HARTFORD, Conn. (Legal Newsline) - Connecticut Attorney General George Jepsen announced a settlement on Tuesday with Northeast Utilities and the Boston-based NSTAR.
Jepsen says the settlement guarantees major benefits to Connecticut residents in the proposed merger of the two utilities companies. The agreement provides at least $120 million in benefits to Connecticut in the state's energy future, the preservation of 1,000 acres of open space and rate relief.
In addition, the state will receive a 2.5 year distribution rate freeze, the opportunity to preserve as much as 8,500 additional acres of open space, a $300 million investment in infrastructure reliability improvements and a commitment to keep NU's headquarters in Hartford for at least seven years.
The agreement was filed on Tuesday with the state Public Utilities Regulatory Authority. The review of the proposed merger is currently pending. The settlement agreement and the proposed merger must have state regulatory approval on or before April 2 and the merger must be completed by the companies for the settlement to become binding.
Jepsen, Gov. Dannel Malloy and Consumer Counsel Elin Swanson Katz pushed PURA to review the proposed merger and helped to negotiate the settlement.
"Protecting Connecticut and the interests of its citizens were our first concerns," Jepsen said. "Like our neighbors in Massachusetts, we will know up front what this merger will mean for our state."
The agreement provides direct cash benefits, including $25 million in uniform rate credits to industrial, commercial and residential customers of Connecticut Light & Power Co.(NU's subsidiary), the creation of a $15 million fund for energy efficiency and related initiatives and programs such as those available to low-income residents and small businesses and increases the number of qualified minority contractors.
The distribution rate freeze until December 2014 includes no general increase before Dec. 1, 2014, for CL&P distribution rates, the exclusion of the first $40 million in storm-related costs connected with Tropical Storm Irene and the October snow storm, the exclusion of $21 million in executive compensation and the promise that CL&P and Yankee Gas customers will bear none of the costs connected with commitments made by the companies in Massachusetts.
Additionally, for at least seven years, NU will maintain a principal board and executive functions, offices and staff in Hartford, NU will maintain the headquarters of CL&P, Yankee Gas Services Company, the NU Call Center and the transmission business in Connecticut, and NU will maintain its civil commitments and charitable donations to Connecticut at levels consistent with the prior five years.
The agreement also includes provisions for job preservation, open space and land preservation, and system improvements.