The Journal’s View: Inland Northwest has strong corporate citizen in Avista
~January 17th, 2019
Avista Corp. and its suitor, Toronto-based Hydro One Ltd., aren’t likely to concede defeat just yet in Hydro One’s attempt to acquire the longtime, Spokane-based power company.
But with rejections of the $5.3 billion acquisition coming from both Washington and Idaho regulators, followed by rejection of an appeal in Washington, the two companies face an improbable path to completing successfully the deal they first announced in mid-2017.
In all likelihood, when the dust settles, the regional business community will have what it had before the acquisition talks: An independent, publicly traded power company headquartered in Spokane.
And that’s a good thing. Avista historically has been a standout example of a good corporate citizen. Its executives and other employees historically have been heavily involved in business and civic groups, and the company’s foundation gives hundreds of thousands of dollars annually.
In addition, the company is involved in innovation efforts, such as the Urbanova smart-city initiative in Spokane’s University District, and has supported the entrepreneurial ecosystem by “loaning” an executive to the organization during its formative months.
Meantime, Avista has been recognized for its environmentally responsible practices while providing power at lower rates than most utilities in the U.S.
Avista executives likely would argue the company’s corporate citizenship and investments in Spokane would have continued—and possibly been enhanced—if the Hydro One acquisition was successful.
Under the terms of the proposed acquisition, Avista would operate as a subsidiary of Hydro One and a standalone company, with its own board of directors and the same name, headquarters, and management team. Hydro One had agreed to nearly double Avista’s current level of charitable giving with a $2 million annual contribution to the Avista Foundation, following a one-time, $7 million contribution.
That might be a valid argument, though we likely will never find out.
Avista and Hydro One have been working to get the acquisition approved for 17 months, with the odyssey taking a turn last summer when Hydro One’s CEO resigned and nearly its entire board turned over under pressure from Ontario Premier Doug Ford.
The abrupt changes caught the attention of regulators, who expressed concerns about the Ontario government’s influence over Hydro One. The government owns a 47 percent share in Hydro One, but as the Idaho Public Utilities Commission pointed out in its decision rejecting the acquisition, “It’s abundantly clear that the Province does not have to own 51 percent of Hydro One in order to effectively control the company.” Ultimately, they determined the acquisition wasn’t in the best interest of Avista’s customers.
Whether the province’s influence over Hydro One would have had any direct impact on Avista is debatable. And if regulators stand behind their decisions to block the acquisition, those debates might not be relevant soon.
Even so, the business community has in Avista a strong corporate citizen that provides good jobs, a strong commitment to charity, and assistance to economic development initiatives. Regardless of what the future holds for the power company, let’s hope that never changes.