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State on merger: Hold utilities to account
Opponents of the proposed Nantucket Sound wind farm have accused the state of using the merger proceedings to force NStar to buy half of the project's power. National Grid has already agreed to buy the other half. Cape Wind officials have specifically requested that the merger's approval be tied to NStar buying the remaining power. State energy officials have argued that the DPU should hold off on a decision on the merger until more information is provided on how it will help the state meet its green-energy goals
Credit: By Patrick Cassidy, Cape Cod Times, www.capecodonline.com 24 December 2011 ~~
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State energy officials want regulators to consider how Northeast Utilities and NStar responded to Tropical Storm Irene and a severe October snowstorm as they review the companies’ request to merge.
The state Department of Public Utilities is reviewing the proposed $17.5 billion merger. NStar delivers electricity on Cape Cod and Martha’s Vineyard.
Mark Sylvia, commissioner of the state Department of Energy Resources, said his agency has stressed the importance of NStar meeting a “net public benefit” standard that the DPU has established in its review of the merger. The net public benefit standard is a higher hurdle than previously existed and includes a requirement that the merger of the two companies help the state meet its renewable energy goals.
Further, the energy department wants the DPU to consider whether NStar and Northeast Utilities’ Massachusetts-based subsidiary Western Massachusetts Electric Co. have adequate systems in place to respond to outages, such as those after the storms on Aug. 28 and Oct. 29, Sylvia said.
The DPU should review whether the utilities have adequately reviewed and integrated their emergency response plans so that they meet state standards, according to a request DOER submitted this week.
Tropical Storm Irene at the end of August knocked out electricity to thousands of customers on Cape Cod, some of whom did not get power back for a week.
Outages related to the October storm affected about 19,000 customers on the Cape.
Power to all of those customers was restored within three days, according to NStar officials.
The DPU initiated reviews of NStar’s response to both storms.
Accusations in the wind
Opponents of the proposed Nantucket Sound wind farm have accused the state of using the merger proceedings to force NStar to buy half of the project’s power.
National Grid has already agreed to buy the other half. Cape Wind officials have specifically requested that the merger’s approval be tied to NStar buying the remaining power.
State energy officials have argued that the DPU should hold off on a decision on the merger until more information is provided on how it will help the state meet its green-energy goals.
“From our perspective, the important thing here is the ratepayer,” Sylvia said. “Mergers don’t happen very often, and it’s our obligation at the end of the day to ensure they’ve demonstrated they meet the net public benefit standard.”
After several months of delays, an oral argument on the department’s request to stay the proceedings has been scheduled for Jan. 6.
“The whole motion is predicated on the idea that there are inadequate (emergency response plans) in place, and we disagree with that,” NStar spokeswoman Caroline Allen said about this week’s request to include the storm response in the merger review. “We follow a DPU-approved storm response plan.”
Their plans are not integrated but are approved by the state, Allen said.
“We believe the DPU should not grant a stay and that granting it would delay the realization of merger benefits for customers,” said Northeast Utilities spokeswoman Deborah Bauchamp.
“The DPU is already undertaking a review of the storms and the companies’ emergency preparedness and that review will continue with or without the merger.”
Bauchamp said she did not believe the request to include the response of the companies to the storm-related outages in the DPU review is related to Cape Wind.
Cape Wind, which won federal approval in 2010, continues to face substantial opposition. In October, a federal appeals court overturned an approval of the project by the Federal Aviation Administration.
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