When Spanish utility giant Iberdrola announced last June that it would acquire Maine-based Energy East for $4.5 billion, it signaled a potential surge in major foreign owners buying into U.S. utility companies.
The deal seemed to be moving smoothly, garnering approvals from Energy East shareholders as well as federal and state regulators. But then the staff of the New York Public Service Commission (PSC) indicated they might require more from Iberdrola before approving the acquisition. The main sticking point: The potential for Iberdrola to dominate the windpower industry in New York.
Specifically the PSC staff said Iberdrola would need to divest its 50 percent interest in the Maple Ridge wind farm, New York’s largest, with 195 turbines totaling 320 MW of windpower capacity.
A global leader in windpower development, Iberdrola hopes to build at least 10 new wind farms in the state. Iberdrola agreed to sell Energy East’s fossil-fueled power plants in New York to appease the commission’s market-power concerns, but the company is standing firm on its windpower position.
Fortnightly spoke with Pedro Azagra, director of corporate development for Iberdrola S.A. in Bilbao, Spain, to get an update on the acquisition, and his impression of U.S. merger-approval processes.
Fortnightly: What’s the status of your plans to acquire Energy East?