Will the Patrick administration hold hostage the proposed merger of NStar Corp. and Northeast Utilities until NStar agrees to buy the rest of Cape Wind’s power output?
Regulators have already approved the sale of half of Cape Wind’s electricity to National Grid, but the nation’s first offshore wind project hasn’t been able to find a buyer for the other half. NStar, which has 1.1 million gas and electric customers in Greater Boston, Worcester County, the South Shore, Cape Cod, and Martha’s Vineyard, has shown little interest in Cape Wind so far. But that may change as it seeks regulatory approval for its merger with Northeast Utilities, the parent company of Connecticut Light and Power, Connecticut’s Yankee Gas, Public Service of New Hampshire, and Western Massachusetts Electric.
Patrick administration officials are suggesting the proposed merger should be about more than corporate synergies. Ian Bowles, the former secretary of energy and environment, got the ball rolling in December in a speech in which he said utilities need to be held accountable in rate cases, mergers, and other state proceedings for their performance in relation to all public purposes, including the state’s clean energy goals. He said regulators should be asking utilities a number of hard questions, and one of those questions raised eyebrows.
“Will a merger help advance the development of the Commonwealth’s solar and offshore wind resources?” Bowles asked, emphasizing that he was speaking on behalf of the administration.
Several news outlets took Bowles’s comments to mean he was open to linking the merger and Cape Wind. Lisa Capone, a spokesman for the state’s energy and environmental affairs office, said Bowles was not suggesting NStar should buy Cape Wind power as a prerequisite for merger approval.
“The former secretary was not referring to any specific project or technology, but rather making a broader point about how all regulatory reviews should reflect the Commonwealth’s new direction toward clean energy,” she said in an email.
Early this month the Patrick administration’s Division of Energy Resources filed opening comments on the NStar-NU merger. Echoing Bowles, the agency said the Department of Public Utilities should review the merger not under the old regulatory standard of “no net harm,” but by a new standard of what benefits it would bring to the public.
“In assessing the public benefit, the department should consider a wide array of factors, including whether the merger will advance the Commonwealth’s clean energy goals,” DOER said in its testimony.
Dennis Duffy, vice president of Cape Wind, filed testimony lending his voice to the chorus. He took note of Bowles’s comments – particularly his comment about offshore wind resources – and urged the Department of Public Utilities to review the merger in light of the state’s energy goals.
NStar isn’t commenting at this point, but its renewable energy preference should become clear in the next few weeks. The utility solicited bids for green energy projects last year and company officials say renewable energy developers flooded them with proposals. The winning bidders are expected to be announced shortly and most analysts expect the power from these projects to be cheaper than the electricity from Cape Wind.
The DPU is in an awkward position. The NStar-NU merger proposal gives the DPU an opening to make one of the governor’s top energy priorities a reality, but such an approach runs the risk of being viewed as a heavy-handed attempt to pick one form of renewable energy over another. Evergreen Solar showed the risks associated with that kind of an approach.
The Alliance to Protect Nantucket Sound was set up to fight Cape Wind, so it’s hardly an unbiased source. But the alliance’s initial testimony on the NStar-NU alliance argues a merger review is not the right place to decide the fate of Cape Wind.
“It is essential that renewable resources be selected based on competition, not government fiat,” the Alliance said in its testimony. “Strong‐arm tactics that would dictate the selection of Cape Wind have no place in this proceeding and would greatly harm Massachusetts consumers.”

