The Connecticut Department of Public Utility Control (DPUC) has approved the acquisition by Consolidated Edison of Northeast Utilities but has applied financial conditions which may call the deal into doubt. The merger of the two companies, which will cost Con Edison $7.5 billion, would create one of the USA’s largest gas and electricity companies with a consumer base of more than 6 million customers.
A Con Edison spokesman responded to the 150 page approval document by claiming its conditions raised serious questions about the merger. The company intends to ask the DUPC to reconsider its decision. Among the conditions imposed by the DUPC to protect the interest of the consumers are that Connecticut Light and Power, a subsidiary of Northeast Utilities, writes off $60 million in stranded costs and cuts distribution rates by 3 per cent within 60 days of the merger. The rate cut, worth $45 million over three years to consumers, would remain in force until 1 January 2004.
The two companies have 45 days to appeal against the decision. Meanwhile objectors are also unhappy that the deal has been approved. They argued that it would harm the state rate payers, the economy and the environment.