CMP parent to sell plants for $1.4 billion Maine power grid upgrade

Posted May 25, 2010, at 1:25 p.m.

PORTLAND, Maine — The parent company of Central Maine Power is selling three natural gas utilities in New England to help pay for a $1.4 billion power grid upgrade in Maine.

Utility company UIL Holdings said Tuesday that it will buy Southern Connecticut Gas Co., Connecticut Natural Gas Corp. and the Berkshire Gas Co. of Massachusetts from Iberdrola USA for $885 million.

Iberdrola USA, a subsidiary of the Spanish energy company, says the deal will help fund power grid improvements in Maine, where CMP plans to double the capacity of the grid with a new 345,000-volt transmission line from Orrington to Eliot.

Iberdrola will fund the improvements, about half with cash, and half through borrowing. The money will be recouped from New England ratepayers.

“The investment will serve to continue guaranteeing electricity network reliability for customers in Maine and the New England region, providing it with the necessary capacity to incorporate new renewable energy sources,” said Michael McClain, who’s overseeing the project for Iberdrola.

Besides ensuring reliability, the improvements will provide a conduit for wind farms to get electricity to power-hungry southern New England. One spur will take a high-voltage line to Rumford, bringing the grid closer to proposed wind farms in western Maine, said John Carroll, a CMP spokesman in Augusta.

A companion project would have connected northern Maine to the regional power grid for the first time, but that $625 million project was put aside.

Iberdrola said the decision to sell the three natural-gas utilities to UIL Holdings, parent of Connecticut’s United Illuminating Co., falls within its plan of selling non-strategic assets.

The three utilities have 369,000 customers in Connecticut and Massachusetts. They have a combined workforce of about 800. UIL intends to issue debt and equity to fund the cash portion of the purchase price; the deal is expected to close by early next year.

As for the power grid improvements in Maine, the Maine Public Utilities Commission gave its approval this month, and a final order is due by the end of June.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in State