Washington says no go on Avista, Hydro One merger

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By JUDD WILSON

Hagadone News Network

COEUR d’ALENE — Washington state regulators stopped the proposed $5.3 billion sale of Avista to Hydro One dead in its tracks Wednesday.

A joint news release by Avista and Hydro One said, “The companies are extremely disappointed in the UTC’s decision, are reviewing the order in detail and will determine the appropriate next steps.”

Washington Utilities and Transportation Commission spokesman Kate Griffith said the parties still have the right to appeal Wednesday’s decision. The companies can petition for reconsideration within 10 days under WAC 480-07-850, Griffith said.

“They also can seek judicial review under RCW 34.05.542 within 30 days without bothering with a petition for reconsideration,” she added.

In its order, the Washington UTC noted that a change of political winds in Ontario, which controls 47 percent of Hydro One stock, “undermined more or less completely assurances we had been given earlier concerning political risks associated with the large ownership interest in Hydro One retained by the Province of Ontario.”

The mass resignation of Hydro One’s CEO and board of directors, at the urging of new Ontario Premier Doug Ford, “unquestionably harmed Hydro One and Avista,” wrote regulators.

“It cannot credibly be maintained that these actions by the province and resulting changes at Hydro One were in the best interests of Hydro One or Avista,” they said.

They concluded that the proposed sale involved too much political risk, and too much harm to Avista, to result in a “net benefit” to Washington customers. In 2009, Washington law changed to require such transactions to result in a “net benefit” to state residents, a higher requirement than their previous “no harm” standard.

“The net benefit standard requires that the transfer of property leave ratepayers better off as a result,” said the order.

Avista needed approval from all affected jurisdictions in order to close the sale.

“It would certainly not be in the public interest to allow Avista customers to fall victim to the political and financial whims of the Ontario government,” said Avista Customer Group attorney Norm Semanko. The group formed to oppose the merger. “The risk to Avista customers is just too high. We are heartened to see the Commission recognize this reality and deny Hydro One’s proposed acquisition of Avista.”

Federal regulators, as well as regulators in Alaska and Montana, had already approved of the sale. Decisions by the Idaho Public Utilities Commission and the Public Utility Commission of Oregon are still pending.

Idaho PUC spokesman Matt Evans said the case remains open before the Idaho regulators. Following the submission of legal briefs this Friday, Idaho commissioners will then be able to begin deliberations, he said. “There is no timeline for a decision, but I believe the parties asked for a ruling by the end of March,” Evans said.

If Avista and Hydro One do file a petition for reconsideration, Griffith said “the 30 day time-frame for seeking judicial review does not begin until the commission resolves the petition with an order, or denies it by default. Denial by default occurs if the commission does not act on the petition within 20 days. The timing of these events can deviate from these rules if the commission gives notice of a change in timing.”

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