Power Generators To Fight NStar Merger

By Boston Business Journal

Massachusetts power generators are signaling plans to fight the proposed merger between NStar (NYSE:NST) and Northeast Utilities (NYSE: NU), saying the merger would hurt the stateâ¿¿s competitive electricity marketplace and roll back consumer protections.

The New England Power Generators Association, a Boston-based trade group that represents generators of 85 percent of New Englandâ¿¿s electricity, has filed a petition to receive intervenor status in the Department of Public Utilitiesâ¿¿ review of the proposed merger. The status would give the group the chance to take part in evidentiary hearings and legal briefings during the review.

The merger between Boston-based NStar and Hartford-based Northeast Utilities would create New Englandâ¿¿s largest utility, serving 3.5 million customers and having an enterprise value of $17.5 billion.

Officials from both utilities have said they would pursue rate-based investments in generation, the association said. That would run contrary to the principle of competitive procurement, and ⿿would create significant impediments to innovation and private investment in both traditional and renewable energy in New England,⿝ said Angela O⿿Connor, president of the group, in a statement.

The association also believes the merger as proposed ⿿may inhibit alternatives to ratepayer-funded transmission projects, leading to unnecessarily higher long term sunk costs forced on consumers when local generation is both viable and more economic.⿝

⿿NEPGA believes that, without appropriate safeguards for the competitive markets, the proposed merger will substantially and adversely impact the Commonwealth⿿s competitive electricity marketplace and roll back consumer protections, efficiency improvements and environmental benefits that have been painstakingly achieved over the past 10 years,⿝ O⿿Connor said.

The association said it plans to raise similar concerns in Connecticut, New Hampshire and Maine, which the group said are all impacted by the outcome of the merger review.

The association is one of 14 parties that has filed for intervenor status in the review, according to the DPU website. Others include labor unions, environmental groups and Cape Wind Associates, the developer of the proposed Cape Wind offshore wind farm in Nantucket Sound.

The intervenors are: the Massachusetts Department of Energy Resources; Local 369, Utility Workers Union of America; Mary Oâ¿¿Donnell of Plymouth; Environment Northeast; New England Gas Workers Association; Conservation Law Foundation; New England Power Generators Association; Cape Wind Associates; NRG Power Marketing LLC; Somerset Power LLC; the Cape Light Compact; Retail Energy Supply Association; the Low-Income Energy Affordability Network; and Local 455, International Brotherhood of Electrical Workers, AFL-CIO.

The DPU review of the proposed merger began Wednesday with a public hearing in Boston. The utilities have requested a final decision from the DPU by May 15.

Copyright 2011 American City Business Journals

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Copyright bizjournals.com 2010

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