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Connecticut changes course, will review utilities merger
Credit: By Jerry Kronenberg, www.bostonherald.com 4 January 2012 ~~
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Translate: FROM English | TO English
Connecticut regulators are throwing a potential new short-circuit into Boston-based NStar [NST]’s proposed $4.7 billion merger with Connecticut’s Northeast Utilities.
The Connecticut Public Utilities Regulatory Authority – which had previously ruled that it didn’t have jurisdiction over the deal – reversed itself today and tentatively decided the merger needs the agency’s approval after all.
The decision means the deal, which Massachusetts regulators have already been scrutinizing for a year, will face a separate review by Connecticut officials.
However, NStar and Northeast Utilities previously said the merger might fall apart unless the deal closes by April 16.
NStar has also threatened to raise consumers’ rates if it has to nix the deal, which the firm claims would generate some $800 million in cost savings.
The merger has faced increased scrutiny after NStar and Northeast Utilities allegedly did a poor job restoring power after October’s freak snowstorm.
PURA spokesman Dennis Schain said today’s decision partly stemmed from the firms’ October performance.
However, critics claim Massachusetts regulators are holding up the deal to force NStar to buy electricity from the proposed Cape Wind offshore wind-turbine farm.
Rival utility National Grid has signed a deal to buy half of the wind farm’s output. But NStar has balked at a similar arrangement, saying Cape Wind wants too much money.
NStar referred calls about today’s decision to Northeast Utilities, which said it’s deciding what to do next.
Spokesman Al Lara said the firms can appeal before today’s tentative decision becomes final in two weeks, or could just submit to the review process and hope for approval.
“We have a number of options available,” he said.
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