CONNECTICUT WATER SETTLEMENT APPROVED BY REGULATORS

(The following is a reformatted version of a press release
issued by the Office of the Attorney General of Connecticut and
received via e-mail. The release was confirmed by the sender.) 
Regulators Approve Connecticut Water Settlement;
$10 Million Tax Refund Will Reduce Rates Charged to Customers 
SEPT. 3, 2013 
HARTFORD - Attorney General George Jepsen and Consumer Counsel
Elin Swanson Katz said rates charged to Connecticut Water Co.
customers will be reduced by an estimated 6.4 percent beginning
April 1, 2014, because state regulators have approved a
negotiated settlement with the utility. 
The decision by state Public Utilities Regulatory Authority late
Friday means that Connecticut Water customers will be credited
approximately $10 million in refunds the company expects from
the federal Internal Revenue Service (IRS) as a result of a
recent clarification of the repair tax deduction credit (RTDC). 
The Attorney General and Consumer Counsel negotiated the
settlement with the company. Under its terms, Connecticut Water
also agreed not to seek a general rate increase until 2015 at
the earliest and to delay until July 2014 a rate adjustment for
infrastructure and conservation improvements. 
“This settlement is a fair compromise that will lower bills for
Connecticut Water’s 90,000 customers and stabilize rates for the
near future,” said Attorney General Jepsen. The exact amount of
the reduction won’t be known until early next year. 
Consumer Counsel Katz said she and the Attorney General have
also asked PURA to investigate use of possible tax refunds from
the RTDC on other public utility companies, such as Aquarion
Water Company, Connecticut Light & Power Co. and United
Illuminating. 
“We could also see millions more in savings for other utility
customers, as we consider the implications of this new tax law
for each of our gas, water, and electric utilities,” said
Consumer Counsel Katz. “I look forward to discussions with the
rest of Connecticut’s utility companies on these issues.” 
In March 2012, the IRS issued Revenue Procedures 2012-2019 and
2012-2020, which allow businesses - including Connecticut’s
public service companies - to adopt an alternative method of
determining how capital expenditures can be treated for federal
tax purposes. The IRS now allows certain qualified capital
spending associated with the repair and maintenance of a utility
plant to be deducted as an expense, rather than capitalized for
tax purposes. The regulations further allow the companies to
“reach back” for all taxes paid for three years. Based on
Connecticut Water’s adoption for 2012, the company can reach
back to federal income taxes paid for the periods beginning
January 1, 2010. 
The $10 million to be credited to Connecticut Water customers
represents the federal income taxes paid by the company between
2010 and 2012. 
OCC Supervisor of Technical Analysis Richard Sobolewski, Staff
Attorney Victoria Hackett and Utilities Examiner Dave Thompson
are assisting the Consumer Counsel with this matter. Assistant
Attorneys General John Wright and Michael Wertheimer, with
Associate Attorney General Joseph Rubin, are assisting the
Attorney General. 
Contact:
Office of Consumer Counsel:
Richard Sobolewski
richard.sobolewski@ct.gov
860-827-2910 (office) 
Office of the Attorney General:
Susan E. Kinsman
Susan.Kinsman@ct.gov
860-808-5324 (office)
860-478-9581 (cell) 
Susan E. Kinsman, Esq.
Director of Communications
Office of the Attorney General
55 Elm Street, P.O. Box 120, Hartford, CT 06106 
Phone: 860.808.5324; cell: 860.478.9581
Fax:   860.808.5387
Email: Susan.Kinsman@ct.gov
Website: http://ct.gov/ag/ 
(sgp) NY 
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