Sen. Charles E. Schumer on Thursday called on Spanish energy company Iberdrola S.A. to protect 1.5 million Upstate New York ratepayers from spiking energy bills and poor service when it buys the parent of New York State Electric & Gas.
Madrid-based Iberdrola, a global energy provider, agreed last June to pay $8.6 billion in cash to buy Portland, Maine-based Energy East Corp., the parent of NYSEG, which serves suburban and rural portions of Western New York. Energy East also owns Rochester Gas & Electric, and several New England utilities.
The proposal has been approved by federal officials but is still pending before the state Public Service Commission, which is negotiating a settlement with Iberdrola that can still be rejected or altered by the PSC. If approved, the purchase, coming seven years after British utility National Grid PLC bought Niagara Mohawk in 2001, means most customers in Western New York will get their power from a European-owned company.
But that earlier merger has had its problems. Schumer said Niagara Mohawk customers have experienced rate increases and “unpredictable service” since the merger, and said he wants to avoid another “National Grid debacle.” He noted that Iberdrola is paying significantly more than Energy East’s market value, but has offered few guarantees to benefit customers.
The New York Democrat urged Iberdrola to set up a trust fund — formally known as a regulatory deferral account — to offset rate increases in coming years so current customers of RG&E and Binghamton- based NYSEG don’t face higher monthly utility bills.
He also asked the Spanish company to agree to a “performance assurance plan” that would impose penalties if service quality deteriorates after the merger.
Both requests were included in a letter to the PSC, which also encouraged the agency not to prevent Iberdrola from developing further sources of renewable energy.
The deal would create an energy giant with operations in 14 coun - tries, and would give Iberdrola a strong position from which to expand in the United States.
jepstein@buffnews.com
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Friday, February 29, 2008
Schumer wants conditions on Energy East buyout by Claudia Vargas
(February 29, 2008) — While Iberdrola SA continues to negotiate with the state Public Service Commission on the purchase of Energy East Corp., Sen. Charles Schumer is recommending a specific plan for Iberdrola to adopt if the deal goes through.
The New York Democrat said Thursday that takeovers of utilities can often benefit shareholders but hurt ratepayers.
His concern echoed what was said at a PSC public hearing in Rochester last week, when many speakers said they already were pinched by high costs of electricity and natural gas.
Energy East is the parent of Rochester Gas and Electric and New York State Electric and Gas. Iberdrola, based in Bilbao, Spain, has an agreement to acquire Energy East for $4.5 billion but still needs PSC approval.
Schumer said he doesn't want the Iberdrola takeover to have a negative effect on rates and service, which is what he said happened after National Grid of Britain acquired Niagara Mohawk in 2001.
"Their fear comes with good reason," Schumer said about ratepayers' concerns. "National Grid is history we do not want to repeat ... soaring bills and lousy service."
Schumer proposed that Iberdrola set up a trust fund of at least $1 billion that could be tapped to offset rate increases and keep monthly utility bills as low as possible.
He also said he wants Iberdrola to set up a performance assurance plan, which would provide for fines for any service failures.
Additionally, he said he wants the PSC to require that Iberdrola be aggressive with alternative energy development in upstate, especially wind energy, which is a forte of the Spanish company.
Finally, Schumer said he wants Iberdrola to repower RG&E's Russell power plant in Greece as a natural gas facility, rather than coal, a commitment RG&E already has made.
"The PSC must make them, literally, put their money where their mouth is," Schumer said of Iberdrola, adding that he intends to put "a lot of pressure" on the PSC to adopt his recommendations in its current negotiations with the company. Schumer said he sent a formal letter to the PSC outlining his recommendations.
James Denn, a PSC spokesman, said Schumer's letter will be "closely reviewed and considered as proceedings continue. In any public proceeding, any letters that are received are given careful consideration."
CLVARGAS@DemocratandChronicle.com
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The New York Democrat said Thursday that takeovers of utilities can often benefit shareholders but hurt ratepayers.
His concern echoed what was said at a PSC public hearing in Rochester last week, when many speakers said they already were pinched by high costs of electricity and natural gas.
Energy East is the parent of Rochester Gas and Electric and New York State Electric and Gas. Iberdrola, based in Bilbao, Spain, has an agreement to acquire Energy East for $4.5 billion but still needs PSC approval.
Schumer said he doesn't want the Iberdrola takeover to have a negative effect on rates and service, which is what he said happened after National Grid of Britain acquired Niagara Mohawk in 2001.
"Their fear comes with good reason," Schumer said about ratepayers' concerns. "National Grid is history we do not want to repeat ... soaring bills and lousy service."
Schumer proposed that Iberdrola set up a trust fund of at least $1 billion that could be tapped to offset rate increases and keep monthly utility bills as low as possible.
