State regulators have approved a multibillion-dollar merger between NStar and Northeast Utilities, clearing the way for the creation of New England’s largest utility company.
NStar delivers electricity to Cape Cod, Martha’s Vineyard and other communities in the southeastern part of the state and the greater Boston area. Northeast Utilities delivers power to customers in Connecticut, New Hampshire and western Massachusetts.
The Massachusetts Department of Public Utilities filed an order today approving Northeast Utilities’ bid to buy NStar in a stock exchange of roughly $5 billion. The new company will be worth nearly $20 billion and serve 3.5 million electric and gas customers in three states.
The merger between the two utility giants includes a $21 million onetime credit for NStar’s customers, a freeze on the utility’s base distribution rate until 2016 and a provision that NStar buy more than a quarter of the power produced by the proposed Nantucket Sound wind farm.
“The agreements unquestionably create benefits both in terms of the financial implications for ratepayers and job creation in the state’s growing clean energy sector,” DPU chairman Ann Berwick said in a statement released with the agency’s approval of the merger. “This merger features significant clean energy and transparency commitments, requiring that NStar Electric begin a new era of opening its books to public review and making renewable energy and energy efficiency investments.”
Connecticut regulators approved the merger Monday. Northeast Utilities agreed to a $25 million rate credit for about 1.2 million customers of its subsidiary Connecticut Light and Power. The company also agreed to a freeze on distribution rates until December 2014 and $300 million in system improvements.
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