Iberdrola SA’s new $2 billion plan to invest in wind power in New York state has drawn the interest of Gov. David Paterson.
On Wednesday, Paterson issued his first statement about the Spanish utility’s bid to buy Energy East Corp., the parent company of Rochester Gas and Electric Corp. and New York State Electric and Gas.
Paterson didn’t offer an outright endorsement of the takeover by Iberdrola, but he effusively praised the company’s commitment, announced Tuesday, to invest in renewable energy if the deal is approved.
“This would be an unprecedented level of investment in clean energy development by a single company in New York,” the governor said.
“The announcement demonstrates great commitment to growing the state’s renewable energy industry quickly, something that has been a top personal priority of mine for some time.”
The proposed takeover, valued at $4.5 billion, is pending before the state Public Service Commission. Political and business allies of Iberdrola have complained about demands that the PSC staff has placed on the company and about the length of time the review is taking, noting that the federal government and several other states have approved the deal.
In his statement, Paterson said he looks forward to the PSC’s “speedy resolution of issues in the acquisition case before it. I am hopeful that the outcome will be one that provides an opportunity to Iberdrola to bring its financial strength and commitment to expand renewable energy generation in the state, while also protecting the interests of ratepayers in the Energy East service area.”
Protecting ratepayers might be one of the sticking points, as far as the PSC staff is concerned. The staff has said Iberdrola should provide $644 million in rate cuts and other benefits, more than three times what the company has offered.
The next step in the review process is a recommendation by PSC Administrative Law Judge Rafael Epstein. The five-member commission, which is independent of the governor and Legislature, will then decide on the takeover, probably sometime this summer.
In addition to rate relief, an issue of concern to the PSC staff has been the generation of electricity by existing and proposed wind farms Iberdrola owns. State policy frowns on a company both generating and distributing electricity. Iberdrola has pointed out that the state has set renewable energy goals, and wind farms would help meet those goals.
On Tuesday, the PSC said it was “pleased and encouraged” with the Iberdrola investment plan, according to spokesman James Denn.
5 June 2008
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