CITIZEN POWER ALLIANCE

Staff at the Public Service Commission now say Iberdrola could be permitted to own wind farms as part of its $4.5 million bid to buy Energy East Corp., provided each wind farm is approved by the state on a case-by-case basis.

PSC staff still opposes Iberdrola owning wind farms or any power plants in the state as a condition of the merger. But, they say, if the commission approves the deal, the Spanish energy conglomerate should have each wind power project reviewed individually, according to a June 26 brief filed on behalf of PSC staff.

The brief was in response to an administrative law judge's June 16 non-binding ruling that Iberdrola should not be permitted to build wind farms in the company's service territories.

It is unlikely the PSC's five commissioners will make a decision at their July 16 meeting. The deadline for all parties to respond to the June 26 filings is Thursday and their review will take senior staff analysts several weeks, PSC spokesman James Denn said.

It is also possible the parties could settle before the commission votes on the matter, Denn said.

The company says it will invest at least $2 billion in wind-power generation in the state if it is permitted to acquire Energy East. Should the merger be approved, PSC staff want measures in place that would require the company to follow through on its promise. The staff has concerns that there are no guarantees that the investments would occur, the filing stated. As Iberdrola builds the plants, the $201 million dedicated to customer benefits could be reduced.

Organizations have come out on both sides of the argument. The New York Consumer Protection Board and state Department of Environmental Conservation support the acquisition. Independent Power Producers of New York says Iberdrola, which is the second-largest wind energy operator in the country, should not be able to produce and provide power. The state prohibits "vertical market power," or the ability for power providers to also operate as power generators.

The bid is supported by key members of the state Legislature, as well as U.S. Senator Charles Schumer, D-NY, and Gov. David Paterson.