Maine Water's parent files new application for merger approval in Connecticut
Courtesy / Connecticut Water Service Inc.
Connecticut Water Service Inc., headquartered in Clinton, Conn., and the owner of Maine Water Co., announced Wednesday that along with SJW Group it was resubmitting an application to state regulators in Connecticut to merge in a $1.1 billion deal. The new filing contains 72 stipulated commitments the companies hope will address Connecticut regulators' concerns about local control and other potential impacts if the merger goes through.
Connecticut Water Service Inc., parent company of Maine Water Co., filed a new application Wednesday with the Connecticut Public Utilities Regulatory Authority for approval of its merger with SJW Group.
In their joint filing related to the San Jose, Calif.-based SJW Group’s proposed $1.1 billion acquisition of Connecticut Water, the two companies offer what they describe as 72 binding commitments intended to ease Connecticut regulators’ concerns about local control and other potential impacts if the merger goes through.
The two companies withdrew on Jan. 9 their application to state regulators in Connecticut following a preliminary decision by the regulators in December to block SJW's acquisition bid — which was reaffirmed in early January when regulators declined to reopen their review and consider new information the two companies had hoped would change the regulators' minds.
Maine Public Utilities Commission, which also had been reviewing the proposed merger, halted its review in late December to await the final decision of regulators in Connecticut. On Jan. 23, Connecticut Water and SJW Group voluntarily withdrew their application before the Maine PUC, stating that they were doing so “without prejudice” and reserved the right to refile their petition in Maine if they decided to proceed with the merger.
Mainebiz’s sister publication, Hartford Business Journal, reported Wednesday that Connecticut regulators worried terms of the initial deal would leave Connecticut Water in "worse condition both financially and managerially." Connecticut regulators also detailed concerns about a lack of binding commitments to maintain a Connecticut headquarters and protect local jobs, and the potential inability for several water utilities Connecticut Water owns here to continue to exercise local control, HBJ reported.
In the joint news release with Connecticut Water, Eric Thornburg, chairman, president and CEO of SJW Group, stated that the two companies believe the new “comprehensive commitments” will deliver immediate, quantifiable and significant benefits to all of Connecticut Water’s stakeholders.
“As a leading water utility, the combined company will have the financial strength, scale, resources and sharing of best practices to ensure families and communities will continue to have safe and reliable water service across all of our operations and that we deliver the significant benefits of the transaction to our constituents in our local service areas in California, Connecticut, Maine and Texas,” he said. “We believe that the new application demonstrates how our combination with Connecticut Water is in the public interest. 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, with details of the 72 binding commitments, is publicly available on the SJW Group/Connecticut Water merger website online here.
Hartford Business Journal reported that among the commitments outlined in the new application are promises to preserve a Connecticut headquarters, not make any layoffs for three years, offer a bill credit to Connecticut customers (worth $2.3 million) and freeze Connecticut customer rates until at least 2021.
Next steps for Maine
Daniel J. Meaney, director public affairs and corporate communications for Connecticut Water, told Mainebiz in an email that Connecticut Water and SJW Group are working to resume the regulatory approval process in Maine within the second quarter.
The underlying merger terms are unchanged from the initial proposal, he said.
“We look forward to working with the Public Utilities Commission and the Office of Public Advocate to determine commitments that would be appropriate for customers and communities in Maine,” Meaney wrote. “ We expect that the filing in Maine will provide immediate and long-term customer benefits, protect jobs, support economic development, and serve the interests of our employees, customers and local communities and the environment. We also expect the new application will include governance provisions that will support continued local control and protect the financial integrity of Maine Water Co.”
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