Massachusetts' attorney general has recommended state regulators reject Eversource Energy's proposed $1.68 billion acquisition of New England's largest private water utility.
In an Oct. 13 filing, Massachusetts Attorney General Maura Healey urged the state Department of Public Utilities, or DPU, to reject the proposed acquisition of Macquarie Utilities Inc. and its subsidiaries, including Aquarion Water, because petitioners "failed to meet their burden to show that the sale would provide net benefits to Aquarion's ratepayers."
Eversource announced June 2 the proposed purchase of the water companies from a partnership led by Macquarie Infrastructure Partners International, which owns Macquarie Utilities Inc.'s majority stakeholder, Macquarie Utilities Holdings. The $1.68 billion deal would comprise of $880 million in cash and $795 million of assumed debt from Aquarion.
Aquarion Water serves about 230,000 customers through subsidiaries Aquarion Water of Connecticut, Aquarion Water of Massachusetts and Aquarion Water of New Hampshire, which operate in the same states as Eversource does.
Eversource filed on June 29 for approval with the DPU for a change of control of Macquarie Utilities Inc., which serves as the ultimate holding company of Aquarion Water of Massachusetts.
Reply briefs in the case are to be filed on Oct. 20. Petitioners wish the DPU to issue a decision on the deal by Nov. 1, but the agency has no specific deadline. Depending upon regulatory approvals, the involved companies expect to close on the merger by Dec. 31.
As required by Massachusetts law, Eversource and Macquarie Utilities Inc. must meet a net benefit standard by identifying administrative efficiencies and benefits arising from Aquarion Water of Massachusetts' pending $2.3 million rate hike that was requested on April 13. At the request of Aquarion Water, a decision on the rate case has been held in abeyance until Nov. 1 with a postponed implementation date of July 1, 2018.
In an Oct. 13 brief, Eversource and Macquarie asserted that the merger is in the public's interest, consistent with state law and would result in net benefits for customers. For instance, the petitioning companies previously said in an Oct. 4 filing, which listed off potential benefits, that the acquisition would enable Aquarion to coordinate with other Eversource utilities to finish large capital projects in a more cost-effective manner. (Massachusetts DPU case 17-115)
The proposed sale is also subject to review by other state regulators, including Maine Public Utilities Commission, which approved the transaction Aug. 7 as Eversource subsidiary Public Service Co. of New Hampshire operates as a public utility within the state. The Connecticut Public Utilities Regulatory Authority is expected to issue a draft order on Oct. 16, followed by a final decision on Oct. 27. The New Hampshire Public Utilities Commission, meanwhile, concluded on Oct. 13 that its approval was not needed for the sale.