Around the Region

State may raise bar in utility merger

By Erin Ailworth
Globe Staff / February 17, 2011

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The Massachusetts Department of Public Utilities has suspended hearings on a proposed merger between NStar and Northeast Utilities while it determines whether to raise its standard of approval and require the partnership to help advance the state’s goals for alternative energy.

Last month, the state Department of Energy Resources asked the public utility agency to change its review standard, which currently requires that mergers cause “no net harm’’ to customers.

Instead, state energy officials said, the combination of the two utilities should result in a “substantial net benefit.’’

They want that to include the reduction of greenhouse gas emissions by increasing the use of renewable energy in the state.

Utility regulators had laid out a schedule for hearings extending into late May. But in a memo this week, they said they would suspend the hearings, pending a decision on the department’s standard of review.

NStar, based in Boston, and Northeast Utilities of Hartford unveiled the proposed merger in October, saying a consolidation would create a $17.5 billion company better able to bargain for cheaper supplies of energy.

Massachusetts has several alternative energy goals, including one that would require utilities to provide 15 percent of the electricity from renewable sources by 2020.