The $4.7 billion merger of Hartford-based Northeast Utilities and Boston-based NStar neared the finish line Monday after state utility regulators gave their final approval.
The Public Utilities Regulatory Authority in New Britain issued its final decision just a week after issuing a draft decision and hearing objections. PURA’s review of the merger was expedited because the utilities had set April 16 as the deadline for a merger.
PURA’s decision means NU and NStar need only approval from regulators in Massachusetts to complete the proposed merger, which would create the largest utility parent company in New England. A decision by Massachusetts regulators is expected Wednesday.
State Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz issued a joint statement describing PURA’s decision as “a good result” that provides “substantial benefits” for ratepayers in the state.
Jepsen and Katz were among those who negotiated a settlement with NU that provides ratepayers in the state with a $25 million rate credit, as well as a distribution rate freeze until Dec. 1, 2014. NU also agreed to make $300 million in upgrades to its infrastructure, to invest $15 million in various energy efficiency programs, to develop a micro-grid infrastructure, and to donate to the state 1,000 acres of open space valued at $20 million.
NU also agreed not to reduce the aggregate number of line workers, and to retain its headquarters in Hartford for at least seven years.
“This agreement brings forth meaningful, significant benefits to Connecticut consumers,” Katz said in the joint statement with Jepsen. “It preserves jobs and open space, and addresses the important issue of storm response.”
State Department of Energy and Environmental Protection Commissioner Daniel C. Esty also praised the final decision, calling it good news for the state.
“It means Connecticut’s ratepayers and our state are now well positioned to share in the benefits of this merger,” he said. “It allows Connecticut to continue building a more secure energy future. And it supports Gov. Malloy’s agenda of bringing cleaner, cheaper, and more reliable power to our state while stimulating our economy and protecting our environment.”
NU and NStar have also agreed to conditions for approval of the deal in Massachusetts. The utilities agreed in February to buy more than a quarter of the power produced by the Cape Wind offshore wind farm, a huge boost for the proposed 130-turbine project to be located about 5 miles off Cape Cod in Nantucket Sound.
If the merger between NU and NStar is completed, the combined utility would have six subsidiaries and 3.5 million customers in Connecticut, Massachusetts and New Hampshire. NU is the parent company of Connecticut Light & Power Co. and Yankee Gas Services Co.
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