20171129UM 1897 Hydro-One DR 137-153 MJM_RA.docx

September 22, 2017
ELIZABETH THOMAS, PARTNER
JAMES SCARLETT
KARI VANDER STOEP, PARTNER
EXECUTIVE VICE PRESIDENT &
K&L GATES LLP
CHIEF LEGAL OFFICER
925 FOURTH AVENUE, SUITE 2900
HYDRO ONE
SEATTLE, WA 98104-1158
483 BAY ST, 8TH FL, SOUTH TOWER
[e-mail]
TORONTO, ONTARIO, M5G 2P5
[e-mail]
[e-mail]
DIRK MIDDENTS, PARALEGAL
S. KYLE MERSKY, SENIOR ADVISOR
K&L GATES LLP
OFFICE OF THE PRESIDENT & CEO
925 FOURTH AVENUE, SUITE 2900
HYDRO ONE INC.
SEATTLE, WA 98104-1158
483 BAY ST, 8TH FL, SOUTH TOWER
[e-mail]
TORONTO, ONTARIO, M5G 2P5
[e-mail]
RE:
Docket No.
Staff Request Nos.
Response Due By
UM 1897
DR 137– DR 153
October 6, 2017
Please provide responses to the following request for data by the due date. Please note that all responses must be posted to the PUC Huddle account. Contact the undersigned before the response due date noted above if the request is unclear or if you need more time. In the event any of the responses to the requests below include spreadsheets, the spreadsheets should be in electronic form with cell formulae intact.
Topic or Keyword: Regulatory FrameworkPlease clarify whether Hydro One Ltd went public with its first Initial Public Offering (IPO) on Sep. 18, 2015. In addition, please describe the steps and provide a copy of any controls imposed by Ontario as Hydro One Ltd acquired all of Hydro One, Inc.’s shares from the province.Please provide a narrative explanation of the due diligence performed by Hydro One in deciding to make an offer to acquire Avista.Please further explain Hydro One’s plans for investment in Avista.Please explain how Hydro One plans to recover the cost of acquiring Avista.How long does Hydro One plan to hold Avista? In this response, please discuss under what circumstances Hydro One would seek to sell Avista in the future, if that is even a possibility. Herein please explain why Hydro One’s interest in holding Avista would be closer to that of Berkshire Energy in very long-term ownership of PacifiCorp, or Macquarie Group Ltd ownership of Puget Holdings LLC which indirectly owns Puget Sound Energy, Inc. that might sell given certain incentives to do so.Please provide a list of the companies Hydro-Electric Power Commission of Ontario / Ontario Hydro acquired from 1906 to restructuring, and then divested. If no companies were acquired and later divested, please note that.Please provide a list of the companies Hydro One Ltd has acquired since Hydro One Ltd was established from the restricting of Ontario Hydro pursuant to the Energy Competition Act in October 1998, and then divested. If no companies were acquired and later divested, please note that.Please provide quantitative detail of the financial status and Hydro One’s assessment of Avista’s pension and post-retirement medical funds.After merger would Hydro One have access to and control of Avista’s pension and post-retirement medical fundseither directly or indirectly through the Avista Board of Directors which it would then control?Please provide a narrative explaining why Hydro One states in its application that benefits will not accrue in the near term.Please explain whether the Avista Board of Directors retains authority over capital expenditures at the utility level post-merger. In the answer is no, please explain who would then have this authority post-merger.Please provide a copy of the final due diligence for the acquisition of Avista by Hydro One identifying who contributed to it and who paid for that analysis.Please provide a copy of (executive) overviews and reports presented to the Hydro One Board of Directorsand to the OEB or other regulators summarizing the due diligence performed and findings thereof in consideration of the acquisition of Avista by Hydro One.Please provide the analysis and work papers showing Hydro One’s valuation of Avista’s indirect options to buy Alaska hydroelectric facilities through AERC.Please provide the analysis and work papers showing Hydro One’s valuation of Avista’s indirect opportunity to develop gold resources in Alaska through AERC.
Topic or Keyword: Synergies and Benefits of ScalePlease discuss why Hydro One would need to purchase Avista to gain access to new computer software versus leasing or buying this software from Avista. In this discussion please explain whether the benefits Hydro One is talking about describe current existing software or different future software that once developed or acquired would be applied over larger operations at a lower cost per future application seat or user.
Topic or Keyword: Peer AnalyticsPlease provide Hydro One’s market to book assessment of Avista in comparison with the Companies Hydro One used as Avista’s peer group for financial analytics.
Please name your responsive file to include the Data Request number. Once you have posted your response to the Data Request to the PUC Huddle account, use the “Sharing” feature of Huddle to generate an email to authorized parties notifying them that the response has been posted. In the body of the generated email, list the Data Request number associated with your response.
You must mark confidential responses as such and post them to Huddle in the appropriate “Confidential” folder. Access to Confidential folders is limited to individuals who have signed the protective order. You should not send confidential documents (hard copy or electronic) separately to the Commission or its Staff; you should post confidential responses only to the Huddle account.
Should you need to request an extension to the due date for the data responses you will need to contact the staff attorney assigned to the case for approval?
Questions regarding the use of Huddle should be directed to [e-mail].
/s/ John Crider and Marc Hellman – Staff AdministratorsStaff Initiators:Matt [e-mail]503-378-6164
Rose [e-mail]503-378-8718