Cape Wind Deal: Savings for Central Mass

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Thursday, February 16, 2012

Meghan Ottolini, GoLocalWorcester Contributor

Boston-based NSTAR and New England conglomerate Northeast Utilities will buy 27.5% of Cape Wind, Governor Deval Patrick announced Tuesday. But what does off-shore wind energy mean for Central Mass? Potential savings.

Big step towards end deal

NSTAR and Northeast Utilities have been waiting on approval from the Massachusetts Department of Utilities for a merger that would make them the largest utilities company in New England. According to Northeast Utilities, the merger has been approved by shareholders of both companies and has met all federal regulatory conditions.

NSTAR currently serves 1.4 million customers statewide. The company provides gas utilities to Central Mass communities from Uxbridge to Westborough.

The Cape Wind buy is the latest breakthrough in the merger, and will hold electricity rates across the region steady for at least 4 years. It brings the companies and the state 1 giant step closer to an agreement that everyone involved said will result in customer savings.

“The merger will benefit all of our customers by creating a stronger company that stays headquartered in New England and is expected to provide higher service levels and lower costst over the long term,” NU Chairman, President, and CEO Charles W. Shivery said in a statement.

According to a January filing by the Massachusetts Department of Public Utilities, the merger could save customers $780 million over a 10-year period.

“I would say that’s a reasonable number, for the size of those companies,” said Worcester Chamber of Commerce President, Dick Kennedy.

Cape Wind said although the energy will be supplied to the state’s eastern region, the savings will be widespread.

“While future fuel prices are uncertain, the Massachusetts Department of Public Utilities has determined that Cape Wind provides a unique set of benefits for Massachusetts and is cost-effective and will place downward pressure on wholesale energy prices while avoiding the external costs of burning fossil fuels,” said Jim Gordon, President of Cape Wind to GoLocalWorcester.com.

Questions of layoffs

Northeast Utilities has stated that their savings estimate stems from “elimination of duplicative operations over time” in corporate and administrative areas, and a reduction of approximately 350 position during the first 5 years.

“No broad-band, corporate-wide layoffs or early retirements are planned and all union contracts will continue to be honored,” the company state in a press release.

NSTAR currently employs more than 3,000 people across the state.

“I think certainly layoffs are a concern,” said Kennedy. “As with any merger, only time will tell.”

The State Department of Public Utilities is waiting on Connecticut regulators to rule on the merger in April, before making their own ruling.

“We are excited to move forward,” said Gordon. 

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