Charles V. Firlotte – December 5, 2013

Charles V. Firlotte, President and CEO of Bridgeport-headquartered Aquarion Water Company (“Aquarion”), the largest investor-owned water utility in New England, spoke on the challenges and issues of providing water to more than 625,000 people in 47 cities and towns in Fairfield, New Haven, Litchfield, Middlesex and New London counties.

Mr. Firlotte provided a brief history of the company, founded in 1857 as the Bridgeport Hydraulic Company, with P.T. Barnum as its second President. It grew through acquisition of smaller companies in the state, changed its name to Aquarion Water Company in 1991 and was acquired by the United Kingdom’s Kelda Group plc. in 2000. Mr. Firlotte spent several years working in the U.K. after the acquisition. Australia’s Macquarie Bank acquired the company in 2006.

Mr. Firlotte said that after he was appointed President and CEO of Aquarion in 2003, he spent some time accompanying work teams getting a feel for the customer end of the business.  A challenge at the time was the number and breadth of customer complaints.  In 2004, Aquarion downsized and introduced technology upgrades that included the customer end of the business to improve service delivery.  He tried to replace a top down hierarchical structure with one that worked from the bottom up to meet customer needs. Field teams were equipped with the technology to report back immediately as problems arose. The company initiated a weekly complaint review to determine how to improve service delivery and response times. As a result, the number of complaints and response times both shrank significantly, so that Aquarion is now ranked among the highest in customer satisfaction among the state’s utilities.

Mr. Firlotte emphasized that the company takes its role as stewards of the environment seriously, instituting various programs to protect and nurture the animals and plants on their properties, sponsoring an environmental champion awards program and carrying out an extensive clean-up and reforestation program after the devastation Super Storm Sandy. According to Mr. Firlotte, Aquarion also believes in building customer value, offering a variety of discounts and sponsoring the otter exhibit at the Beardsley Zoo in Bridgeport.

In the Q and A, Mr. Firlotte made the following comments:

Aquarion is highly regulated, including the rates it can charge, the return on assets it can retain (having to return any excess), its care of the environment, water quality and the safety of its dams. It is a relatively small operation that generates a couple of hundred million dollars a year in revenue.

Aquarion is part of the on-going dialogue in the state as to stream-flow standards to protect the viability of the state’s streams. It looks like the issue of the deleterious effect of UConn’s heavy use of water on a local stream is being dealt with.

The United States has over 53,000 water systems, compared to ten or so in the U.K. Consolidation in the industry is ongoing. Aquarion acquired 50 systems, some quite small, in the past two years. Water is an infrastructure business, comprising dams, pipes and pumping stations, and companies need to constantly invest and improve. Scale helps.

At least some of the debris still on forest floors from Sandy is necessary in order to nurture the ecosystem.

Most of Aquarion’s water comes from reservoirs wisely constructed over the past hundred years. Less than 10% comes from wells. The area around Westport and Weston is in good shape in terms of supply. The Greenwich area is more problematic, and there is a pipeline that transfers water from here to there.

Aquarion does little to manage storm runoff for flood control.

The company has over 40 miles of trails that it maintains for the public. It does not allow kayaking on reservoirs such as Saugatuck Reservoir in order to protect water quality.

Fracking is not a problem in Connecticut. Mr. Firlotte believes that the possible deleterious effects of prescription drugs flushed into the water system are best dealt with through education to prevent improper disposal of unwanted prescription drugs.  The company monitors for over 100 contaminants, performing more than 100,000 water quality tests a year. Required annual water quality reports for Aquarion have been positive.

The company’s dams are inspected annually and are structurally sound.  However, if global warming leads to massive super storms of greater frequency, then “all bets are off.” Global warming is a puzzle.