PSC to vote on Iberdrola’s proposed Energy East acquisition Sept. 3
The state Public Service Commission is scheduled to vote Sept. 3 on a proposal from Spanish utility Iberdrola’s to buy Energy East Corp.
A vote scheduled for Aug. 27 was postponed as a result of two of the five PSC commissioners were absent—Robert Curry, who was sick, and Cheryl Buley. Buley has since announced her resignation from the PSC. Buley is getting married and moving out of the state.
The commission vote will cap a review and negotiation process lasting more than a year.
“It’s not an insubstantial proceeding, so they opted to wait for their fellow commissioners,” said commission spokesman James Denn.
Buley’s absence from the board leaves the commission with four voters who will decide whether to accept Iberdrola’s proposed takeover of Energy East (NYSE: EAS), worth $4.5 billion. An Energy East subsidiary, New York State Electric & Gas, has 63,000 customers in the Albany, N.Y., area.
By default, Iberdrola’s proposal will be rejected if commissioners split 2-2 on the issue, Denn said.
Iberdrola says it will invest at least $2 billion in wind-power generation in the state if it is permitted to acquire Energy East. Iberdrola has also agreed to several hundred million dollars in up-front benefits to consumers, including through reduced rates.
Organizations have come out on both sides of the deal. The New York Consumer Protection Board and state Department of Environmental Conservation support the acquisition.
But Independent Power Producers of New York Inc., whose members generate 75 percent of the state’s electricity, oppose it. IPPNY argues that Iberdrola, which is the second-largest wind energy operator in the U.S., should not be able to produce and provide power.
The state prohibits “vertical market power,” or the ability for power providers to also operate as power generators.
The bid is supported by key members of the state Legislature, as well as U.S. Senator Charles Schumer, D-NY, and Gov. David Paterson.
29 August 2008
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