Utility Merger May Yield 57 Acres Of Open Space For Newtown

By John Voket

About a decade ago, Newtown land use official Rob Sibley was carefully eyeing Connecticut’s move to deregulate electrical utilities, hoping at the time that Newtown might be able to acquire and preserve more than 50 acres of open space off Hanover Road that was owned by a subsidiary of Northeast Utilities.

This week, it appears Mr Sibley’s hope of acquiring the land, or at least seeing it preserved as pristine passive public recreational space, will become a reality.

On March 13, Governor Dannel P. Malloy, Attorney General George Jepsen, and Consumer Counsel Elin Swanson Katz announced an agreement with Northeast Utilities and Boston-based NSTAR that guarantees substantial benefits to Connecticut residents from the proposed merger of the two utility companies.

The agreement, reached after nearly a month of negotiations, provides at least $120 million in benefits to Connecticut in rate relief, investment in the state’s energy future, and preservation of 1,000 acres of open space.

Other benefits include a two-and-a-half-year distribution rate freeze; a commitment to keep NU headquarters in Hartford for at least seven years; protection of Connecticut jobs; the opportunity to preserve as much as 8,500 additional acres of open space; and a $300 million investment in infrastructure reliability improvements.

Newtown will be among four direct beneficiaries of the preservation component of the merger, if it is completed. According to the governor’s release, Northeast Utilities would transfer to an irrevocable preservation land trust four parcels valued at $20 million and comprising nearly 1,000 acres of open space, including approximately 57 acres at 75 Hanover Road.

The preservation piece of the merger also includes approximately 188 acres known as King’s Island in Enfield and Suffield, approximately 723 acres on Skiff Mountain in Sharon, and approximately 13 acres off Barlett Road in Waterford.

The land trust, according to state officials, would be administered by the utility.

In addition, NU will agree to extend until 2024 an open space land memorandum of understanding with Department of Energy and Environmental Protection (DEEP) concerning 375 parcels in 90 other municipalities encompassing 8,500 acres of land. Basically, the agreement gives the DEEP, the town in which a parcel is located, or a local land trust an option to buy open space land owned by NU when the company wishes to sell.

‘An Incredible Coup’

Mr Sibley, who is now Newtown’s deputy director of planning and land use, called the announcement an “incredible coup for Newtown,” and said he walks the parcel annually as part of his current duties inspecting the Iroquois Pipeline that also runs through the parcel.

“The majority of it is wetlands and uplands,” Mr Sibley said, adding that the parcel is the site of one of the biggest beaver dams he has ever seen.

Decades ago, part of the dryer portions of the parcel was used as grazing land for farm animals Mr Sibley said. And because of the diversity of its topography, it could only legally accommodate one building lot, which limits the retail value of the parcel for development to between $250,000 and $300,000.

Assessor Chris Kelsey said the parcel is designated as farm and forest land, and is assessed at only $7,320. First Selectman Pat Llodra said she was also thrilled to hear the news Wednesday.

The only other question left hanging was the discrepancy between the size of the Hanover Road parcel and the number of acres outlined in the governor’s announcement. If there is an additional two acres in question, it is possible that the town will also be receiving a second two-acre parcel in Hawleyville that Mr Sibley said would also be of significant value.

“If we were also getting that two acres in Hawleyville, it would go hand-in-hand with the revitalization of the village design district,” he explained.

The overall settlement agreement related to the NU/NSTAR merger has been filed with the state Public Utilities Regulatory Authority (PURA), where review of the proposed merger is now pending. Both the settlement agreement and proposed merger will need state regulatory approval on or before April 2, 2012, and the merger would have to be completed by the companies for the settlement to become binding.

“The agreement we’re announcing today does many things, but most importantly, it will ensure that distribution rates for our consumers will stay flat for two and a half years, providing some much needed relief for residents,” said Gov Malloy at a press conference detailing the agreement.

Attorney General Jepsen and Consumer Counsel Swanson Katz, who pushed PURA to review the proposed merger and helped to negotiate the agreement, were pleased by the result.

“Protecting Connecticut and the interests of its citizens were our first concerns,” Attorney General Jepsen said. “Like our neighbors in Massachusetts, we will know up front what this merger will mean for our state.”

Consumer Counsel Swanson Katz said, “Connecticut residents are entitled to share in the benefits of any merger and this agreement does that. They will see a rate credit on their bill and other benefits up front, and more down the road as the savings anticipated from the merger are realized.”

Merger Specifics Detailed

Among the provisions, the agreement provides direct cash benefits:

*$25 million in uniform rate credits to residential, commercial, and industrial customers of NU’s Connecticut Light & Power Co. subsidiary, to be applied in the first billing cycle after the merger is completed.

*Creation of a $15 million fund for energy efficiency and related initiatives. NU will work with DEEP to develop a targeted plan to advance Connecticut’s interests in expanded energy efficiency programs, including programs available to low-income residents and small businesses, electric vehicles, microgrids, renewable energy projects, and increasing the number of qualified minority contractors providing energy efficiency services. This investment will be paid solely by NU shareholders.

Distribution rate freeze until December 2014:

*No general increase in CL&P distribution rates prior to December 1, 2014.

*The first $40 million in storm-related costs associated with Tropical Storm Irene and the October 2011 snowstorm will be excluded from rates. Any additional expenses will be subject to regulatory review and if approved, recovered over a six-year period.

*$21 million in executive compensation will be excluded from rates.

*CL&P and Yankee Gas customers will bear none of the costs associated with the commitments made by the companies in Massachusetts, including the purchase of power from the Cape Wind project.

Corporate presence — for a period of at least seven years:

*NU will maintain a principal board and executive offices, functions, and staff in Hartford;

*NU will maintain the headquarters of CL&P, Yankee Gas Services Company, the transmission business, and NU Call Center operations in Connecticut;

*NU will maintain its charitable donations and civic commitments to Connecticut at levels consistent with the past five years.

Job preservation:

*The aggregate number of line workers in both Connecticut and Massachusetts will not be reduced.

*CL&P will work with local community colleges in Connecticut to develop a line worker apprenticeship program.

*Any reduction to other staff in Connecticut will be made “on a fair and equitable basis and will not be disproportionate to other jurisdictions” in which the merged company does business. The companies expect to make all reductions through normal attrition and not through layoffs.

System improvements:

*Commitment to invest $300 million — $100 million immediately — in improvements to the electric distribution system.

*Commitment to allocate resources for restoration efforts following major storms fairly among the various states where NU operates, based on operational needs, system requirements, and the relative number of outages. An updated plan of mutual aid will be filed with PURA by September 1, 2012.

*Commitment by CL&P and Yankee Gas to improve nonstorm and storm-related service quality improvements.