State Reaches Agreement On NStar-Northeast Merger
State officials have reached a major agreement Northeast Utilities and NStar that would allow a merger of the two utility companies to go forward in exchange for a four-year rate freeze and a 15-year contract to buy power from Cape Wind.
The deal, if approved by the state Department of Public Utilities, would result in $217 million in savings for ratepayers, including an immediate $21 million merger credit to all customers, according to Attorney General Martha Coakley, who acted as ratepayer advocate. Coakley had originally called for regulators to require $314 million in savings in a five-year freeze.
Connecticut-based Northeast Utilities and Boston-based NSTAR (which has electric and gas customers in Central Massachusetts) announced their intent to merge in 2010 but were held up by state officials, who demanded savings for ratepayers and the use of clean energy.
Gov. Deval Patrick and NStar CEO Tom May announced that the merged company will enter into a 15-year contract to buy 129 megawatts of power from Cape Wind. This comes in addition to the company's contracts for 109 megawatts of onshore wind to meet its renewable energy goals.
The joint company, which would be called Northeast Utilities, would operate six electric and gas utilities in three states, with nearly 4,500 miles of electric transmission lines, 72,000 miles of electric distribution lines and 6,000 miles of gas distribution lines.
(Brad Kane of Hartford Business Journal contributed to this report, and material from State House News Service was used in this report.)
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