Northeast Utilities’ Would-be Partner Fails Dismally in Green Energy Effort

NStar, the Massachusetts utility seeking to merge with Northeast Utilities, is failing in trying to get customers to buy power from so-called green sources. Producing green energy is a key provision in the merger talks and a requirement for approval. It’s not clear how the failing green effort will affect merger efforts. The merger efforts have been delayed after Massachusetts and then Connecticut regulators made storm response an element of the talks.

The Boston Globe reports that less than 1 percent of the million or so NStar customers enrolled in the green program. Not good. The main reason the green energy effort has failed is because right now, it’s more expensive than traditional sources. In some cases, to switch to a source of say, wind turbine power, would add 20 to 30 percent to the average bill. Not acceptable to the greenest of green customers.

All this puts NStar (and potentially Northeast Utilities) in a jam. It has several long-term contracts with green energy producers. But if the economy continues to falter and fossil fuel prices continue to be relatively stable, things don’t promising.