State Senate Majority Leader Joseph L. Bruno said Tuesday that if it was up to him, he would fire the administrative law judge overseeing Iberdrola SA’s $4.5 billion acquisition of Energy East Corp.
Judge Rafael Epstein issued a decision in the case Monday, saying the deal shouldn’t be approved by the five-member Public Service Commission without certain conditions, including limiting where Iberdrola can build wind farms in the state.
Epstein also suggested the PSC require Iberdrola to set aside $646 million in benefits for New York consumers.
In remarks made Tuesday on Talk 1300 AM during New York Post political writer Fred Dicker’s daily radio show, Bruno said the judge’s decision, which is not binding, is bad for business in the state and bad for its renewable energy goals.
“That administrative judge – I don’t know who that person is – they have a right to their own opinion,” Bruno said. “But that person ought to be dismissed. That’s how I feel.”
Energy East, based in Maine, has 1.3 million customers in upstate New York through its New York State Electric & Gas and Rochester Gas & Electric subsidiaries.
Utility mergers in the state must be approved by the PSC, and the process that leads up to that vote is much like a trial, with testimony and exhibits filed on behalf of the companies and other interested groups, such as state agencies and consumer groups. Staff at the PSC, who advise the five commissioners on the PSC, also play a role in the proceedings.
The evidence is presented to an administrative law judge who makes his own recommendation to the commissioners on whether the merger is in the “public interest,” as required under law.
The PSC commissioners don’t have to follow the judge’s recommendation.
Bruno spokesman Scott Reif said Tuesday the senator stands by his comments and believes the Iberdrola merger would encourage alternative energy production that would reduce gas prices and home heating fuel costs in the state.
PSC spokesman Jim Denn noted that the administrative law judge is independent by design and his role is to offer his professional opinion on the case.
“Parties in the case and the public might not always agree with that opinion, but that’s what the process calls for – an independent review of the record,” he said.
Iberdrola said it is ready to walk away from the deal if it doesn’t get what it wants. The company is upset by conditions that would prohibit it from building wind farms in the NYSEG and RG&E service areas, and the more than $640 million in benefits that would have to be returned to consumers.
“Iberdrola will reconsider this transaction and seek other options in the United States if the final PSC ruling imposes unacceptable conditions on the transaction in these two key areas,” a company spokesman said.
By Larry Rulison
18 June 2008
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