Massachusetts utility regulators yesterday said a proposed merger between Boston utility NStar and the Connecticut-based Northeast Utilities, will be held to a stricter standard that will probably put more pressure on the companies to increase the use of non-polluting energy sources such as wind and solar power.
In an order released by the state Department of Public Utilities, regulators said they will require the merger to have a “net benefit’’ to the public to gain approval, as opposed the previous standard, which required only that the combination cause “no net harm.’’ The higher standard will apply to all future mergers.
Regulators began considering a new standard after a request, filed in January, by the Massachusetts Department of Energy Resources.
Energy resources officials said they believe NStar’s merger with Northeast Utilities should advance the state’s clean energy goals, including reducing greenhouse gas emissions and using more renewable sources. Those goals are laid out in several pieces of environmental legislation, including the Green Communities Act of 2008.
Mark Sylvia, commissioner of the Energy Resources Department, said in an interview that the “no net harm’’ standard was “inappropriate given the context of our energy challenges today.’’
NStar officials did not comment directly on the new merger standard. In a statement, the company said it has “embraced the requirements of the Green Communities Act in a number of ways,’’ including by signing long-term contracts for wind-generated energy.
“We are proud of this work and know that together with Northeast Utilities, we can continue these types of initiatives and more,’’ the statement said. “This merger is good news for customers, employees, and the environment and we look forward to demonstrating that to the DPU.’’
NStar and Northeast Utilities unveiled the proposed partnership in October, saying a consolidation would create a $17.5 billion energy company better able to bargain for cheaper supplies of energy. Regulators had started to scrutinize the deal, but suspended hearings while considering a higher standard of review. They are now expected to reschedule those hearings at a procedural conference next week.
Environmental advocates yesterday lauded state regulators for strengthening the standard.
“The order recognizes that the merger could have a major impact on state and environmental policy,’’ said Derek Murrow, energy and climate policy director with Environment Northeast, a research and advocacy group.
Added Sue Reid, a director with the nonprofit Conservation Law Foundation: “Really, ‘no net harm’ when you’re creating this big of a utility is not sufficient.’’
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