Boston-based Nstar’s planned merger with Connecticut’s Northeast Utilities has won final approval – but electricity the state is making the firms buy from green-power company Cape Wind could short-circuit promised savings.
“We strongly object to the state ‘arm-twisting’ Nstar to buy Cape Wind’s wildly overpriced energy,” Audra Parker of the Alliance to Protect Nantucket Sound said yesterday after the Department of Public Utilities OK’d the Nstar/Northeast Utilities tie-up.
DPU approval represented the last hurdle the merger faced, paving the way for the $5 billion deal to close next week.
Critics claim the state held up the merger’s approval until Nstar agreed to buy electricity from Cape Wind, the offshore wind-power project planned for Nantucket Sound.
Considered one of Gov. Deval Patrick’s pet projects, Cape Wind needs long-term contracts from utilities to move forward.
Rival utility National Grid agreed in 2010 to buy 50 percent of Cape Wind’s output, but Nstar had long balked at a similar deal, claiming Cape Wind wanted too much money.
However, the utility relented in February as part of a deal to move the merger’s approval forward.
Nstar’s Cape Wind contract will cost $1.6 billion over 15 years – $940 million more than what the same amount of conventional electricity would have cost.
Critics say that dwarfs the roughly $200 million that Massachusetts consumers will save through a four-year rate freeze Nstar and Northeast Utilities agreed to in exchange for the merger’s approval.
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