A quarter-million customers get their water from Aquarion in Connecticut.

And for now, it will stay that way.

State regulators unanimously rejected a controversial multibillion takeover bid on Wednesday, amid concerns that customers would pay substantially higher bills.

The Public Utilities Regulatory Authority voted 4-0 to deny Eversource’s plan to sell Aquarion to South Central Regional Water Authority (RWA), a public utility that serves New Haven and more than a dozen surrounding communities.

PURA members said the takeover was bad for consumers.

“This was the result of an imperfect process,” said Holly Cheeseman, a longtime Republican lawmaker just appointed to PURA. “It’s an imperfect product and an imperfect governance structure.”

Cities and towns across western Connecticut lined up against the deal.

“PURA's decision to deny the sale of Aquarion Water Company is a huge win for the City of Bridgeport and for our neighboring cities and towns,” said Bridgeport Mayor Joe Ganim. “I hope this proves that there will be no rate increases due to the sale of Aquarion Water.”

State lawmakers from both parties opposed the takeover too – even though they approved the legislation letting RWA bid on Aquarion.

“The people’s voice has been heard,” said state Sen. Tony Hwang (R-Fairfield).

Customer bills could have risen up to 8.5% each year through 2035, according to the Regional Water Authority’s own projections. But PURA would have no authority to reject increases, because Aquarion would become a quasi-public utility.

“They no longer need to have PURA oversight and then their rate increases would not be subject to PURA jurisdiction,” Hwang said.

RWA leaders insisted that every town it serves has a say in setting rates. “It’s a very transparent process in which each application is scrutinized very closely by that policy board,” RWA president and CEO Larry Bingaman told News 12 Connnecticut in August 2024.

But critics believe customers would have ended up paying for Aquarion’s massive $2.4 billion price tag.

“They were going to load it up with $6 billion in debt,” said Connecticut Attorney General William Tong. “That would have raised rates maybe by double – 65% in some estimates. People were going to get crushed by this.”

RWA’s bid was $1.6 billion in cash and $800 million in debt assumption.

The blocked Aquarion deal has become a flashpoint in the 2026 race for governor.

“I understand exactly where PURA came down on this,” said Gov. Ned Lamont. “It was a big purchase price.”

The two Republicans who want the governor’s job accused him on remaining silent for months.

“The governor and Dem leadership forced legislation to allow it 16 months ago through [a] special session without public hearings,” GOP gubernatorial candidate Ryan Fazio, a state senator from Greenwich), posted on X. “It’s about time we had a governor and legislature who we can count on to defend utility customers rather than throwing up Hail Marys.”

The other Republican in the race, former New Britain mayor Erin Stewart, also slammed the Democratic governor.

“The fact that Gov. Lamont allowed this to move forward is a complete betrayal of Aquarion’s ratepayers,” she said. “Once again, it happened with no public hearing, no transparency, and no accountability. Another failure of leadership from the Lamont black box in Hartford.”

Eversource and RWA slammed the rejection, saying a out-of-state owner that answers to Wall Street investors could be worse for customers.

“We believe the conversion of Aquarion to a not-for-profit, public authority would have been in the best interest of customers, communities, and employees, providing local control and significant long-term benefits,” said RWA Chief Financial Officer Rochelle Kowalski.

Eversource would not say what its next step is – or which other buyers might be interested in purchasing Aquarion.

“The special act approved by legislators in 2024 indicated that the state was interested in an expanded nonprofit model,” said Eversource spokesperson Tricia Modifica. “However, once tested, that same special act proved difficult to overcome for PURA to move away from an investor-owned model.”

The utility’s shares dropped 12% on the news Wednesday.