Energy East sale conditions accepted

ALBANY, N.Y. – Global energy company Iberdrola SA has accepted a series of conditions New York regulators placed on its buyout of Maine-based Energy East and plans to go ahead with the $4.6 billion deal.

The approval of New York’s Public Service Commission was the last obstacle Iberdrola faced in its bid for Energy East, which owns power companies in Maine, New York, Connecticut and Massachusetts. Regulators in the other states had approved the plan.

Iberdrola and Energy East, which is the parent of Central Maine Power Co., sent letters to the PSC on Wednesday saying they accept its terms and conditions on the buyout. Neither said when they expect to close the deal.

Bilbao, Spain-based Iberdrola met stiff resistance in New York, where staff analysts at the PSC initially took a hard line against the buyout, citing concerns that it wouldn’t be in the best interest of state consumers and businesses.

Energy East also is the parent of Rochester Gas and Electric Corp. and New York State Electric and Gas, which together have 1.7 million electricity and natural gas customers.

After more than a year of regulatory wrangling, the PSC endorsed the deal last week but imposed a series of conditions aimed at protecting customers.

The conditions include requiring Iberdrola to put aside $275 million in a special fund to offset future rate increases and to sell the fossil-fuel power plants Energy East owns in New York to conform with a state policy that power companies shouldn’t own both transmission lines and generating plants.

At the same time, the commissioners allowed Iberdrola to keep plants powered by wind and water. The PSC’s compromise, however, requires Iberdrola to commit to spend $200 million on wind energy development in New York.