Washington state denies HydroOne's acquisition of Avista
Regulators says proposed acquisition wouldn't serve public interestDecember 5th, 2018
Washington state regulators denied the proposed acquisition of Avista Corp. by Canada-based Hydro One Limited, finding the merger wouldn't service the public interest.
The Washington Utilities and Transportation Commission determined the proposed merger agreement doesn't protect Avista or its customers from political and financial risk, nor does it provide a net benefit to customers as required by state law.
According to the UTC order, "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 decision and take actions in the future that may cause harm instead of promoting the interests of Avista, its customers, and Hydro One's non-government shareholders."
Avista announced in July 2017 that Toronto-based Hydro One intended to acquire the longtime Spokane-based energy company in a transaction valued at $5.3 billion U.S.
The transaction required approval of UTC and regulatory agencies in Idaho, Montana, Oregon, and Alaska.
The UTC determined benefits promised in the transaction, including rate credits, are inadequate to compensate for the risks Avista customers would face if the sale was approved, and customers likely would be no better off with the transaction.
"Provincial government interference in Hydro One's affairs, the risk of which has been shown by events to be significant, could … diminish Avista's ability to continue providing safe and reliable electrical and natural gas service to its customers," the UTC determined.
The provincial government of Ontario owns about 47 percent of Hydro One, but the recent forced retirement of its CEO and resignation of its board of directors has fueled concerns that a mix of institutional investors could take control of the company.