Iberdrola weighs PSC order by LARRY RULISON

The state Public Service Commission issued a 15-page order Tuesday officially approving Iberdrola SA's $4.5 billion acquisition of Energy East Corp.

Iberdrola now must decide if it wants to accept the requirements outlined in the order, which were approved last week by the PSC's four members. The Spanish utility has until Monday accept the terms unconditionally.

Energy East, based in Maine, is the parent company of New York State Electric & Gas and Rochester Gas & Electric. It has 1.7 million gas and electric accounts in upstate New York and owns other utilities throughout New England.

Iberdrola generally got what it wanted from the commission, which is allowing the company to own wind farms and hydro plants in New York despite a state policy that forbids electric utilities from owning their own power generation.

Iberdrola must sell Energy East's fossil-fuel plants in New York, and will be required to provide customers with $275 million in future benefits that will go to reduce rates.

And the PSC is requiring that Iberdrola invest at least $200 million in wind-farm projects across New York over the next two years.

An Iberdrola spokesman said the company did not have an immediate comment on the order. Last week, the company said it would have to examine the document first before making a decision.

In a story published Tuesday, Reuters quoted Iberdrola Chairman Sanchez Galan as saying the conditions "seem reasonable in principle, but an investment of this type requires conscientious study, and we've got to look at the small print."

A longer order with more narrative and rationale behind the decision will be issued by the commission at a later date.

PSC spokesman Jim Denn said the company can make its decision now based on the short order because it includes all of the "legally operative" conditions in detail.

Of note, Commissioner Maureen Harris, who supported the deal, wrote in an attachment to the order that she will address "specific concerns and issues" she has about the deal in a statement to be issued when the longer order is released.

During deliberations that spanned three separate meetings over three weeks, Harris had expressed dissatisfaction with various aspects of the deal. In the end she said she didn't want to risk having the company walk away from the deal if conditions were too stringent.

Shares of Energy East (NYSE: EAS) ended trading Tuesday at $28.22. On Monday, they hit a 52-week high of $28.35.