An important development today in the Northeast Utilities/NStar merger proceeding: the Massachusetts Department of Public Utilities (MA DPU) announced that it will modernize the standard of review for utility mergers, including requiring that climate change impacts be taken into account. CLF issued the following statement in response:

Sue Reid, director of Conservation Law Foundation’s Massachusetts office, said, “The DPU’s decision to modernize the standard of review for utility mergers and require that climate change impacts be taken into account is a very welcome development. A merger like the one proposed by NU and NSTAR – which would create the largest utility in New England and one of the largest in the nation – appropriately should be required to meet a “net benefit” test, rather than the mere “no net harm” standard used in the past. This change goes to the core of the merger petition filed by NU and NSTAR. These companies now must bear the burden of proof to demonstrate how this merger would benefit the public – in terms of jobs created, consumer choice, renewable energy commitments, and greenhouse gas reductions in keeping with Massachusetts’ ambitious requirements. It also will provide a more meaningful opportunity to address widespread concerns raised by stakeholders from the environmental, business and labor communities about the potential impacts of the proposed merger.”

CLF intervened in the NU/NStar proceeding in January, 2011.

CLF has intervened in proceedings regarding the proposed merger of Northeast Utilities (NU) and NSTAR, which combined would create the third largest utility in the country and the largest in New England. CLF has intervened in the proceedings before the Massachusetts Department of Public Utilities (DPU) to ensure that the merger will only be allowed to go forward if it is “consistent with the public interest.”  This will require a thoughtful analysis of the merged utility’s long-term strategies for delivering energy while fully meeting the greenhouse gas emission reductions, renewable energy and energy efficiency requirements of the MA Global Warming Solutions Act and Green Communities Act.  It also will require a close look at the economic and environmental risks posed by the energy generation assets that would be owned by the merged utility.

One of CLF’s concerns is that NU subsidiary Public Service of New Hampshire (PSNH) owns and depends upon outdated, inefficient coal- and oil-fired power plants. These plants – which are obsolete and increasingly more expensive and less economic to operate – present risks and liabilities that would be spread to NSTAR’s ratepayers if the merger goes forward.  Another concern is that the merged utility might seek to weaken Massachusetts’ renewable energy standards, as suggested in some of the utilities’ public statements, allowing large hydropower to “flood” the market (pun intended!) and chill development of other renewable energy sources such as small wind and solar facilities.

Currently, the procedural schedule for the merger proceeding pending before the Massachusetts DPU has been suspended while the DPU considers whether to modernize the legal standard it will apply.  CLF and other parties have asked that the legal standard be adapted to account for changes in relevant laws, including the Global Warming Solutions Act and Green Communities Act.

Stay tuned as we await the DPU’s ruling and further action in the merger proceeding!