Connecticut regulators declined Wednesday to review Northeast Utilities’ proposed $4.8 billion purchase of a Massachusetts power company, The Associated Press reports
The Department of Public Utility Control said their authority to intervene is not necessary because the state would continue to regulate the Hartford-based utility if the deal is ultimately approved by Massachusetts officials.
The state Department of Public Utility Control said it will not join Massachusetts regulators who are reviewing the deal between Northeast Utilities and NStar, based in Boston. The deal, announced last October, would result in the biggest New England utility company serving 3.5 million electric and gas customers in Connecticut, Massachusetts and New Hampshire.
The agency said last year it does not believe state law allowing it to exercise its authority applies in the Northeast Utilities-NStar deal, but Attorney General George Jepsen, the Office of Consumer Counsel and members of the General Assembly’s Energy & Technology Committee asked the DPUC to reconsider.
The DPUC rejected that request on Wednesday..
If the deal is approved by Massachusetts regulators, Northeast Utilities’ two Connecticut subsidiaries – Connecticut Light and Power and Yankee Gas Services Co. – would still be subject to regulatory oversight by the Department of Public Utility Control, the department said in its decision.
Joseph Rosenthal, principal attorney at the Office of Consumer Counsel, said the office was disappointed and may appeal the decision to the Superior Court. Rosenthal said the office is concerned about the possible impact on consumers with an enlarged power company, such as response time to problems and whether the merged company would focus on developing its electric and gas system in northern New England at the expense of southern New England.
Al Lara, spokesman for Northeast Utilities, said the company has furnished Connecticut regulators with materials from the Massachusetts review and will continue to do so. Northeast Utilities appreciates the agency’s “careful consideration of the issue and clear and concise decision,” he said.
Caroline Allen, spokeswoman for NStar, said the company agrees with Northeast Utilities. She didn’t comment further.
Analysts believe Northeast Utilities’ acquisition should help it pay for large transmission projects intended to bring low-carbon power from northern New England and Canada to higher-population areas in southern New Hampshire, Massachusetts and Connecticut. Northeast has big growth plans but needs more money and may have access to NStar’s cash to help build what the companies hope will be a profitable electric infrastructure.
The deal was valued at $4.17 billion when it was announced in October. But because it’s based on NStar’s share price, the cost of the deal has risen as share prices recovered with the rebounding stock market.
Shares of Northeast Utilities fell 19 cents, to $35.05, in a broad decline in afternoon trading. NStar dropped 38 cents, to $45.66.
