Maine’s 2nd- and 3rd-largest electric utilities agree to merger

2 electric utilities in Maine to merge

PORTLAND, Maine — Two of Maine’s larger electric utilities would merge under an agreement announced Friday, creating a greater impetus for a north-south power transmission line for wind farms.

In a deal valued at about $108 million, BHE Holdings Inc., the parent company of the state’s second-largest electric utility, Bangor Hydro Electric Co., plans to buy Maine & Maritimes Corp., which owns Maine Public Service Co., the state’s third-largest electric provider.

The two utilities would retain their separate names and their rates would continue to be established separately. And customers should not see any immediate changes after the merger, officials said.

Bangor Hydro Electric has about 115,000 customers in eastern and central Maine. Maine Public Service Co. has 36,000 customers in far northern Maine. Central Maine Power Co., with 600,000 customers, is the state’s largest utility.

Down the road, the merger could provide the “financial wherewithal” needed to move forward with a power transmission line linking northern and southern Maine, said Brent Boyles, president and CEO of Maine & Maritimes. Such a line would provide a conduit for energy produced by wind farms in northern Maine to reach customers elsewhere in New England.

“I think it makes a stronger opportunity for transmission to be built in northern Maine,” Boyles said.

Maine Public Service and CMP partnered two years ago on a proposal to build a 150-mile transmission line at a cost of more than $600 million that would link northern Maine to the New England regional grid.

Regulators last year dismissed the proposal, but CMP and Maine Public Service have been in discussions about building a shorter, less-costly transmission line that would be paid for by wind-power companies that would use the lines, Boyles said.

BHE Holdings, a subsidiary of Emera Inc. of Halifax, Nova Scotia, offered to purchase Maine & Maritimes for $45 a share in cash — a 40 percent premium over the stock’s closing price Thursday. BHE would assume $31 million in debt now owed by Maine & Maritimes, Boyles said.

The merger is subject to shareholder and regulatory approval, which is expected to take six to eight months.

There are no plans for Maine Public Service Co. to join the regional New England power grid; it is now connected to a grid in neighboring New Brunswick.