In Washington state a settlement has been reached in the $5.3 billion acquisition of Spokane, WA-based natural gas and power distributor Avista Corp. by Ontario-based Hydro One Ltd., a former provincial Crown company that is now investor-controlled.
Staff of the Washington Utilities and Transportation Commission (WUTC) said Wednesday it has reached a settlement on the proposed merger with the two companies and various industrial, environmental, energy and labor organizations.
The deal was filed with the three-member WUTC, and it includes more than $30 million in rate credits to Avista's Washington customers over a five-year period, $11 million in new and expanded low-income programs and various accounting and set asides for Avista's interest in the Colstrip coal-fired generation plant in Montana. The WUTC will hold public hearings on the deal in April and May and make a final decision by the fall of this year, a commission spokesperson said.
Under the settlement proposal, Avista is supposed to become a wholly owned subsidiary of Toronto-based Hydro One, maintaining its Spokane headquarters and its combination gas/electric Avista Utilities' name, work force and five-state service territories in Oregon, Idaho, Montana and Alaska, in addition to Washington.
When the potential merger was announced last September, the companies described the deal as a cross-border step to “create a North American leader in regulated electricity and natural gas business with over C$32.2 billion ($25.4 billion) in combined assets.
WUTC staff stressed that the settlement provides protections for the U.S.-based utility, helping insulate Avista from any financial risks inherent in Hydro One, including tightening the financial requirements for dividends to Hydro One from Avista and restricting its ability to lend funds to the Canadian electric distribution/transmission company.
While the merger application of the two companies called for a $19 million credit over 10 years for Washington Avista customers, the settlement increased the requirement to $30.7 million over five years, a WUTC spokesperson said.