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4-Traders Homepage  >  Shares  >  Mercado Continuo Espanol  >  Iberdrola SA    IBE

Real-time Quote. Real-time Tradegate - 08/04 11:35:25 am
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UI, Iberdrola detail pitch for merger approval

08/03/2015 | 06:04pm US/Eastern

Aug. 03--NEW HAVEN -- UIL Holdings and Spanish energy giant Iberdrola are promising state regulators rate freezes for customers of United Illuminating and the two Connecticut natural gas utilities that the New Haven-based company owns and millions of dollars in customer credits and other incentives over time in return for approval of their $3 billion merger.

The proposed economic incentives, which the companies contend "are in the public interest" are contained in their new filing with the Connecticut Public Utilities Regulatory Authority.

The document was not made available to the New Haven Register until after the newspaper's press time Friday, the day UIL Holdings and Iberdrola made the filing with PURA seeking a change of control of UIL Holdings and its subsidiary companies.

Spokesmen for UIL Holdings and Iberdrola have declined comment on the filing, which came after the merger partners elected in early July to withdraw their original application for PURA to approve the merger. That action was prompted by PURA's decision at the end of June to tentatively deny approval of the merger.

Friday's filing represents a new application for PURA to consider regarding the merger, which the two companies had promised to deliver by the end of July,

The merger partners also promise to hire an additional 150 people in the three years after the merger closes.

UIL Holdings operates The United Illuminating Co., an electric power distribution company, as well as three natural gas utilities.

Southern Connecticut Gas and Connecticut Natural Gas are included in the economic incentives mentioned in the PURA filing, but UIL's Berkshire Gas is not. It is was not immediately clear what incentives the merger partners have offered to Massachusetts regulators in return for their approval.

If the merger were approved by PURA, UIL Holdings and Iberdrola would promise not to seek a rate increase from UI customers until Jan. 1, 2017. The companies would not seek a rate increase from SCG and CNG customers until Jan. 1, 2018 under the arrangement proposed by the merger partners.

Other promises made by the companies in the filing include:

--$20 million in rate credits for customers of the UIL subsidiaries within the first year after the closing of the merger.

--$26 million in rate credits for customers of the subsidiaries in the second full year after the merger,

--$6 million provided to the state Department of Energy and Environmental Protection over a three year period "to stimulate investment in clean energy."

--A commitment to double SCG's investment in replacing aging sections of utility's distribution network, with the amount being spent going from $11 million to $22 million over a three-year-period.

--Maintain UIL Holdings charitable giving levels at between $500,000 to $800,000 over at least the first four years following the closure of the merger.

The filing addresses, but is less specific, about a plan to clean up the mothballed English Station power plant that once belonged to UI.

The companies note they are "negotiating a consent order with respect to investigation and environmental remediation at English Station." The filing states that DEEP has estimated cost of the English Station clean up to be $30 million, but does not say how much of that amount the merger partners would agree to pay.

The defunct power plant, which is no longer owned by UI, sits on an island in the middle of the Mill River. The site is riddled with polychlorinated biphenyls, which are known carcinogen, heavy metals and other contaminants, the result of having a power plant operate there for 63 years before UI shut it down in 1992.

PURA's ruling in June made no mention of English Station.

Call Luther Turmelle at 203-680-9388.

___

(c)2015 the New Haven Register (New Haven, Conn.)

Visit the New Haven Register (New Haven, Conn.) at www.nhregister.com

Distributed by Tribune Content Agency, LLC.

© Tribune Content Agency, source Regional News

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