CITIZEN POWER ALLIANCE

Spanish utility Iberdrola SA would be allowed to own and build wind farms anywhere in New York as part of its $4.5 billion acquisition of Energy East Corp. under a proposal unveiled Wednesday before the state Public Service Commission.

Concerns over Iberdrola's ability to manipulate the state's wholesale electric market by owning both transmission and distribution lines and wind generation were "milder" than previous cases that have come before the agency, senior advisory staff told the five PSC commissioners.

The PSC regulates electric utilities in the state and has used its power for the past 10 years to oversee a policy that prohibits utilities from owning generation plants. The policy is designed to ensure that utilities do not use two types of assets to drive up electricity prices in what is known as vertical market power.

Exceptions can be made to the policy, and senior staff suggested Wednesday a number of conditions that the PSC adopt as part of the merger so Iberdrola cannot manipulate pricing.

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