At its Wednesday, September 3, special session, the New York Public Service Commission (PSC) approved unanimously (by a 4-0 vote) but with conditions the proposed acquisition by Iberdrola of Energy East.
- $275 million in benefits to NY Energy East customers, to be used to either reduce rates or moderate requested rate increases;
- $200 million in investment by Iberdrola in wind energy in New York and if Iberdrola fails to invest the second $100 million, it must use up to $25 million in shareholder funds to invest in economic development projects in its service territories;
- divestiture of Energy East’s fossil fuel generating plants (this was Iberdrola’s proposal);
- a requirement that NYSEG and RG&E (the New York subsidiaries of Energy East);
- establish a special voting right so that a bankruptcy of Iberdrola or its affiliates would not cause a bankruptcy of the New York companies; and
- improved financial transparency and reporting requirements
Commissioner Harris in unprepared remarks called it “not perfect” and “not great” but a “good” deal, noting that all parties but PSC staff endorsed the deal. She expressed hope that Iberdrola will be a “good corporate citizen”. Said she’d personally be reviewing the vertical market power issue (the central concern of the PSC staff) to make sure it’s not exercised by Iberdrola.Commissioner Acampora especially thanked the staff of the PSC and indicated it was incumbent upon the Commission to review the Renewable Portfolio Standard in light of the transaction.
Commissioner Curry hoped other companies would be willing to invest in New York, seeing how the PSC approved the deal (and a previous European company purchase of a local utility — National Grid’s acquisition of Niagara Mohawk).
Chairman Brown likened the review to a scale. Noting there are some risks he said the deal balances to produce a net positive, and should help New York reach its goals regarding renewable energy.
The PSC special session may be found online at either
A PSC press release announcing the approval is available. The written approval with all the details will be posted on the PSC website. Iberdrola will presumably respond once the written details are available.
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