The Connecticut Public Utilities Authority in a draft decision on Tuesday rejected the proposed $3 billion acquisition of New Haven utility parent UIL Holdings by Spanish energy giant Iberdrola.
The PURA commissioners said in their draft decision that they didn’t know enough about how Iberdrola would operate UIL’s three Connecticut utilities – United Illuminating, Connecticut Natural Gas and Southern Connecticut Gas – and wouldn’t ask ratepayers to venture into the unknown. The commissioners said Iberdrola’s history of mergers and acquisitions didn’t give them confidence moving forward.
The draft decision is not the final say and Iberdrola and UIL still could secure approval of the deal before PURA renders its final decision, which would come after a July 17 special meeting between the parties involved.
“Clearly we were disappointed with the Connecticut Public Utilities Regulatory Authority’s draft decision regarding the Iberdrola-UIL Change of Control proceeding,” said UIL CEO James Torgerson, who will lead the new company. “While the current draft language would, if adopted as final, deny the change of control of UIL, the draft decision also provides an opportunity to UIL and Iberdrola to address the concerns that PURA expresses in the draft decision. We look forward to providing clarification and additional information to PURA quickly.”
PURA gave UIL and Iberdrola a list of proof they could provide to prove the utilities would operate in a successful manner after the transaction showing that the transaction would be in the public interest, the managerial structure would remain effective, the new company would have the financial wherewithal to continue operating the utilities, and the new company would provide safe and reliable energy to customers.
“We truly believe the proposed transaction can bring significant value to our customers, including tangible benefits, as we continue to deliver safe and reliable service,” Torgerson said.
Iberdrola and UIL had hoped to have the transaction completed by the end of the year. They have achieved the majority of their regulatory approvals, except for those from Connecticut, Massachusetts, the U .S. Securities & Exchange Commission, the Federal Communications Commission and the Committee on Foreign Investments in the U.S.
