Northeast Utilities Plans To Merge With N-Star

Northeast Utilities has announced it will buy another New England energy company, N-star, in a deal valued at $4 billion, forming one of the biggest utility companies in the country. WNPR’s Harriet Jones reports.

Northeast Utilities and Nstar have been partnering for the last two years on a planned transmission line to bring hydro electricity to New England out of Canada, and the two say the smooth working of that relationship confirmed that they would be a good fit as a merged entity. The combined company will own six regulated gas and electric utilities serving nearly 3.5 million customers in Connecticut, Massachusetts and New Hampshire. NU General Counsel Greg Butler:

“They have a very strong cash position and they have a limited number of investment opportunities. We on the other hand have a great suite of investment opportunities, but we’ve had to issue equity to help to fund those. So it’s one of these things where two plus two equals five.”

Attorney General Richard Blumenthal has called on the state Department of Public Utility Control to ensure there is no impact on customers’ rates and reliability of service as the deal goes forward. Greg Butler says the company can make a pledge on rates.

“This transaction will not raise customers’ bills at all. We will not be seeking to recover the cost of this in rates. We won’t have a proceeding in which we will be asking for any change in rates.”

Butler says there are no current plans for any layoffs, but he says the company will likely find over the long term that savings can be made by eliminating duplicated positions. The combined company will have headquarters both in Hartford, the home of Northeast Utilities, and Boston, where N-star is based. Northeast Utilities and N-star say they plan to invest $9 billion in New England's energy infrastructure over the next five years.

For WNPR, I'm Harriet Jones.Northeast