The New Mexico Public Utility Commission has authorized, subject to a series of conditions, the proposed merger of Southwestern Public Service Co. with Public Service Company of Colorado, and their reorganization and formation of a public utility holding company, New Century Energies Inc.
Both companies had argued that the merger would allow them to "efficiently and effectively function in a competitive electric utility industry marketplace." Southwestern estimated the merger will cost approximately $43 million, but will produce $770 million in expense savings for both companies in the first 10 years.
Approval of the merger is subject to several conditions. First, Southwestern has to guarantee an automatic minimum annual credit for its New Mexico customers based on projected merger-related savings for the first 60 months after the merger closes. Second, merger costs will be split between shareholders and ratepayers. Third, negative impacts of the merger will not affect customers. Fourth, Southwestern and all affiliated interests agree to waive the right to claim federal preemption as a basis for challenging the commission's disallowance of costs or expenses. And finally, Southwestern will have an ownership interest in the direct transmission interconnection with Public Service Company of Colorado contemplated as part of the merger. Re Southwestern Pub. Service Co., Case No. 2678, Jan. 28, 1997 (N.M.P.U.C.).
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