Connecticut Governor, Attorney General announce NU/NStar agreement; Open Space Preserved

Mar 13th, 2012 | By | Category: Top Story

Would Provide Distribution Rate Freeze, $300 Million in Infrastructure Reliability Improvements and $40 Million in Credits and Energy Efficiency Programs to Connecticut Residents

Governor Dannel P. Malloy, Attorney General George Jepsen, and Consumer Counsel Elin Swanson Katz today announced an agreement with Northeast Utilities and Boston-based NSTAR that guarantees substantial benefits to Connecticut residents from the proposed merger of the two utility companies.

The agreement, reached after nearly a month of negotiations, provides at least $120 million in benefits to Connecticut in rate relief, investment in the state’s energy future, and preservation of 1,000 acres of open space. Other benefits include: a two and half year distribution rate freeze; a commitment to keep NU headquarters in Hartford for at least seven years; protection of Connecticut jobs; the opportunity to preserve as much as 8,500 additional acres of open space; and a $300 million investment in infrastructure reliability improvements.

The settlement agreement will be filed today with the state Public Utilities Regulatory Authority (PURA), where review of the proposed merger is now pending. Both the settlement agreement and proposed merger will need state regulatory approval on or before April 2, 2012, and the merger would have to be completed by the companies, for the settlement to become binding.

“After everything our residents have been through over the past year, weathering storms and enduring long outages of utility service, we knew that we had a tremendous opportunity to negotiate an agreement that would really benefit the people of Connecticut,” said Governor Malloy.  “The agreement we’re announcing today does many things, but most importantly, it will ensure that distribution rates for our consumers will stay flat for two and a half years, providing some much needed relief for residents.” 

Attorney General Jepsen and Consumer Counsel Swanson Katz, who pushed the PURA to review the proposed merger and helped to negotiate the agreement, were pleased by the result.

“Protecting Connecticut and the interests of its citizens were our first concerns,” Attorney General Jepsen said. “Like our neighbors in Massachusetts, we will know up front what this merger will mean for our state.”

Consumer Counsel Swanson Katz said, “Connecticut residents are entitled to share in the benefits of any merger and this agreement does that.  They will see a rate credit on their bill and other benefits up front, and more down the road as the savings anticipated from the merger are realized.”

Among the provisions, the agreement provides:

Direct cash benefits:

  • $25 million in uniform rate credits to residential, commercial and industrial customers of NU’s Connecticut Light & Power Co. subsidiary, to be applied in the first billing cycle after the merger is completed.
  • Creation of a $15 million fund for energy efficiency and related initiatives. NU will work with the state Department of Energy and Environmental Protection to develop a targeted plan to advance Connecticut’s interests in expanded energy efficiency programs, including programs available to low-income residents and small businesses; electric vehicles; microgrids; renewable energy projects; and increasing the number of qualified minority contractors providing energy efficiency services. This investment will be paid solely by NU shareholders.

Distribution rate freeze until December, 2014:

  • No general increase in CL&P distribution rates prior to Dec. 1, 2014.
  • The first $40 million in storm-related costs associated with Tropical Storm Irene and the October 2011 snow storm will be excluded from rates. Any additional expenses will be subject to regulatory review and if approved, recovered over a six year period.
  • $21 million in executive compensation will be excluded from rates.
  • CL&P and Yankee Gas customers will bear none of the costs associated with the commitments made by the companies in Massachusetts, including the purchase of power from the Cape Wind project.

Corporate presence:

For a period of at least seven years:

  • NU will maintain a principal Board and Executive offices, functions and staff in Hartford;
  • NU will maintain the headquarters of CL&P, Yankee Gas Services Company, the transmission business and NU Call Center operations in Connecticut;
  • NU will maintain its charitable donations and civic commitments to Connecticut at levels consistent with the past five years.

Job Preservation

  • The aggregate number of line workers in both Connecticut and Massachusetts will not be reduced.
  • CL&P will work with local community colleges in Connecticut to develop a line worker apprenticeship program.
  • Any reduction to other staff in Connecticut will be made “on a fair and equitable basis and will not be disproportionate to other jurisdictions” in which the merged company does business.  The companies expect to make all reductions through normal attrition and not through layoffs.

