CITIZEN POWER ALLIANCE

Spanish utility Iberdrola SA will be allowed to purchase Energy East Corp., the New York State Public Service Commission determined today.

The 4-0 vote by the PSC’s board ended a year-long process involving Iberdrola’s $4.5 billion proposal to take over Energy East (NYS: EAS).

“The approval requires Iberdrola to pay $275 million in customer benefits to offset future rate hikes. Iberdrola must invest $200 million in new wind energy projects. Initially, Iberdrola said it would invest $100 million. If Iberdrola does not invest the additional $100 million it faces a penalty.

“This isn’t a perfect deal,” said Commissioner Maureen Harris. “It may not even be a great deal. But in my opinion it’s a good deal. I’m not comfortable gambling that the company might walk away.” She said it was in the best interest of consumers to approve the deal. Any stricter provisions could have deterred Iberdrola from moving forward with the merger.

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