The Idaho Public Utilities Commission has denied the proposed merger of Avista Utilities and Hydro One, saying the transaction is prohibited by Idaho Code § 61-327, which limits the ability of an electric utility to sell assets in certain situations.
The PUC said that although Hydro One is an investor-owned utility, the province of Ontario (Canada) is its largest shareholder at 47% of outstanding shares and the province maintains “unique governance agreements” with Hydro One, which gives it “significant control and influence over the utility.”
Hydro One issued a brief statement, notifying of the denial and saying, “The companies are disappointed in the Commission’s decision, are reviewing the order in detail and will determine the appropriate next steps.”
Under the proposal, Avista would become a wholly owned subsidiary of Hydro One, an electric transmission and distribution utility. Avista would continue to operate out of its headquarters in Spokane, Wash., under the same name, with existing staffing levels and management team. The company provides electric service to about 378,000 customers (130,000 in Idaho).
Hydro One was a Crown Corporation owned entirely by Ontario until 2015, when it was partially privatized.
The companies filed their joint application for PUC approval in September 2017.
The Idaho PUC was one of five state regulatory entities required to approve the merger. The PUC says, “Interested parties may petition the Idaho Commission for reconsideration of its order in this case by no later than Jan. 24, 2019.”
The Washington Utilities and Transportation Commission also denied the proposal, on Dec. 5. On Dec. 17, Avista and Hydro One filed a petition requesting the commission reconsider its denial and that the commission rehear the matter to accept new evidence.
Just before this denial, the two companies selected the five independent directors to serve on the new Avista Board of Directors.