BANGOR – The $206 million merger between Bangor Hydro-Electric Co. and Emera Inc. of Nova Scotia was approved by the Maine Public Utilities Commission on Monday, about one month ahead of schedule.

The deal was not accepted without conditions attached, something that the Canadian company expected when it formally announced its intention to buy Bangor Hydro on June 30.

Similar conditions were applied when Energy East Corp. of New York purchased CMP Group, the parent of Central Maine Power Co., in a nearly billion-dollar deal that was completed last summer.

One of the primary conditions attached Monday was that consumers would not be asked to pay higher rates to make up the difference between the book value of Bangor Hydro and the purchase price, which is 1.4 times the book value. Throughout the proceedings, Emera has said that will not happen.

Emera, formerly NS Power Holdings, will be paying $26.50 per share for nearly 7.4 million shares once the merger is completed. Emera still needs the approval of the Federal Energy Regulatory Commission and the federal Securities and Exchange Commission, both of which are expected by the end of June.

Among the other conditions are assurances that service quality will not be affected by the deal, and that Emera will not start dismantling the utility or reduce its capital investment in the company.

Bangor Hydro President Robert Briggs said he is pleased that the merger was approved, and done so far ahead of schedule.

“I’m glad to get this over with,” Briggs said. “We should be done with the regulatory process in the first half of 2001. I’d like it to be sooner.”

Briggs intends to resign as head of the more than 100-year-old utility after the merger is completed.

The largest benefactors from the sale will be about 120 municipalities in Bangor Hydro’s service territory, which will share $21.3 million when they exercise the 825,000 warrants in their possession. Warrants are outstanding shares of stock that entitle the holder to buy the shares at a previously specified price.

Municipalities received the warrants in 1998 when Bangor Hydro restructured its contract with Penobscot Energy Recovery Co. for the price it was paying for energy output from PERC’s waste incinerator. The communities were given the warrants in exchange for guaranteeing to ship a certain amount of waste tonnage to the plant for use as fuel.

Those towns can now purchase the outstanding shares at $7 each, and when the merger is approved, cash in the shares for $26.50 each, pocketing the $19.50-per-share difference.

The MPUC, in its approval of the deal, set up a long-term formula to ensure that the $19.50-per-share difference isn’t charged to consumers through rates by Emera, said MPUC senior analyst Mitch Tannenbaum.

Instead, the towns, through the Municipal Review Committee, agreed to accept their payments with interest over a seven-year period. Emera then agreed not to factor the $19.50-per-share difference into rates, Briggs said.

Anthony Buxton, who was hired to be Emera’s attorney through the merger proceedings, said that during the MPUC’s review of the merger, the commission was interested in why Emera’s transmission costs were lower in Nova Scotia when compared to costs in Maine.

The utility mentioned that it applies forestry management practices along its transmission lines by not spending time and money cutting tree limbs to make sure they do not fall on the wires. Instead, the company plants trees along the lines that do not grow more than 12 feet tall, thus not touching or affecting the wires, according to Buxton.

The attorney, speaking for Emera, said MPUC’s approval of the deal is a “little historic step” for Maine.

“It’s the first ever major economic relationship between a company in Maine and a company in eastern Canada,” Buxton said. “They’ve talked about looking east, here it is. They’ve talked about Atlantica, here it is.”