NU, CT Agree On Merger Concessions
To secure Connecticut's approval of their merger, Northeast Utilities and NStar agreed to give state ratepayers $25 million, freeze rates for three years, and retain Hartford as the merged firm's primary headquarters for at least seven years.
The concessions announced Tuesday means Gov. Dannel Malloy, Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz will sign off on the proposed $4.7 billion merger, all but ensuring the state Public Utilities Regulatory Authority will approve the transaction in its ruling on April 2.
With a similar concession deal nearly ensuring approval from Massachusetts regulators in early April as well, NU and NStar, based in Boston, will have all the necessary approvals for their merger creating the largest utility company in New England with 3.5 million customers in Connecticut, Massachusetts and New Hampshire.
Among its Connecticut concessions, NU for the next seven years must keep its principal board and executive offices, functions and staff in Hartford.
It also agreed to maintain the Berlin headquarters of electric subsidiary Connecticut Light & Power and natural gas subsidiary Yankee Gas; keep its transmission and call center operations in Connecticut; and maintain its charitable donations to Connecticut at levels consistent with the past five years.
The concessions do not prevent the company from opening up a second headquarters in Boston, which was the plan when the merger was first announced on Oct. 16.
"It doesn't change our proposal to have dual headquarters between Hartford and Boston," NU spokesman Al Lara said.
Under the agreement, CL&P will forgo recovery of $40 million of the $260 million in costs from the power outage restoration following the major storms in August and October. For the remaining $220 million in storm costs, CL&P will defer recovery until its next rate case.
CL&P must also submit a $300 million, multi-year plan to harden its infrastructure to prevent further outages.
NU also agreed to a one-time, $25 million rate credit for CL&P ratepayers; freezing distribution rates until Dec. 1, 2014; investing $15 million in energy efficiency programs for low-income customers; and explore projects for electric vehicles, microgrids and renewable energy.
Finally, NU will donate 981 acres in Enfield, Suffield, Sharon, Newtown and Waterford to the state Department of Energy & Environmental Protection; and CL&P will work with community colleges to develop a line worker apprentice program.
To win Massachusetts' approval, NU agreed to provide a $21 million rate credit for ratepayers; freeze rates in Massachusetts until 2016; and buy power from the offshore renewable energy project Cape Wind.
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