After an almost year-and-a-half of review, Massachusetts regulators today approved a nearly $20 billion merger between Boston’s NStar and Northeast Utilities of Connecticut — a combination that will create New England’s largest utility, and would likely give the new company more influence over regional energy and environmental policies.
Shareholders have already approved the deal, and the state’s regulatory consent was the last hurdle the companies needed to clear before combining. It follows several major concessions the utilities made in March in exchange for support from state energy officials and Attorney General Martha Coakley that include a four-year rate freeze that will save consumers nearly $200 million, and buying power from the offshore Cape Wind project.
As part of its approval, the state Department of Public Utilities has asked the combined utility to provide more financial details on the partnership by the end of next week, and to report merger-related savings in five years.
“This merger features significant clean energy and transparency commitments, requiring that NStar Electric begin a new era of opening its books to public review and making renewable energy and energy efficiency investments,” Department of Public Utilities chair Ann Berwick said in a statement.
The merged company will retain the Northeast Utilities name, but be run by NStar’s chief executive Tom May from dual headquarters in Boston and Hartford. Chuck Shivery, Northeast Utilities chief executive, will become the new company’s board chairman. The company’s subsidiaries, including NStar and Western Massachusetts Electric Co., will keep their names locally.
Connecticut regulators approved the merger earlier this week. In exchange for approval from Connecticut regulators, earlier this year, Northeast Utilities agreed to freeze rates for customers in that state, and also promised to spend $300 million on improvements to its system.
Once officially combined, NStar and Northeast Utilities will provide electric and gas service to nearly 3.5 million customers, from Westport, Conn. on the New York border, to Provincetown, to Pittsburg, a Northern New Hampshire town on the Canadian border. The companies expect to close the merger by next Tuesday.