State regulators today approved the $4.5 billion sale of Energy East Corp. to Iberdrola SA., with a requirement that the Spain-based energy conglomerate credit New York customers $275 million.
The sale includes two New York state subsidiaries: Rochester Gas & Electric Corp. and New York State Electric & Gas Corp., which has nearly 90,000 customers in Westchester, Putnam and Dutchess counties.
New York was the last of four Northeastern states to weigh in on the deal. Connecticut, New Hampshire and Maine previously approved the buyout.
The Public Service Commission 4-0 vote follows a non-binding determination by an administrative law judge in June that state regulators should deny Iberdrolaâ€™s takeover of Portland, Maine-based Energy East, saying the sale wasnâ€™t in the interest of New York state residents.
Further, the judge advised that should PSC officials approve the sale, regulators should place conditions on the deal, including requiring Iberdrola to sell wind-turbine generators to prevent any possibility of electricity price manipulation.
Last month, Sen. Charles Schumer, D-N.Y., urged the commission to drop its insistence that Iberdrola sell all its wind power assets, saying that requirement wasnâ€™t in keeping with the goal of moving the state toward renewable sources of energy.
In announcing its approval yesterday, commission Chairman Garry Brown said in permitting the sale, PSC required that Iberdrola credit ratepayers $275 million as a condition in allowing the company to operate both generation and transmission facilities in the state, which the state generally views as unacceptable.
Iberdrola will also be permitted to own and operate Energy East hydroelectric plants but will be required to sell those that operate on fossil fuels, ordering the company to file a divestiture plan of such assets within 90 days of the buyoutâ€™s completion.
Iberdrola must file a written statement of acceptance of the commissionâ€™s order before the deal can close, PSC said.