Mystic — The Aquarion Water Co. has announced that it has received a federal tax refund that will allow it to reduce rates for customers by 5.6 percent for the next three years.

The company estimates the total reduction for customers at $29 million.

It explained that IRS tax regulations issued last September resulted in the refund.

The regulations allow Aquarion "to adopt an alternative to how capital expenditures are treated for income tax purposes."

The refund will begin on Jan. 15, 2015, if it is approved by the Connecticut Public Utilities Regulatory Authority.

"We are committed to providing our customers with the highest quality water and outstanding service," said Charles V. Firlotte, Aquarion President and CEO, in a statement. "We are grateful that these regulations will allow us to continue to reliably provide safe, high quality water, at an even more economical rate. I am also appreciative of the assistance and support of the Connecticut Office of Consumer Counsel and the office of the Connecticut Attorney General in making this happen."

The company also announced that it is delaying its next request for a rate increase.

Firlotte added "that customers will receive an on-going benefit by not only seeing a reduction to their bill, but also stability in their water rates."

Aquarion serves more than 625,000 people in 47 cities and towns throughout Connecticut, including Stonington and Mystic.