By William Opalka

Connecticut regulators released a draft decision Tuesday approving Iberdrola USA’s $3 billion acquisition of UIL Holdings, adding a requirement that UIL’s headquarters remain in the state indefinitely.

With its “proposed final decision,” the Connecticut Public Utilities Regulatory Authority appears poised to give final approval next month to the Spain-based conglomerate’s second try to acquire UIL. The companies withdrew their initial application in June when PURA indicated it was likely to deny it.

“The authority concludes that the applicants have met their burden of proof that the proposed transaction, as presently structured, is in the public interest,” PURA wrote in the draft. UIL is comprised of The United Illuminating electric distribution company and two natural gas distribution companies in Connecticut, and two natural gas distribution companies in Massachusetts.

The regulators required Iberdrola to amend its settlement agreement with the state Office of the Consumer Counsel to include a promise to keep UIL’s headquarters in Connecticut for as long as it owns it. The companies had committed to a minimum of seven years.

“The authority sees the applicants’ commitment to maintaining its headquarters in Connecticut as meaningful and an integral aspect of this approval. Having a physical presence in the state enables more effective local management of the day-to-day operations of Connecticut-based utilities,” PURA said.

Otherwise, the draft largely mirrors the settlement agreement, which was filed in September. The companies agreed to “ring-fencing” to protect the Connecticut operations from any financial risks from Iberdrola’s other domestic or international operations — addressing a concern that helped doom the initial filing. (See Iberdrola Refiles Acquisition Bid for UIL Holdings.)

PURA also required the companies to provide a more detailed post-merger plan on their commitment to hire 150 people in Connecticut, saying “the details of the hiring plan are weak at this time.”

The settlement provides $40 million in ratepayer credits to existing electric and gas customers; approximately $45.4 million in rate freezes and avoided costs related to pipeline upgrades and system hardening; and approximately $39 million in public benefits from environmental remediation, charitable contributions and customer disaster relief, the draft says.

The companies previously agreed to a consent order with the state’s Department of Energy and Environmental Protection that would allow the contaminated English Station site in New Haven to be cleaned up for reuse. (See Iberdrola, UIL Would Clean Up Site if Connecticut Acquisition Approved.) The draft reiterates that the estimated $30 million in cleanup costs will come from shareholders and not ratepayers.

Parties to the PURA proceeding have until Dec. 1 to submit written comments on the proposed decision. The PURA commissioners are scheduled to hear oral arguments on the case on Dec. 3 and plan to render a final ruling on Dec. 9.

Iberdrola said last week it plans to change its U.S. holding company’s name to Avangrid following the UIL merger, but the names of the local distribution companies, including New Haven-based United Illuminating, would not change.