Tom May is bringing a Fortune 500 company to Boston.
Unless Connecticut regulators say otherwise, the executive-suite power behind a merged Northeast Utilities will shift from Hartford to Boston.
In NU’s proposed $4.7 billion merger with Boston-based NStar — which May runs as chairman, president and CEO — the company intends to be a utility holding company with dual headquarters, including its top executives having offices and staging meetings in the Connecticut and Massachusetts capitals.
“It is important to have a presence in both Hartford and Boston,” said NStar spokeswoman Caroline Pretyman.
Despite plans to combine their executive teams to keep the two cities equal, Boston appears to emerge as the power player. May and the new NU chief financial officer are Boston executives; the plurality of the company’s customers will be in Greater Boston; and the majority of the executive team will be former NStar officials. Charles Shivery, NU’s current president, CEO and chairman, will relinquish all power with the company after 18 months.
When the NU/NStar merger first was proposed on Oct. 16, 2010, Connecticut officials including Attorney General George Jepsen, Consumer Counsel Elin Swanson Katz and the co-chairs of the legislature’s Energy Technology Committee expressed concerned that May was slated to become president and CEO of NU while the headquarters half-shifted to Boston.
However, the concerns among Connecticut officials over the relocation of NU’s headquarters and its executive team were overshadowed in 2011 by questions over rates, reliability, storm response, emergency preparedness and renewable energy. Those topics dominated the discussion during the public hearings in February before the Connecticut Public Utilities Regulatory Authority’s (PURA) review of the merger.
Much like their counterparts in Massachusetts, Connecticut regulators have the opportunity to negotiate conditions on the state’s approval of the merger. Because the PURA decision is pending until March 26 and negotiations are ongoing, Connecticut’s officials remain tight-lipped about what conditions they will seek from the utility giant.
Jepsen, through his spokeswoman, declined comment because of pending negotiations.
To sway Massachusetts officials, NU and NStar recently agreed to buy power from the offshore renewable energy project Cape Wind, provide a $21 million rate credit to customers, and freeze rates until 2016.
Massachusetts officials did not impose any headquarters or executive requirements on the new utility, but the proposed plan still calls for a dual headquarters in Boston and Hartford.
Post merger, Charles Shivery — NU’s current president, CEO and chairman — becomes nonexecutive chairman for 18 months when May will assume that title as well. In addition to Shivery and May, the new NU will have six other people on the executive team, with an even split between NStar and pre-merger NU employees.
This executive team will split their time between the two headquarters, Pretyman said, although whether that is an even split has to be determined. Each member will have two offices in Connecticut and Massachusetts and hold staff meetings in both locations. Board meetings will alternate between the two states.
Executives for NU will be Shivery as nonexecutive chairman; May as president and CEO; current NStar Chief Financial Officer Jim Judge as the post-merger CFO; current NU Chief Operating Officer Leon Olivier as the COO; current NU CFO David McHale as chief administrative officer; NU General Counsel Gregory Butler in the same role; current NStar senior vice president for corporate relations Joe Nolan in the same role; and current NStar senior vice president for human resources Christine Carmody in the same role.
This executive team will have four members from NStar and four from NU. That balance changes in NStar’s favor when Shivery retires, giving May the chairman role.
Current NU employees in Connecticut may have to transfer to Boston, but that’s something that has yet to be determined. “This is something we will look at once the merger is approved,” NU spokesman Al Lara said.
NU and NStar have had limited time on the details of the post-merger operations of the company, as they await approval. The two companies have obtained all the necessary approvals except from regulators in Massachusetts and Connecticut, which will issue their final rulings in early April.
If the merger is completed, 45 percent the new NU’s customers will be in Massachusetts. Presently, two thirds are Connecticut customers.
NU will have 1.1 million electric and 300,000 natural gas customers in Greater Boston with another 200,000 electric customers in Western Massachusetts. In Connecticut, the company will have 1.2 million electric customers and 205,000 gas customers.
“Both companies have their commitment to each of the areas,” Lara said. Post merger, the NU’s headquarters will be 26 Prospect St., Hartford and 800 Boylston St., Boston
NU will be the third Fortune 500 company headquartered in Boston, after Liberty Mutual Insurance and investment firm State Street Corp. Hartford is headquarters to four Fortune 500 companies: NU, United Technologies Corp., Aetna, and Hartford Financial Services Group.
NStar was primarily located in Westwood, Mass. before moving corporate offices to the Prudential Center in Boston. NU was headquartered in Berlin, before moving corporate offices to Hartford in 2009.
“That was the culmination of wanting for many years to have a presence in the capital city,” Lara said. “We are in the new building in Hartford, and we enjoy it.”