Windmills are a hurdle in Spanish utility’s bid to buy NYSEG 

New York State Electric and Gas, which provides electricity to customers in several towns in the northeastern Adirondacks, may soon be owned by a Spanish power company if a deal can be reached with the state Public Service Commission.

NYSEG, which is based in Binghamton and provides electricity and gas to Jay, Wilmington and AuSable Forks as well as much of Clinton County, is a subsidiary of Energy East, a Portland, Maine-based company. Iberdrola, a Madrid, Spain-based utility provider, agreed to purchase Energy East last June for $8.4 billion. Federal regulators have approved the merger, as have regulators in New Hampshire, Maine, Massachusetts and Connecticut, the other four states where Energy East operates, but the PSC is withholding approval until Iberdrola divests itself of all wind holdings in the state and agrees not to invest in any more.

“The PSC says it would prevent other wind developers from moving forward with projects, and also that it wouldn’t allow other wind developers to connect to their lines,” U.S. Sen. Charles Schumer, D-N.Y., said last week. “This is absolutely absurd. The PSC has not offered a shred of evidence to support this claim.”

Iberdrola’s case will be going before the PSC this summer. PSC spokesman James Denn told the Rochester Democrat and Chronicle last week that negotiations between the company and the commission are continuing and that PSC is trying to ensure no one company can monopolize the wind energy market in the state.

“If a company can control both the generation and the distribution of electricity, they have an opportunity to exert a greater influence on the market than you might want them to,” Denn said.

Schumer said existing regulatory safeguards should be adequate to ensure Iberdrola doesn’t break the law.

“If the PSC is so inept at finding illegal actions by utilities, they ought to fold up shop themselves,” Schumer said.

The PSC has also said Iberdrola should create a $664 million trust fund to cover unforeseen increases in utility prices so consumers’ rates don’t go up. The company has agreed to a $200 million trust fund so far.

“I don’t think it’s high enough, but it’s a good start,” Schumer said.

Iberdrola is one of the leading producers of wind power in Europe. It already holds a 50 percent stake in the Maple Ridge Wind Farm in Lewis County, and it owns the Roaring Brook Wind Farm in Lewis County and the Horse Creek Wind Farm in Jefferson County. It has several wind farms in Pennsylvania, and it has signed deals to develop wind power in Massachusetts and Connecticut.

“Particularly with fossil fuel prices going up, wind power offers real environmental and economic benefits,” Schumer said. “The PSC is standing on its head. It’s upside down; it’s inside out. They should be encouraging Iberdrola to use wind power.”

Schumer said the Maple Ridge Wind Farm, which opened in 2007, pays $8 million per year in property taxes, pays $1.56 million to local property owners and has created 159 new jobs. Schumer said New York greatly underutilizes wind power, currently using only 411 megawatts of the grid’s 7,000 megawatt capacity.

By Nathan Brown
Enterprise Staff Writer

Adirondack Daily Enterprise

5 May 2008