The Idaho Public Utilities Commission has denied the proposed merger of Avista Utilities and Hydro One, citing concerns about lack of the commission’s ability to protect consumers going forward and state laws restricting its ability to approve transfers of utility property to entities owned by another state. It stated that Idaho Code § 61-327 prohibits the transfer of assets from a regulated electric utility to an entity that is “owned or controlled, directly or indirectly, by … any other state.” Idaho Code § 61-327 more specifically bars the transfer if the entity is “acting in concert or arrangement” with “any other state.”


The commission noted that although Hydro One is an investor-owned utility, the Province of Ontario is its largest shareholder with 47% of outstanding shares, and the Province also maintains unique governance agreements with Hydro One, granting it significant control and influence over the utility. The commission cited the unique nature of Hydro One as a state-owned entity in deciding that concerns regarding protection of the interest of Idaho ratepayers outweigh the potential benefit of rate credit and energy efficiency promises offered by the parties supporting a settlement presented in the case. It also concluded that provisions contained in the proposed sale agreement designed to protect ratepayers from financial risk associated with the transfer were insufficient to overcome its concerns over loss of its ability to protect consumers going forward.


The settlement proposal called for Avista to become a wholly owned subsidiary of Hydro One, the largest electric transmission and distribution utility in Ontario. Avista would have continued to operate out of its headquarters in Spokane under the same name, with existing staffing levels and management team. All parties to the case had entered into a proposed settlement agreement that contained provisions intended to protect Avista and its customers from financial risk associated with the transaction. Among 73 commitments outlined in the proposed settlement were nearly $16 million in rate credits for Idaho customers over five years and more than $5 million to fund energy efficiency, weatherization, conservation and low-income assistance programs over a 10-year period. Re Hydro One Limited & Avista Corp., Case Nos. AVU-E-17-09 & AVU-G-17-05, Order No. 34226, Jan. 3, 2019 (Idaho P.U.C.)

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