Why Is Energy Giant Eversource Wading Into The Water Business?
This map shows Eversource’s combined service area with Aquarion. The energy company now wants to buy Connecticut Water, in a move it says would complement its Aquarion merger. Photo Credit Eversource/Business Wire
Eversource is currently trying to buy its second water company in the past year.
The region’s biggest electric utility hopes to provide water service to hundreds of thousands of customers across four New England states.
It would still be a small swath of the overall water system – but that could change.
But why do electric want to get into the water business?
To understand how Eversource was able to get into the water sector in the first place, you need to understand some recent electric industry history.
In 2015, publicly regulated electric utilities were being deregulated. It meant Eversource couldn’t own power plants as well as the poles and wires that bring that power to customers.
So Eversource agreed to auction off its power plants – but it lost money on the deal.
Now, customers are paying them back for those losses in the “stranded cost recovery charge” on their electric bills – anywhere from a few cents to several dollars a month.
New Hampshire’s utility ratepayer advocate Don Kreis says, long-term, those charges will work out to about $600 million dollars for Eversource to spend.
“And so naturally the company is looking to make new capital investments,” he says, “and I gather that investing in water companies is one of them.”