Washington Utility Regulators Deny Hydro One Acquisition of Avista
UPDATED with a comment from Avista.
Washington utility regulators say the Canadian utility Hydro One may not acquire the Spokane-based utility Avista. In a statement issued Wednesday afternoon, the Utilities and Transportation Commission said "the proposed merger does not serve the public interest."
The utilities filed an application of their intent to merge in September 2017. Avista would become a wholly owned subsidiary of Hydro One, an electric transmission and distribution utility headquartered in Toronto, Ontario. Avista would have maintained its existing corporate headquarters in Spokane, Washington, and continued to operate in Washington under the same name, management team, and employee structure.
"The parties also asserted their agreement offered financial protections for Avista customers and insulated Avista from Hydro One’s largest shareholder, the Province of Ontario," reads the press release.
The regulatory process in the five states in which Avista operates (Washington, Idaho, Oregon, Montana and Alaska) was moving along until last spring, when a change in provincial leadership in Ontario introduced new concerns about the merger.
In June, Doug Ford took over as premier of Ontario. When he did, he announced the province had agreed with Hydro One that its board of directors would be replaced and CEO Mayo Schmidt was immediately retiring.
That shakeup caused regulatory agencies in several states to reconsider the merger.
“The proposed transaction cannot be said to be consistent with the public interest when it is evident that decisions affecting Hydro One’s and Avista’s business operations and financial integrity are subject to political considerations that may motivate one provincial leader or another to make decisions and take actions in the future that may cause harm instead of promoting the best interests of Avista, its customers, and Hydro One’s non-government shareholders," the commission wrote in the order issued Wednesday. "Avista’s customers would be no better off with this transaction than they would be without it.”
The press release says "the commission further directed Avista to work with commission staff to return to customers $10.4 million in tax benefits left outstanding from Avista’s last general rate case."
Avista and Hydro One issued a brief statement. "The companies are extremely disappointed in the UTC’s decision, are reviewing the order in detail and will determine the appropriate next steps."
Avista is also seeking approval from the Idaho Utilities Commission. That move is opposed by Boise attorney Norm Semanko.
“I’m very heartened by the decision, glad to see the commission sees the reality of the situation, the Avista customers should not be subject to the political and financial whims of the government of Ontario," Semanko said.
Read the full WUTC release here.