competing unsolicited purchase offer was rejected last summer by Connecticut Water's board, remains involved in Connecticut's regulatory review process.

In a Dec. 17 filing with the Connecticut Public Utilities Regulatory Authority, Eversource and its recently acquired subsidiary Aquarion Water said the offered concessions by SJW Group and Connecticut Water failed to remedy "the underlying, fatal defects of the transaction," HBJ reported.

Eversource urged Connecticut regulators not to reopen the record in their evaluation of the SJW-Connecticut Water deal.

Read more

Maine Water’s parent, SJW Group withdraw merger application in Conn.


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