Agreeing with the intent of lowering financial risk and raising credit ratings, the Idaho Public Utilities Commission Wednesday approved Avista Corp.’s proposal to reorganize, creating a still-to-be-renamed holding company for Avista Utilities, which serves electricity and natural gas customers in northern Idaho. The PUC noted that last year’s repeal of the federal Public Utility Holding Company Act (PUHCA) allows multi-state utilities like Avista to form holding companies.
Avista’s principal energy utility operations are in the state of Washington, along with smaller operations in Oregon. The company is seeking similar regulatory approvals in those two states.
For an interim period, the new holding company will be called “AVA Formation Corp.,” a spokesperson for the PUC said, noting it is a “placeholder name until the company selects a final one.”
In announcing its approval, the PUC said the holding company structure is expected to “provide additional protection for ratepayers by further separating the regulated utility’s operations from the operations of other Avista subsidiaries that are not regulated.” It went on to laud the use of so-called “ring fencing” to ensure that ratepayer dollars are not used to subsidize unregulated subsidiaries and that utility ratepayers “are protected from the risks of Avista operating other nonregulated businesses.”
There will be no transfer of utility assets as part of the reorganization, and no changes in utility operations are expected, according to what Avista told the PUC in its application to form the holding company. A number of commitments by the utility were made to the state regulators as part of stipulations leading to the approval, the PUC spokesperson said. They include:
A copy of the Idaho PUC’s order is available at the regulatory panel’s website (www.puc.idaho.gov).
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