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Con Ed and Northeast Utilities Take Merger to Court

BERLIN, CT-While Northeast Utilities has vowed to take Consolidated Edison to court over alleged failures to live up to their proposed merger deal, Con Ed filed papers in federal court to void the $7.7 billion merger agreement.

By John Jordan | Updated on March 07, 2001

BERLIN, CT-The two utility companies involved in what was to be a $7.7 billion merger deal are more likely to meet in a court room rather than at the office coffee machine in the future. Consolidated Edison announced that it filed suit in US District Court for the Southern District of New York on Tuesday, March 6 seeking a declamatory judgment “that Northeast Utilities has failed to satisfy conditions precedent under the merger agreement.”

In its statement, the company cited a SEC filing by Northeast Utilities concerning power supply issues with its retail unit Select Energy. According to published reports, Northeast told the SEC its earnings may suffer if it is forced to purchase power in relation to a contract Select has to supply 2,000 megawatts of power to Northeast subsidiary Connecticut Light & Power. Northeast is seeking to sell its largest power generation facility — the Millstone nuclear power plant — to Dominion Resources for $1.3 billion.

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