Connecticut Consumer Counsel Mary Healey and Attorney General George Jepsen argued the merger would create a $17 billion giant that could squash in-state customers
By HARLAN LEVY
Special to The Republican
State Consumer Counsel Mary Healey has filed an appeal in Superior Court of the Department of Public Utility Control’s June ruling that it doesn’t have authority to review Northeast Utilities’ proposed $4.3 billion purchase of Boston-based electricity and gas utility NStar.
Healey and Attorney General George Jepsen had asked state regulators to review the merger, which they said will create a new $17.5 billion giant and could hurt Connecticut customers.
But the DPUC commissioners ruled that they have no legal authority to review the merger because NU is acquiring another company. Under state law the DPUC would have jurisdiction only if a another company is “acquiring or exercising authority or control” over NU and its subsidiaries, Connecticut Light & Power and Yankee Gas.
But Healey argues that NU would become a new company with different directors and management.
“This merger transaction between NU and NStar is of such an enormous magnitude that it should not escape rigorous review by the DPUC,” she said.
Healey noted that Massachusetts is conducting an extensive review of this merger, including public hearings.
Connecticut should do the same, she said, to be sure “citizens would continue to receive safe, reliable service, effective customer service, and an appropriate share of the economic benefits arising from the merger.”
An analysis by NU and NStar concluded that over 10 years the merger would save consumers as much as $780 million, including labor savings from the elimination of duplicative operations, “especially in corporate and administrative areas, not in customer-facing positions or in operations,” the report said, adding that “no broad-based, corporate-wide layoffs or early retirements are planned, and all union contracts will continue to be honored.”
The report also said that NU is a strong “green” company “signing long-term contracts with wind developers and consistently taking a leadership role in energy-efficiency programs” as well as constructing solar generation plants and projects that will bring low-carbon power from Canada into the region.
NU and NStar already have a working relationship in a joint venture owned 75 percent by NU and 25 percent by NStar to build a 140-mile transmission line bringing hydro-electric power from Canada to New England. An estimate of regional savings is as much as $325 million along with lower electrical bills in each of the six New England states when it’s up and running, in five years at the earliest.
In early February the Federal Energy Regulatory Commission approved the financial part of the merger, and shareholders of both companies approved the deal.
NU operates New England’s largest utility with annual revenues of $5.4 billion and assets of $14.2 billion. It serves more than 2.1 million customers in Connecticut, Massachusetts, and New Hampshire.
NStar is the largest Massachusetts-based, investor-owned electric and gas utility serving 1.4 million customers in Eastern and Central Massachusetts, including more than one million electric customers in 81 communities and 300,000 gas customers in 51 communities.