He also said he wants Iberdrola to set up a performance assurance plan, which would provide for fines for any service failures.
Additionally, he said he wants the PSC to require that Iberdrola be aggressive with alternative energy development in upstate, especially wind energy, which is a forte of the Spanish company.
Finally, Schumer said he wants Iberdrola to repower RG&E's Russell power plant in Greece as a natural gas facility, rather than coal, a commitment RG&E already has made.
"The PSC must make them, literally, put their money where their mouth is," Schumer said of Iberdrola, adding that he intends to put "a lot of pressure" on the PSC to adopt his recommendations in its current negotiations with the company. Schumer said he sent a formal letter to the PSC outlining his recommendations.
James Denn, a PSC spokesman, said Schumer's letter will be "closely reviewed and considered as proceedings continue. In any public proceeding, any letters that are received are given careful consideration."
CLVARGAS@DemocratandChronicle.com
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Tuesday, February 26, 2008
PSC Allows You to Weigh in on Iberdrola.
The New York State Public Service Commission (PSC) seeks public comment on whether Iberdrola S.A. should acquire Energy East, the parent company of New York State electric & Gas (NYSEG) and Rochester Gas & Electric Corporation (RG&E)
Iberdrola is the owner of the proposed Jordanville wind farm. Perhaps the best argument against Iberdrola's proposed acquisition, is the PSC's own reluctance to allow a single company to own both the means of generation (Jordanville) and transmission of electricity. The reason, of course, is fear of monopoly control. A further cause of concern is the fact that NYMO is already owned by National Grid, a foreign-owned corporation. If Iberdrola acquires NYSEG, much of NYS's transmission capacity will be owned by foreign interests. If this is further complicated by foreign ownership of generating capacity, as well, we would have legitimate concern over to what degree the interests of these corporations will correspond to the interest of NYS consumers. We should also ask to what degree these corporations will be answerable for their policies if they should not correspond to local needs?
Interestingly, comment already received - largely from public agencies, private corporations and public interest groups - is divided as to whether the proposal will encourage or discourage wind energy development.
The PSC itself states "it would discourage wind energy investments unless the PSC bars the companies from owning generating plants in New York…"
So the question might be why does Iberdrola want to own both generating and transmission capacity?
HOW YOU CAN WEIGH IN
Writing: Jaclyn A. Brilling, Secretary, Public Service Commission, 3 Empire State Plaza, Albany, NY 12223-1350. Refer to Case 07-M-0906-Iberdroler Merger.
Toll-Free: Opinion Line at 1-800-335-2120.
Internet: Via the "PSC Comment Form, in the "Consumer Assistance" file accessed through the website: www.dps.state.ny.us.
DEADLINE for all comments is March 31, 2008.
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Iberdrola is the owner of the proposed Jordanville wind farm. Perhaps the best argument against Iberdrola's proposed acquisition, is the PSC's own reluctance to allow a single company to own both the means of generation (Jordanville) and transmission of electricity. The reason, of course, is fear of monopoly control. A further cause of concern is the fact that NYMO is already owned by National Grid, a foreign-owned corporation. If Iberdrola acquires NYSEG, much of NYS's transmission capacity will be owned by foreign interests. If this is further complicated by foreign ownership of generating capacity, as well, we would have legitimate concern over to what degree the interests of these corporations will correspond to the interest of NYS consumers. We should also ask to what degree these corporations will be answerable for their policies if they should not correspond to local needs?
Interestingly, comment already received - largely from public agencies, private corporations and public interest groups - is divided as to whether the proposal will encourage or discourage wind energy development.
The PSC itself states "it would discourage wind energy investments unless the PSC bars the companies from owning generating plants in New York…"
So the question might be why does Iberdrola want to own both generating and transmission capacity?
HOW YOU CAN WEIGH IN
Writing: Jaclyn A. Brilling, Secretary, Public Service Commission, 3 Empire State Plaza, Albany, NY 12223-1350. Refer to Case 07-M-0906-Iberdroler Merger.
Toll-Free: Opinion Line at 1-800-335-2120.
Internet: Via the "PSC Comment Form, in the "Consumer Assistance" file accessed through the website: www.dps.state.ny.us.
DEADLINE for all comments is March 31, 2008.
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Tuesday, February 19, 2008
PSC to hear comments on Energy East-Iberdrola merger tonight
Public Service Commission representatives are soliciting comments on Iberdrola's proposed acquisition of Energy East Corp., the parent of New York State Electric & Gas Corp. and Rochester Gas and Electric.
The Binghamton session is scheduled for 7 p.m. today at the community room of the State Office Building, 44, Hawley St.
While both Iberdrola and Energy East are saying the merger could have major customer benefits, the state regulatory agency is questioning that assessment. Public Service Commission staff said that the merger would not, without modification, benefit customers.
