March 14, 2011
Editorials, Massachusetts

Winds of energy war

By Boston Herald editorial staff, 14 March 2011

The Patrick administration is continuing to hold the proposed merger of NStar [NST] and Northeast Utilities hostage to its costly “green agenda,” which ought to have utility ratepayers in Massachusetts on high alert.

Last week the state Department of Public Utilities announced that it will apply a more rigorous standard than usual in reviewing utility mergers, by requiring that they produce a “net benefit” to the public in order to win regulatory approval. By net benefit, think more wind power and greater efforts to reduce greenhouse gas emissions.

Under the previous non-political standard, in effect for decades, the requirement was that such mergers cause “no net harm.”

It’s a small but significant change, and it was made by the DPU at the specific request of Gov. Deval Patrick’s energy team – after the NStar/NU merger was announced, and after the utilities had already filed official notice with the state.

It also happens to come as Boston-based NStar has declined to enter an agreement with Cape Wind to purchase the private energy company’s wind power at inflated rates. Gee, wonder if the powers-that-be would consider such a deal a “net benefit”  . . .

NStar has already announced agreements with three separate New England wind power companies to purchase energy, while the merged company plans to invest in the transmission of hydroelectric power from Quebec, all of which will enable the utility to meet its renewable energy obligations under existing state law. The fact that it won’t purchase the energy from the Patrick administration’s favored source – which would unduly burden businesses and individual ratepayers – should have no bearing on this merger.

The Patrick-controlled DPU has changed the rules of the game at half-time, and established an ambiguous standard that both exceeds the department’s authority and is vulnerable to political influence. The merger should be evaluated as to its costs, benefits and the impact on the safe, efficient and reliable delivery of electricity. Stretching the standard of regulation in an attempt to further the governor’s dreams of a wind-powered world is plain wrong.

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