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Iberdrola wins in New York
1 October 2008
Spanish energy giant Iberdrola can make a big step into New York while still holding on to its wind projects. After more than a year in limbo, Iberdrola was granted permission by regulators to move forward with its $4.5 billion deal to acquire Energy East, which owns power companies that deliver gas and electricity to three million customers in New York and four other Northeast US states. The final hurdle, approval from New York's Public Service Commission (PSC), was granted last month after Iberdrola set aside $275 million to offset future ratepayer increases and agreed to sell fossil-fuel power plants Energy East owns in New York's deregulated market. While state policy does not allow companies to own both transmission lines and generating plants, the PSC allowed Iberdrola to keep plants powered by wind and water. Iberdrola had threatened to pull out of the deal rather than relinquish its New York wind farms (Windpower Monthly, June 2008). As part of a compromise, the PSC will require Iberdrola to spend at least $200 million on wind plant development in New York. Iberdrola's US wind development subsidiary, Iberdrola Renewables, owns 50% of the 300 MW Maple Ridge Wind Farm in New York's Lewis County. It has plans for at least ten new projects in New York. While the transaction received wide support from business interests and public officials, opponents believe Iberdrola could exert considerable influence over power prices in the region due to the diversity of its holdings. Regulators in the four other states had long since approved of the deal.
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