Connecticut announced an agreement settlement Tuesday, spelling out the terms of the state's approval of Northeast Utilities purchase of Boston-based NStar.
The deal provides at least $120 million in benefits in rate relief to Connecticut, including $25 million in uniform rate credits to residential, commercial and industrial customers of NU's subsidiary, Connecticut Light & Power, according to Gov. Dannel Malloy. The credits would be applied in the first billing cycle after the merger is completed.
Other terms of the agreement include a rate freeze through Dec. 1, 2014, a $300 million investment by the company in infrastructure improvements and a commitment to keep NU headquarters in Connecticut for at least seven years.
"After everything our residents have been through over the past year, weathering storms and enduring long outages of utility service, we knew that we had a tremendous opportunity to negotiate an agreement that would really benefit the people of Connecticut," Malloy said. "The agreement we're announcing today does many things, but most importantly, it will ensure that distribution rates for our consumers will stay flat for two and a half years, providing some much needed relief for residents."
Attorney General George Jepsen earlier this year asked utility regulators to review the deal because of concerns about an NSTAR executive from an out-of-state headquarters leading NU and a board of directors and trustees that has as many NSTAR-controlled seats as they do NU seats.
"Protecting Connecticut and the interests of its citizens were our first concerns," Jepsen said. "Like our neighbors in Massachusetts, we will know up front what this merger will mean for our state."
The Public Utilities Regulatory Authority (PURA) ruled in January that the deal to buy NStar needed authority approval to move forward because NStar shareholders would own about 44 percent of the Hartford-based Northeast Utilities.
"The agreement will provide constructive and tangible benefits for Connecticut customers and communities," said Charles Shivery, President and CEO of Northeast Utilities.
A provision of the deal promises to preserve 1,000 acres of open space.
The agreement must be approved by the Connecticut PURA. The two utilities have requested the agency's approval by April 2.