The Maine Public Utilities Commission (PUC) on Tuesday voted 2-1 to allow Central Maine Power Co. to bypass state review of a $2.5 billion deal that puts its parent company, Avangrid Inc., under the full control of a Spanish energy titan.
The Bilbao, Spain-based Iberdrola S.A. deal will make Avangrid a privately held company that is exempt from filing financial and operational details with the U.S. Securities and Exchange Commission.
“We appreciate the Maine Public Utilities Commission’s thoughtful and transparent review of our petition,” said Pedro Azagra, Avangrid’s Chief Executive Officer. “As part of the Iberdrola Group, we are committed to continuing the advancement of our sustainability and clean energy goals, and ensuring the well-being of our customers in Maine and across the country.”
In waiving state review of the deal, Maine regulators followed recent action by the U.S. Federal Energy Regulatory Commission approving Iberdrola S.A.’s acquisition of the remaining 18.4 percent of the issued and outstanding shares of common stock of Avangrid that it does not currently own.
Tuesday’s vote at the Maine PUC also comes after Institutional Shareholder Services and Glass Lewis both recommended that Avangrid shareholders vote “FOR” the adoption of the merger with Iberdrola.
In Maine, this transaction will simply revert to Iberdrola’s previously authorized 100 percent interest it held following its acquisition of Avangrid’s predecessor in 2008. The Maine PUC’s final written order providing for the exemption is expected to follow.
In considering Avangrid’s request for exemption, commissioners and PUC staff said they “relied heavily” on facts contained in Iberdrola’s 2008 reorganization case, which they described as “thoroughly litigated.”
The 2008 transaction included a 15-page stipulation signed by nine parties, including the Office of the Public Advocate, that contained 59 conditions designed to protect Maine utilities and ratepayers.
“This is a rare case in which the commission has previously approved the very same corporate organizational structure that the petitioners now propose. That case was thoroughly litigated and resulted in the commission’s approval of a stipulation that contained 59 numbered conditions of approval,” according to the Examiner’s Report published by Maine PUC staff on Aug. 26.
“The stipulation was joined by nine parties (as well as CMP, MNG, and Iberdrola, S.A.),” the report says. “Importantly, those conditions include both extensive reporting requirements and “ringfencing” conditions designed to protect the Maine utilities from the impact of financial harm that may be experienced by affiliates.”
The transaction is expected to close in this year’s fourth quarter, subject to other closing conditions, including approval by both the New York Public Service Commission and Avangrid shareholders.
In addition to Central Maine Power Co., Avangrid also operates natural gas delivery companies in Connecticut and Massachusetts, an electric utility in Connecticut, and two electric and gas companies in New York.
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