HARTFORD – Connecticut consumers were ensured benefits from the proposed merger of Northeast Utilities and Boston-based NSTAR by the final approval today of the merger and a Connecticut settlement agreement negotiated by Attorney General George Jepsen and Consumer Counsel Elin Swanson Katz.

The Public Utilities Regulatory Authority said the agreement, and any merger conditioned on its terms, were in the public interest. The PURA had given preliminary approval to the agreement last week and their findings were little changed in today’s decision.

“The Authority hereby approves the merger by stock exchange of NU and NSTAR subject to the Orders cited below and subject to the terms of the CT Settlement.  The Applicants have demonstrated that this Transaction is in the public interest,” the regulators wrote.

With the PURA’s approval, the terms of the Connecticut settlement become binding on NU and NSTAR if they complete their merger as planned later this year.  Massachusetts regulators are expected to decide on the merger this week.

“This is a good result,” said both Attorney General Jepsen and Consumer Counsel Katz. They were gratified their repeated calls for a state review were recognized and that the end result produced substantial benefits for Connecticut ratepayers.

“The table is now set and we’re ready to serve up what we’ve been able to achieve,” Attorney General Jepsen said. “There’s plenty to choose from: $25 million in rate credits, a distribution rate freeze until December, 2014; a $15 million energy efficiency fund; $300 million in system improvements and permanent preservation of valuable open space, among other protections.”

Consumer Counsel Katz said, “We were given a unique opportunity to work together as a state.  The Attorney General, the Consumer Counsel, and the companies, with guidance from Governor Malloy and the assistance of Commissioner of Energy and Environmental Protection Dan Esty and his staff, crafted a landmark settlement that assures the public interest is served by this merger.”

“This agreement brings forth meaningful, significant benefits to Connecticut consumers. It preserves jobs and open space, and addresses the important issue of storm response,” she said.

Deputy Attorney General Nora Dannehy, Assistant Attorneys General Michael Wertheimer and John Wright, with Associate Attorney General Joseph Rubin assisted the Attorney General in this matter. Attorney Joseph Rosenthal and Supervisor of Technical Analysis Richard Sobolewski assisted the Consumer Counsel.

Among the provisions, the settlement agreement provides:

• $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 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.
• 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 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.
• $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.
• For a period of at least seven years:
• NU will maintain its 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.
• 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 through normal attrition and not through layoffs.
• 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.
• NU 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.

CONTACTS:

Attorney General: Susan E. Kinsman

susan.kinsman@ct.gov – 860-808-5324 or 860-478-9581

OCC: Consumer Counsel Elin Katz 

elin.katz@ct.gov – 860-827-2910