Vote delayed on Iberdrola deal
The state Public Service Commission put Iberdrola SA’s $4.5 billion acquisition of Energy East Corp. on hold for a week Wednesday after two of its five members could not attend a special hearing to vote on the plan.
The vote might have taken place had one of the commissioners, Robert Curry Jr., not fallen ill with what was described as a stomach bug.
The other commissioner to miss the meeting, Cheryl Buley, has decided to resign from the PSC for personal reasons. Her departure from the $109,800-a-year job will take effect next Wednesday, but it’s unclear at this point if she will attend that day’s meeting and cast a vote.
News that a vote would not occur was met with surprise by the dozens of attorneys, lobbyists and journalists who attended Wednesday’s meeting. Iberdrola, the world’s largest wind farm developer, first brought the proposed merger to the PSC a year ago for approval. The Spanish utility had hoped the deal would be completed by June.
A local Iberdrola spokesman who attended the meeting said it was unlikely the company would comment on the delay.
Buley, who was appointed to the PSC two years ago, said her resignation had nothing to do with the Iberdrola case: She’s leaving the PSC to move to Kentucky and marry.
She called it a happy time and said it was just a matter of putting her personal life before her professional life. “I’ll really miss the intellectual challenge there (at the PSC),” she said.
Buley said she expected a statement about her departure to be read before Wednesday’s hearing.
In the statement, she talks about broad energy and free-market policies in the state and thanks the PSC staff and her fellow commissioners. The statement did not address the Iberdrola case specifically.
At last week’s PSC meeting, Buley was critical of Iberdrola’s promises of investing $2 billion in wind generation in the state, noting that developers get huge federal and state subsidies to build wind farms. Iberdrola has said the investment is one of the reasons the deal would benefit consumers and should be approved.
“It really is not as captivating as it might appear,” Buley said at the Aug. 20 meeting. “It’s the ratepayers who are subsidizing it.”
The commissioners are now expected to vote on the acquisition at a hearing scheduled Sept. 3 in Albany.
Several substantial issues were raised at Wednesday’s meeting, including whether Iberdrola is being looked at as part of Attorney General Andrew Cuomo’s investigation into allegations of anti-competitive practices by wind power companies in New York.
Two companies, First Wind of Newton, Mass., and Noble Environmental Power of Essex, Conn., have been served with subpoenas.
However, PSC commissioner Patricia Acampora asked senior PSC staff Wednesday if they knew whether Iberdrola also was being investigated, since company subsidiaries have stakes in many different wind companies and projects.
She was told by a PSC attorney that Cuomo’s investigation is confidential and neither the commissioners nor their attorneys could be supplied with that information.
“That, really, I think, is ridiculous — for the record,” Acampora said.
Commissioner Maureen Harris also expressed concern about Iberdrola’s ability to manipulate wholesale electric prices in the state if it is allowed to own transmission and distribution lines as well as generation facilities. State policies prohibit ownership of both, although exceptions can be made.
Senior PSC staff have told the commissioners they do not believe major problems with the merger and price manipulation exist, although they have suggested a number of conditions to place on the deal to mitigate potential risks of what is known as vertical market power.
“It’s still a very big concern for me,” Harris said.
By Larry Rulison
Business writer
28 August 2008
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