January, 18, 2012
PURA Final Decision Calls for Review of NU/NSTAR Merger
Orders NU to Submit Application Prior to Any Merger
Note: Decision will be posted shortly on the PURA website (www.ct.gov/pura
The Connecticut Public Utilities Regulatory Authority (PURA) today concluded that it has the regulatory jurisdiction to review and approve the proposed merger between Northeast Utilities (NU) and NSTAR.
In a final decision (Docket Number 10-12-05RE01) that upholds a draft decision issued January 3, 2012 PURA states that it is “legally obliged to review the proposed merger to ensure that after any resulting merger, Connecticut Light & Power (CL&P) and Yankee (Yankee Gas Services Company) will have the qualifications and ability to provide safe, adequate, reliable and reasonably-priced services for Connecticut customers.” PURA ruled that “it must review and approve, with necessary or appropriate terms and conditions, or disapprove the proposed merger between NU and NSTAR.”
The final decision also contains an order stating that, “NU shall not consummate the proposed merger unless and until the Authority (PURA) has issued a final decision approving the merger.”
The decision today reverses a previous PURA ruling which was under appeal by Connecticut’s Office of Consumer Counsel (OCC). In its decision, PURA cited new information provided by Connecticut’s Attorney General and the OCC as the reason for concluding it has jurisdiction to review the proposed utility company merger. This information was submitted as part of a proceeding (Docket Number 11-12-07) initiated by the NRG Companies that asked PURA to reconsider its previous ruling.
The PURA decision states that, “The OCC specifically raises issues about whether certain merger approval terms and conditions that may be agreed to or imposed in Massachusetts may constitute interference with or exercise of authority or control over a Connecticut public service company in violation of Conn General Statutes…”
The decision also notes that an analysis presented by Attorney General George Jepsen of the significance of possible management changes that would occur under a merger of NU and NSTAR also point to PURA’s jurisdiction on this matter.
The decision states that, “The Authority (PURA) finds that all of these changes in management and ownership composition are changes that affect and impact the holding company corporate parent’s control and authority, including who makes the decisions concerning the policies and operations of CL&P and Yankee. Based on the foregoing, the Authority’s jurisdictional duty to review the proposed merger is triggered.”
In its decision, PURA said, “The Authority 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 concerning the merger, PURA will establish a docket and procedural schedule to expeditiously perform that review.