ALBANY, N.Y. (AP) – Global energy company Iberdrola has accepted a series of conditions New York regulators placed on its buyout of Energy East and plans to go ahead with the $4.6 billion deal.

The approval of New York’s Public Service Commission was the last obstacle Iberdrola faced in its bid for Energy East, which owns power companies in New York, Maine, Connecticut and Massachusetts. Regulators in the other states had already approved the plan.

Iberdrola – which is based in Spain – met stiff resistance in New York, where staff analysts at the PSC initially took a hard line against the buyout, citing concerns that it wouldn’t be in the best interest of state consumers and businesses.

Energy East is the parent of Rochester Gas and Electric Corp. and New York State Electric and Gas, which together have 1.7 million electricity and natural gas customers.

After more than a year of regulatory wrangling, the PSC endorsed the deal last week but imposed a series of conditions aimed at protecting those customers.

The conditions include requiring Iberdrola to put aside $275 million in a special fund to offset future rate increases and to sell the fossil-fuel power plants Energy East owns in New York to conform with a state policy that power companies shouldn’t own both transmission lines and generating plants.

At the same time, the commissioners allowed Iberdrola to keep plants powered by wind and water. The company – one of the world’s largest developers of wind power, with projects spanning from the Pacific Northwest to Europe – had threatened to nix the deal if state regulators blocked them from owning wind-energy plants.

The PSC’s compromise, however, requires Iberdrola to commit to spend $200 million on wind energy development in New York. The company previously vowed to spend $2 billion on wind energy in the state, but it hadn’t put that commitment to writing.

“Iberdrola has helped countries around the world meet their green-energy goals while generating new investments and new jobs, and we’re looking forward to adding to that record of growth in New York state,” Ignacio Galan, the company’s chief executive, said in a statement Wednesday.

The buyout was widely supported by state business interests and public officials from both parties, including Gov. David Paterson, state legislative leaders and U.S. Sens. Charles Schumer and Hilary Clinton.

Some opponents, however, remain concerned that Iberdrola may be able to exercise too much power over pricing in New York’s energy markets if it is allowed to hold onto power generating plants.

“We still believe having a line in the sand separating companies with generating units and distribution systems is appropriate and the right thing to do,” said Gavin Donohue, president of Independent Power Producers of New York, a trade group of companies that generate power and sell it to utilities.

Iberdrola and Energy East sent letters to the PSC on Wednesday saying they accept its terms and conditions on the buyout. Neither said when they expect to close the deal.

Energy East shares rose 35 cents to $28.57 in afternoon trading.

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