Commission staff also question whether the merger would, as the companies claim, enhance renewable energy investments in the state. It has been commission policy that electric distribution companies divorce themselves from generation, and the proposed merger would mean that both NYSEG and RGE would control more electric generation capacity.
The commission is also asking that additional measures be put in place to protect electric customers from the financial risks of Iberdrola's other businesses.
Regulators in other states where Energy East has operations have already approved the merger. Federal agencies have also signed off on the merger.
Another sticking point in the approval process has developed over the past three weeks. Iberdrola could itself be the subject of acquisition in the coming weeks or months, and New York regulators want to hold off review of the Energy East deal until it knows the final fate of Iberdrola.
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The Binghamton session is scheduled for 7 p.m. today at the community room of the State Office Building, 44, Hawley St.
While both Iberdrola and Energy East are saying the merger could have major customer benefits, the state regulatory agency is questioning that assessment. Public Service Commission staff said that the merger would not, without modification, benefit customers.
Commission staff also question whether the merger would, as the companies claim, enhance renewable energy investments in the state. It has been commission policy that electric distribution companies divorce themselves from generation, and the proposed merger would mean that both NYSEG and RGE would control more electric generation capacity.
The commission is also asking that additional measures be put in place to protect electric customers from the financial risks of Iberdrola's other businesses.
Regulators in other states where Energy East has operations have already approved the merger. Federal agencies have also signed off on the merger.
Another sticking point in the approval process has developed over the past three weeks. Iberdrola could itself be the subject of acquisition in the coming weeks or months, and New York regulators want to hold off review of the Energy East deal until it knows the final fate of Iberdrola.
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Public hearings on proposed energy buyout
BINGHAMTON, N.Y. -- The public will have the chance to comment on the proposed acquisition of NYSEG by a Spanish company.
The New York State Public Service Commission is holding hearings in Binghamton and Ithaca on whether to approve Iberdrola's proposal to acquire Energy East Corporation. That's the parent company of NYSEG and Rochester Gas and Electric.
Tuesday's hearing is at 7 pm in the community room of the Binghamton State Office Building. Wednesday's hearing is scheduled for 1 pm in the Ithaca Town Hall.
If you can't make either hearing, you can comment over the phone by calling 1-800-335-2120.
You can also submit comments on the Public Service Commission's website at http://www.dps.state.ny.us.
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The New York State Public Service Commission is holding hearings in Binghamton and Ithaca on whether to approve Iberdrola's proposal to acquire Energy East Corporation. That's the parent company of NYSEG and Rochester Gas and Electric.
Tuesday's hearing is at 7 pm in the community room of the Binghamton State Office Building. Wednesday's hearing is scheduled for 1 pm in the Ithaca Town Hall.
If you can't make either hearing, you can comment over the phone by calling 1-800-335-2120.
You can also submit comments on the Public Service Commission's website at http://www.dps.state.ny.us.
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Utility aims to ride new breeze by LARRY RULISON
ALBANY -- Iberdrola SA, the Spanish utility seeking to acquire Energy East Corp. for $4.5 billion, is the largest wind power developer in the world.
And that has been one of the company's biggest selling points as it seeks approval from the state Public Service Commission to acquire Energy East, which has more than 1 million customers in New York, including about 45,000 in the Capital Region through its New York State Electric & Gas subsidiary.
In filings made with the PSC, Iberdrola has argued that the merger would help New York "further the state's renewable energy goals," including its ambitious Renewable Portfolio Standard, which calls for 25 percent of the state's electricity to come from renewable sources by 2013.
Wind farms are expected to play a big part in helping the state reach that goal. There are roughly 400 megawatts of wind power generation capacity in the state right now, with about 1,000 megawatts expected to be operational by the end of the year.
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And that has been one of the company's biggest selling points as it seeks approval from the state Public Service Commission to acquire Energy East, which has more than 1 million customers in New York, including about 45,000 in the Capital Region through its New York State Electric & Gas subsidiary.
In filings made with the PSC, Iberdrola has argued that the merger would help New York "further the state's renewable energy goals," including its ambitious Renewable Portfolio Standard, which calls for 25 percent of the state's electricity to come from renewable sources by 2013.
Wind farms are expected to play a big part in helping the state reach that goal. There are roughly 400 megawatts of wind power generation capacity in the state right now, with about 1,000 megawatts expected to be operational by the end of the year.
(Click to read entire article)
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Sunday, February 17, 2008
Iberdrola fined 15 mln eur by Spain antitrust body
MADRID, Feb. 15, 2008 (Thomson Financial delivered by Newstex) -- Iberdrola SA (OOTC:IBDSF) (OOTC:IBDRY) has been fined 15.4 mln eur by the Comision Nacional de la Competencia (CNC) for abusing its dominant position in the electricity generation market, the antitrust body said.
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