A divided Public Utilities Commission ruled Tuesday that Central Maine Power Co. can skip state review of a $2.5 billion deal that puts its parent company under the full control of a Spanish energy giant.

Regulators voted 2-1 to waive state regulatory review of the deal in which Iberdrola, headquartered in Bilbao, Spain, will acquire the remaining 18.4% of shares of CMP parent company Avangrid Inc. that it does not currently own.

Chairman Phillip Bartlett II and Commissioner Patrick Scully followed a hearing examiner's Aug. 26 report that said CMP's request for a waiver of state law calling for a review is warranted based on regulators' previous approval of the corporate structure. Commissioner Carolyn C. Gilbert opposed the waiver.

Related CMP moves one step closer to avoiding regulatory review of Iberdrola takeover

CMP is Maine's largest electricity provider, serving about 635,000 businesses and households in southern and central parts of the state.

The utility argued that Maine regulators had already authorized Iberdrola's indirect ownership of CMP and Maine Natural Gas in 2008 when Iberdrola acquired Energy East Corp., a predecessor of Avangrid. The 2008 reorganization was "thoroughly litigated by multiple parties" and resulted in the PUC's approval with 59 conditions, Scully said. Conditions include PUC access to books and records, audit reports and tax returns, notice of adverse rulings or decisions and other matters.

Gilbert cited concerns about the "passage of time" since the 2008 agreement.

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Scully said the 2008 conditions included "extensive reporting requirements and ring-fencing conditions" to protect Maine utilities and ratepayers from financial harm resulting from the deal. Ring-fencing is the separation of assets or profit of subsidiaries to limit risk or loss in a parent company.

Fitch Ratings said in a Sept. 5 note that Avangrid's ring-fencing is "porous" due to the protections of economic regulation. The ratings agency said the deal could be positive for Avangrid "because it could benefit from the financial flexibility of Iberdrola."

The Iberdrola deal will make Avangrid a privately held company, exempt from filing financial and operational details with the U.S. Securities and Exchange Commission. Critics of the deal, including the Office of the Public Advocate and environmentalists, focused on that provision; they said Avangrid would be a less transparent business and more difficult to monitor.

The Natural Resources Council of Maine said extreme weather and flooding in recent years have led to increased concerns about CMP "going dark" because its owners "appear to be focused on profit-driven corporate maneuvers rather than bread-and-butter utility operations to improve resiliency, strengthen the grid and rapidly bring on new clean energy across CMP's service territory in Maine."

Related Critics want regulatory review of CMP's corporate takeover

Scully said the deal would have "no negative impact" on the PUC's ability to regulate CMP and MNG "resulting from the future lack of SEC filings at the Avangrid level."

The most recent SEC filing by the Connecticut-based company, which trades on the New York Stock Exchange, was a supplement to an announcement of its annual meeting Sept. 26.

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In New England, Avangrid also operates natural gas delivery companies in Connecticut and Massachusetts and an electric utility in Connecticut. It operates two electric and gas companies in New York.

Connecticut Attorney General William Tong and state Consumer Counsel Claire Coleman have asked Connecticut regulators to review the Iberdrola-Avangrid deal. The Public Utilities Regulatory Authority has opened an inquiry.

"Once fully private, Avangrid will no longer have an obligation to make filings with the U.S. Securities Exchange Commission, will no longer have minority shareholders that could serve as a check on risky corporate behavior and will no longer be subject to a 2015 shareholder agreement established when Avangrid acquired United Illuminating, Southern Gas and Connecticut Natural Gas," the two Connecticut officials said.

The New York Public Service Commission also decided to review the Iberdrola-Avangrid deal.

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