Blogs > Power to the People

Following energy issues in the state of Connecticut and beyond.

Wednesday, May 26, 2010

Will UI Play Let's Make a Deal?

Still hearing lots of chatter about UIL Holdings' $1.3 billion acquisition of Southern Connecticut Gas (SCG), Connecticut Natural Gas (CNG) and Berkshire Gas in Massachusetts.

It is a bold move in light of the current economy, especially considering the outcome of an attempt that UIL's United Illuminating Co. made about two decades ago to size up the natural gas market.

UI struck a deal with PanEnergy Corp. that gave the Texas-based natural gas marketer access to the New Haven-based company's customers, according to Al Carbone, a UI spokesman. Carbone said the deal didn't work out as UI officials had expected, although he wasn't able to explain how and when the arrangement between the two companies ended.

PanEnergy merged with North Carolina-based Duke Energy in 1997. UI and Duke Energy went into business together a year later, with the Connecticut company buying a 33-percent interest in the Bridgeport Energy power plant, a 520-megawatt generating plant.

UI sold its stake in Bridgeport Energy back to Duke Energy for $71 million in the first half of 2006.

There's no reason to believe that just because things didn't work out between UI and PanEnergy that the same thing will happen in this latest deal. But UI officials need to do a really good job selling this deal to Connecticut utility regulators.

To the average ratepayer, this deal is a story is about a comparatively small local utility getting a whole lot bigger. And bigger isn't always viewed as better by Connecticut folks; hardly a day goes by that I don't hear people wistfully talking about when SNET - Southern New England Telephone - was an independent company.

UI officials can counter with the argument that this deal take SCG and CNG out of the hands of Spanish energy giant Iberdrola and returns them to local ownership. And while there is a fair amount of political capital in that argument, UI needs to do more.

The company needs to go before the Connecticut Department of Public Utility Control and offer an arrangement in which it offers to declare some kind of moratorium period on rate hikes. Make an offer that the moratorium will not just be for the natural gas utilities, but for UI's core business of distributing electricity as well.

Such an offer might seem crazy. But don't dismiss it too quickly, because there is a precedent for such a move.

The DPUC mandated a rate freeze of at least five years for water customers in Ansonia, Derby and Seymour when the South Central Connecticut Regional Water Authority completed its acquisition of Birmingham Utilities in 2008. Would it make a similar request of UI?

That remains to be seen, but UI could get a lot of good will from customers, regulators and state lawmakers if it doesn't wait for the DPUC to make the first move. And while good will doesn't show up on a balance sheet, it never hurts to stockpile a little of it for when times get tough.
Just ask British Petroleum.










Tuesday, May 25, 2010

UIL Holdings in Blockbuster Energy Deal


The corporate parent of The United Illuminating Co. announced this morning that it is acquiring Connecticut's two largest natural gas utilities and a sister company from Massachusetts in a deal that amounts to $885 million.

UIL Holdings is actually paying the US affiliate of Spanish Energy giant Iberdrola almost $1.30 billion for Southern Connecticut Gas, Connecticut Natural Gas and Berkshire Gas. But as part of the terms of the deal, the final sale price will be $885 million because of $411 million in debt associated with the three Iberdrola companies.

The deal is expected to close in the first quarter of 2011. More details to come throughout the day.

Sunday, May 16, 2010

Use of Electric Cars Gets Boost From Israeli Initiative

Just wanted to share this interesting item I found on YouTube about Israel's effort to increase usage of electric cars by its citizens. Could something like this work in America, or does the size of our country (and the lack of infrastructure) make this impossible to pull off?

Tuesday, May 4, 2010

State Senate Passes Energy Bill



Just when you thought it was safe to believe that state lawmakers were going to squander another opportunity to make some alterations to Connecticut's energy policy, word comes out of Hartford tonight that the Senate voted 20-14 to pass a bill that might do just that.

The bill now moves to the House of Representatives, who have until the end of tomorrow's session to either act upon the energy bill or let it die without a vote.

What isn't clear coming out of the vote late Tuesday night is how much of the bill that State Senator John Fonfara, D-Hartford, and Vickie Nardello, D-Prospect, crafted remains intact.

A e-mail sent out to the media from the Connecticut Fund for the Environment (CFE) shortly before 11 p.m. makes no mention of some of the key elements of the Fonfara-Nardello bill, like the creation of a Connecticut Energy and Technology Authority that would replace the Department of Public Utility Control or a reduction of consumers electric bills by 15 percent.

Instead, CFE Staff Attorney Charles Rothenberger (shown above) focuses his comments on new energy efficiency standards and a program that would provide consumers to take out low-interest loans to make their home more energy efficient. Does that mean that significant changes were made to the Fonfara-Nardello bill in order to gain passage from the Senate?

We'll find out more on Wednesday as the General Assembly's 2010 session enters its final hours.






Monday, May 3, 2010

State is Highly Ranked By Fuel Cell Industry Group


A Washington, D.C.-based non-profit outreach group has released a report that ranks Connecticut second in the entire country when comes to being top places for fuel cell companies to do business.


The study released by Fuel Cells 2000 ranks New York, Ohio and South Carolina behind California and Connecticut in its selection of the top five states. The organization looked at how supportive each state is in terms of policies regarding fuel cells and hydrogen and also looked at how many of the renewable energy devices are installed there.

"They all (the states that were top ranked) recognize that establishing a fuel cell-friendly climate brings environmental benefits and jobs to their state,” said Jennifer Gangi, program director, Fuel Cells 2000.

Connecticut received its high ranking because the state has high profile installations of the devices, offers substantial financial support for fuel cell power generation systems and is the headquarters for several major fuel cell manufacturers, Gangi said.

To see the full report and methodology behind the rankings, go to http://www.fuelcells.org/statereport.html