Feb. 15, 2012
BOSTON — Massachusetts Gov. Deval Patrick has agreed to sign off on a merger between NSTAR and Northeast Utilities, removing a major roadblock from the $17.5 billion deal. The state had been holding off while the utilities negotiated a side deal to buy renewable power from the controversial Cape Wind project.
Patrick, who's a big supporter of Cape Wind, applauded the deal at the State House on Wednesday.
"What we have today is a landmark agreement for customers. It will protect ratepayers from rate increases now into the future and it passes on the savings from the merger directly back to the customer," he said.
Until now, NSTAR had refused to buy Cape Wind power, saying it was too expensive. And it was widely speculated in op-eds and newspapers that the Patrick administration was holding up the merger in order to compel NSTAR to buy Cape Wind Energy.
But state energy secretary Richard Sullivan downplayed Cape Wind's significance:
"When you stack out what the time was spent on over the past year, a very small percent was spent on Cape Wind," he said. "I think this agreement shows that while Cape Wind has been a priority, it has not been Cape Wind at any cost.”
Under the new agreement, the new utility would freeze its rates for the next four years, and would provide customers with a one-time rebate of about $12 to $15 for the average ratepayer. And it would sign a long-term contract for 27.5 percent of Cape Wind's electricity. Another utility, National Grid, last year, signed a deal for half the project's output at above-market prices. Long-term contracts are seen as essential for Cape Wind's viability.
The merger must still be approved by Massachusetts and Connecticut utility regulators.
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