N.Y. Regulators Leery of Utility Acquisition

ALBANY, N.Y. – The last objection to a Spanish power company’s proposed $4.6 acquisition of the regional utility Energy East Corp. is from New York regulators who question the deal’s promise to stabilize rates, boost the upstate economy, and generate more wind power.

Public hearings on the proposal end this week in upstate New York.

In January, Maine’s regulator signed off on the sale of Energy East to Iberdrola SA. There was no opposition to the deal in Maine, where 80 percent of electric customers are served by Energy East’s Central Maine Power subsidiary.

The deal would affect 3 million customers from upstate New York to Maine and would put Rochester Electric and Gas Corp. and New York State Electric & Gas Corp. under foreign ownership.

New York staff members, however, advised the state Public Service Commission that the deal won’t lower rates or be in the public interest. The staff argued that the deal could discourage wind power development unless Iberdrola and Energy East are prohibited from owning traditional power plants. They argued there would be little incentive to develop alternative fuels if the energy provider also owned traditional power plants.

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