Open Space and Land Preservation:

  • NU agrees to transfer to an irrevocable preservation land trust four parcels valued at $20 million and comprising nearly 1,000 acres of open space including: King’s Island, Enfield/Suffield, approximately 188 acres; Skiff Mountain, Sharon, approximately 723 acres; Hanover Road, Newtown, approximately 57 acres and Barlett Road, Waterford, approximately 13 acres.
  • Agrees to extend until 2024 an open space land memorandum of understanding with DEEP concerning 375 parcels in 90 municipalities encompassing 8,500 acres of land. Basically, the agreement gives the DEEP, the town in which a parcel is located, or a local land trust an option to buy open space land owned by NU when the company wishes to sell.

System improvements:

  • Commitment to invest $300 million – $100 million immediately –  in improvements to the electric distribution system.
  • Commitment to allocate resources for restoration efforts following major storms fairly among the various states where NU operates, based on operational needs, system requirements and the relative number of outages. An updated plan of mutual aid will be filed with PURA by Sept. 1, 2012.
  • Commitment by CL&P and Yankee Gas to improve non-storm and storm-related service quality improvements.
Settlement Agreement

For more on this story, visit: Attorney General: Governor Malloy, Attorney General Jepsen and Consumer Counsel Katz announce agreement with Northeast Utilities and NSTAR.



NEW HAVEN, CT – Connecticut Fund for the Environment released the following statement today after the state announced an agreement with Northeast Utilities and NSTAR.

“From what we have read, we are pleased with the agreement that has been reached for the NU-NSTAR merger,” said Don Strait, executive director of CFE. “The agreement appears to address our concerns regarding the acres of open space currently owned by NU by transferring some of the most precious parcels into a land trust. It also extends the Memorandum of Understanding for another 10 years, protecting the 8,500 acres of open space from sale for development. This was a good decision, not only for the environment but also for our residents, who will now be able to enjoy these pristine parcels.”

Last month, CFE was granted intervener status by the Public Utilities Regulatory Authority in the NU-NSTAR merger and urged PURA to make sure the merger included an extended MOU that protects the parcels owned by NU from development.

In the agreement:

·        NU agrees to transfer 1,000 acres of open space, including King’s Island (Enfield/Suffield), Skiff Mountain (Sharon), Hanover Road (Newtown), and Barlett Road (Waterford), into a preservation land trust.

·        The MOU is extended until 2024 concerning the other 8,500 acres of land. This gives the local towns where the land is located or a local land trust the option to buy the land if and when the company wishes to sell.

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One Comment to “Connecticut Governor, Attorney General announce NU/NStar agreement; Open Space Preserved”

  1. Jim Newberry says:

    Many municipalities across the country operate locally owned municipal electric systems. Some of these also own power generation. In Sacramento and San Antonio they are actively involved with clean energy economic development for their customers, their citizen-owners. There are about six of these types of utilities within this state, operating in cooperation via the Connecticut Municipal Electric Energy Cooperative. Their rates are typically more competitive than investor owned utilities, since outside investors do not have to be compensated.

    Especially since this deal is for distribution and transmission only, it would seem that instead of more sell-off of state assets to out-of-state corporate interests burdened with maximizing financial returns for their investors, a wiser move would be for the state government to create public power throughout Connecticut. This would not only keep more money within the state, thereby fostering economic development, but would also allow more active utility restructuring for local, clean, renewable energy service, which could be more easily facilitated by local and state initiative.

    I would suggest the state try thinking long term instead of always reacting to corporate initiatives such as this, which are usually about maximizing profit for their particular owners. The electric system is referred to as public service for a reason. Not withstanding the several largely temporary agreements worked out by politicians and lawyers (thank you), this deal seems to be further corporatism of the public sphere. My opinion is that it should be rejected, and the state government should initiate public power.

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