Boston-based BEC Energy and Commonwealth Energy System completedtheir merger into $4.5 billion NSTAR last Wednesday – one day afterwinning approval for the transaction from the Securities andExchange Commission.

The merged company, NSTAR, now becomes the largest combinedelectric-gas utility in Massachusetts. Through its utilitysubsidiaries – Boston Edison, Cambridge Electric, CommonwealthElectric and Commonwealth Gas – it will serve about 1.3 millioncustomers in the state, including just over one million electriccustomers in the eastern section and 240,000 gas users in centraland southeastern Massachusetts. The company’s goal is to serve 2million utility customers by the end of 2001.

“The new company allows us to broaden our customer base, and tocapture the savings opportunities that the combined operations canproduce,” said Thomas J. May, who has been named chairman and CEOof NSTAR. And like most utilities in the Northeast region, heindicated that NSTAR will continue to evaluate otheracquisition/merger opportunities.

The company’s goal has been to “become the premier wires andpipes delivery company [and]…to get out of the generationbusiness. That’s all happened already,” said NSTAR spokesmanMichael Monahan. “We’re the first utility in the nation to sell offour full portfolio of fossil fuel generating plants. We [also] werethe first utility in the nation to sell a nuclear power plant inthe auction process.”

Under the terms of the merger agreement, BEC Energy shareholderscan elect to receive either $44.10 in cash or one NSTAR commonshare for each BEC Energy share held, and Commonwealth Energyshareholders can elect to receive either $44.10 in cash or 1.05NSTAR common share for each Commonwealth Energy share held.Election forms were mailed to shareholders of the two companieslast week.

The merger of the two utility companies into NSTAR, which isheadquartered in Boston, took less than nine months to complete.Russell Wright, who was president and CEO of Commonwealth Energy,will be president and COO of the new company.

Susan Parker

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