Seder & Chandler, LLP
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Massachusetts utility regulatory approval still needed

Neighboring Connecticut utility regulators have approved the $5 billion acquisition of Boston's NStar by Northeast Utilities. Once approval is garnered from the Massachusetts Public Utilities Regulatory Authority, the merger would create the largest New England utility owner and provider, serving nearly 4 million electric and gas customers in 632 communities.

The plan has been in the works since October of 2010 and the company expected the purchase to be completed by mid-April. The company has asked the Massachusetts officials to review the plan by tomorrow. Perhaps under stress while awaiting regulatory approval, stocks of both companies fell 0.2 percent recently.

Connecticut officials cited the company's planned rate cuts, credits and freeze as a good deal for both state's consumers. Every state has some sort of utility board that regulates essential services like water and energy. They oversee federal, state and local utility providers, ensuring that they are providing available and affordable utilities to everyone.

When dealing not only with stockholders and customers in a merger or acquisition, but government regulators in a business deal, stakes are high. Mistakes cannot be made. The more complex the business sale, the more intricate the financing, taxes, disclosure and indemnification. Every possible future contingency cannot possibly be predicted, especially in the pricing and availability of public utilities. In fact, part of the argument for the merger includes access to Cape Wind's clean energy target and climate change goals. A diversified portfolio can help strengthen companies with a breadth of service levels, costs and resources.

Source: The Boston Globe, "NStar-NU deal closer to completion," April 3, 2012

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