Tuesday, January 15, 2008

Spanish utility closer to buying CMP owner

There are no opponents to the sale of Energy East, a deal under review by Maine's utility regulators.

The Associated Press January 13, 2008

BANGOR — Spanish utility Iberdrola SA is closer to
acquiring Energy East, whose subsidiaries have 3 million
customers from New York to Maine.

Iberdrola, of Bilbao, Spain, submitted terms of the sale to the
Maine Public Utilities Commission on Thursday. The sale is
worth 3.4 billion euros ($4.6 billion) in cash and 3 billion euros
($4 billion) in debt.

If approved, the deal would be Iberdrola's first direct purchase of
an American utility. Energy East, based in New Gloucester, is the
parent company of Central Maine Power Co., which serves 80
percent of Maine's electricity customers.

Energy East also owns utilities in New York, Connecticut and
Massachusetts, which employ 5,800 people.

At the PUC's request, the sale agreement includes CMP's
willingness to reconsider its membership in the ISO-New
England regional power grid. Gov. John Baldacci opposes Maine's
membership in ISO-New England. Critics say Maine consumers
pay more than their fair share of regional power rates.

The agreement says the parties involved "agree that the existing
transmission cost allocation methodology employed in ISO-NE is
inequitable as applied to Maine ratepayers and must be modified
to ensure that the interests of Maine ratepayers are protected."

State Public Advocate Richard Davies, who helped to draft the
agreement, said the acquisition of Energy East is unlikely to
affect customer rates. Davies believes rates are more likely to be
affected by Maine's membership in ISO-New England.

There are no opponents to the sale, but Bangor Hydro-Electric
Co. had a "limited intervention" status in the case and then
recently asked to withdraw.

Karen Redford, Bangor Hydro's attorney, said Friday that the
company had concerns about the portions of the agreement
addressing ISO-New England, but decided not to stand in the
way of the sale.

A draft report by Maine's PUC to the Legislature says ISO-New
England rules inequitably allocate costs among the region's
consumers so those in smaller states have to shoulder the costs
of larger states.

The report to the committee that oversees utilities recommends
that Maine utilities consider establishing an independent Maine
transmission company or connect to the grid in New Brunswick.

Copyright © 2008 Blethen Maine Newspapers

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