Conn. Rules NU-Nstar Merger Requires PURA Approval

Northeast Utilities shall not consummate its proposed merger with Nstar unless and until the Connecticut PURA has issued a final decision approving the merger, PURA ordered yesterday.

The decision comes after PURA previously disclaimed jurisdiction over the merger. Among other reasons, PURA said that it now must exercise jurisdiction over the merger because terms and conditions imposed on the merging companies in order to clear Massachusetts regulatory approval could negatively impact Connecticut service (especially with regards to outage restoration).

"[T]he OCC posits that the terms and conditions that NU may be required to negotiate and obtain consent of other interested persons in Massachusetts, including certain state agencies, and to obtain regulatory approval of the proposed merger from the Massachusetts Department of Public Utilities (MA DPU) raises issues with respect to whether or not any of these terms and conditions may constitute attempts to directly or indirectly interfere with or exercise or attempt to exercise authority or control over CL&P or Yankee Gas with respect to several subject matter areas that fall under the regulatory authority of the Department of Energy and Environmental Protection (DEEP), and in particular the Authority, an agency within DEEP. These subjects include, but are not limited to, levels of service, emergency storm response, renewable energy, energy efficiency, transmission and distribution system best practices, etc," PURA noted

The agreement by which Northeast Utilities would acquire the Nstar companies may be terminated by either party if the merger has not been consummated on or prior to April 16, 2012. Northeast Utilities had said in late December that, "[i]f the Authority decides now that it will assert jurisdiction over the Transaction, the reversal would inject great uncertainty into the process that is likely to extend well beyond the Termination Date when either party may elect to terminate the Agreement"

PURA said that it is, "mindful of certain milestones relating to the completion of the proposed merger and will dedicate all necessary staff resources to achieve a complete and thorough regulatory review consistent with that time schedule."

"Upon receipt of an application for approval of the merger, the Authority will establish a docket and procedural schedule to perform that review. Any issues with regard to the procedural schedule will be addressed in that docket," PURA said.