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Mass. Governor Asks To Delay Approval of NU-NStar Merger

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(Darren McCollester/Getty Images News)

(Darren McCollester/Getty Images News)

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BOSTON (AP) _ Gov. Deval Patrick’s administration has asked Massachusetts utility regulators to hold up on approval of Connecticut-based Northeast Utilities’ proposed $4.73 billion purchase of Boston-based NStar in a move the two companies say could scuttle the deal.

The state Department of Energy Resources has asked the Department of Public Utilities not to make a decision until NStar completes a formal review of its rates. That could result in approval being put off until late next year _ a delay the two companies say could jeopardize the deal.

State energy officials say the companies have failed to provide sufficient detail about the environmental and financial benefits of the proposed merger. The companies also have not provided “substantive information” on proposed rate changes resulting from the proposed merger, the Department of Energy Resources said.

Officials of Northeast Utilities and NStar have said the merger, creating the largest utility in New England, would not stifle competition or increase rates but would result in savings to customers.

“This attempt to delay seems inconsistent with the Patrick administration’s goal to improve the business climate in Massachusetts,” Caroline Allen, spokeswoman for NStar.

The deal would bring together two companies, providing thousands of local jobs and saving customers $784 million over 10 years, she said.

NStar reached a rate settlement in 2005 that was approved by regulators, Allen said. Rates were “comprehensively reviewed then and would be again” in another rate case next year, she said.

The two companies say the agreement includes a clause terminating the deal if it is not approved within 18 months from the Oct. 18, 2010, announcement. Delays could wreck the deal, they said.

Al Lara, spokesman for Northeast Utilities, said the deal must be approved by Massachusetts, Maine, the Federal Energy Regulatory Commission, Nuclear Regulatory Commission and other federal agencies. All but Massachusetts and the Nuclear Regulatory Commission have OK’d the proposal, he said.

Connecticut regulators have refused to intervene, saying they would still have oversight over two subsidiaries of Northeast Utilities, based in Hartford. The state’s top consumer advocate has gone to court to force the Department of Public Utility Control to review the utility deal.

In its filing, the Department of Energy Resources said no decisions regarding the organizational structure of the merged company would be made until October 2011 or later and any assessment of rates would not be made until NStar’s next rate case, which is scheduled for 2012. Those decisions could directly affect the interests of ratepayers and the interests of Massachusetts and state residents and should be considered during the state review, officials said.

“The department’s standard of review and the interests of customers merit more than cavalier dismissal of required evidence,” the agency said.

State officials say the two companies should be required to provide a merger integration plan, an analysis of how the combined companies will grapple with climate change, and a proposed rate change schedule.

(Copyright 2011 by The Associated Press.  All Rights Reserved.)

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