The staff of the state Public Service Commission has again advised its five-member board to disapprove the $4.5 billion sale of Energy East Corp. to Iberdrola SA, but staffers have added a big “however” on wind farms.
In a brief filed in the long-running case, the PSC staff has offered alternatives if the five public service commissioners approve the sale, according to James Denn, PSC spokesman.
Iberdrola, the European utility giant and global leader in wind turbine farms, would be allowed to own and operate wind farms within Energy East territory, but with public benefits attached to the agreement.
The staff recommended that Iberdrola’s $2 billion proposal to invest in New York be tied to possible ratepayer rebates. The PSC staff said that to ensure the promise to build more wind farms in New York, the state could set aside $200 million of Iberdrola cash to be returned to ratepayers if the investment never happens.
The alternative proposal, known as Exception 6 in the PSC reply brief, comes after months of criticism and speculation regarding PSC’s opposition to letting Iberdrola buy Energy East.
Energy East owns Rochester Gas and Electric and New York State Electric & Gas. Iberdrola’s plans to keep and build wind farms in the service area have brought controversy but also support from public officials and environmentalists.
The PSC has disallowed distributors of electricity from owning sources of electricity.
In a June 16 ruling by Administrative Law Judge Rafael Epstein, the five-member board of the PSC was encouraged to disapprove the deal, a decision which backed up PSC staff but brought howls from such leaders as Sen. Charles Schumer, D-N.Y.
“Done correctly, this merger can reduce costs and make New York a leader in providing clean, cheap wind power,” Schumer said. “The acquisition can reduce rates for customers and help to create jobs and billions of dollars of investment in upstate New York. I am glad the PSC staff has recognized this win-win-win, and hope the PSC Commissioners will quickly follow suit.”
Energy East made the offer in May 2007.
Iberdrola officials said the Madrid-based company would walk away from the bid if New York enforced the rule.
The sale of Energy East has already been approved by the federal government and every other state Energy East operates in.
By Jim Stinson
My-Ly Nguyen contributed to this report.
Gannett News Service
2 July 2008
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