A Massachusetts utility company has begun talks aimed at taking over troubled Public Service Co. of New Hampshire, but not its 36% share of the stalled Seabrook nuclear plant, officials said Tuesday.
Public Service, the lead Seabrook owner, sought federal bankruptcy protection last month. The proposed takeover by New England Electric System, based in Westborough, Mass., would require approval by a bankruptcy judge, state regulators in Massachusetts and New Hampshire, both companies' directors and possibly some federal agencies.
Public Service, New Hampshire's largest power company, would be left only with its share of the $5.2-billion reactor, which is completed but has been unable to surmount evacuation-planning obstacles to an operating license.
New England Electric subsidiary New England Power Co. owns 10% of Seabrook. Officials of the parent company would not comment on why they don't want to increase their share of the controversial plant.
Samuel Huntington, president of the parent company, said in a statement that the takeover would let the new Public Service pay its share of the costs of keeping Seabrook ready while plant owners keep fighting for an operating license. Huntington did not explain how that would happen.
Would Support Seabrook
A spokesman for Seabrook's joint owners, David Scanzoni, said, "It would be likely that there would be some kind of cash infusion that would be part of the arrangement" to let the new Public Service maintain its share of Seabrook carrying costs, estimated at $3 million to $4 million a month.
Scanzoni said New England Electric would want to continue supporting Seabrook since it already owns a chunk of the plant.
"In many ways this a very positive step for Seabrook Station," Scanzoni said of the takeover talks.
One Seabrook foe said he can't see how the takeover would let the remaining Public Service pay Seabrook carrying costs on its own.
"They can't get any revenue out of it unless they license it," Manchester lawyer Robert Backus said.
New Hampshire law bars utilities from charging ratepayers for power plants before they operate commercially. The state Supreme Court upheld that law on Jan. 26, denying Public Service an emergency rate increase and forcing the utility to seek bankruptcy protection two days later.
Public Service became the first big investor-owned utility to seek bankruptcy court protection since the Depression.
A Wall Street utility analyst, Dan Scotto of L. F. Rothschild Holdings Inc., said a takeover would make business sense for New England Electric since aside from Seabrook, Public Service is a profitable company.
But "this is not going to be clear sailing," Scotto said, partly because of unresolved questions about rate-making authority.
Scotto also said the proposal indicates that New England Electric is showing a lack of confidence in Seabrook's prospects.