Tuesday, February 19, 2008

PSC to hear comments on Energy East-Iberdrola merger tonight

Public Service Commission representatives are soliciting comments on Iberdrola's proposed acquisition of Energy East Corp., the parent of New York State Electric & Gas Corp. and Rochester Gas and Electric.

The Binghamton session is scheduled for 7 p.m. today at the community room of the State Office Building, 44, Hawley St.

While both Iberdrola and Energy East are saying the merger could have major customer benefits, the state regulatory agency is questioning that assessment. Public Service Commission staff said that the merger would not, without modification, benefit customers.

Commission staff also question whether the merger would, as the companies claim, enhance renewable energy investments in the state. It has been commission policy that electric distribution companies divorce themselves from generation, and the proposed merger would mean that both NYSEG and RGE would control more electric generation capacity.

The commission is also asking that additional measures be put in place to protect electric customers from the financial risks of Iberdrola's other businesses.

Regulators in other states where Energy East has operations have already approved the merger. Federal agencies have also signed off on the merger.

Another sticking point in the approval process has developed over the past three weeks. Iberdrola could itself be the subject of acquisition in the coming weeks or months, and New York regulators want to hold off review of the Energy East deal until it knows the final fate of Iberdrola.

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