20181207Avista and Hydro One Brief.pdf

Deborah A. Ferguson, ISB No. 5333
Ferguson Durham, PLLC
223 N. 6th Street, Suite 325
Boise, Idaho 83702
(208) 34s-sr83
[e-mail]
Counsel on Behalf of Hydro One
Limited and Olympus Equity LLC
David J. Meyer, Esq., ISB No.8317 r . , ii, .. -.
Vice President and Chief Counsel of
Regulatory and Governmental Affairs
Avista Corporation l
l4l I E. Mission Avenue
P.O. Box 3727
Spokane, Washington 99220
(s09) 49s4316
Counsel on Behalf of Avista
Corporation
BEFORE THE IDAHO PI'BLIC UTILITIES COMMISSION
IN THE TVTATTER OF THE JOINT
APPLICATION OF HYDRO ONE
LMITED AND AVTSTA CORPORATION
FOR APPROVAL OF A MERGER
AGREEMENT HYDRO ONE LIMITED'S AND
AVISTA'S BRIEF ON IDAHO
coDE $ 6l-327
L INTRODUCTION
Idaho Public Utilities Commission's ("IPUC") Staffhas conducted exhaustive due
diligence on the Hydro One Limited ('Hydro One") and Avisa Corporation ('Avista") proposed
merger. This hard look confrms that the transaction meets the criteria of Idaho Code $ 6l-328,
and that this merger is good for the citizens of ldaho. Late in the process, months after the
intervention deadline, an entity called the Avista Customer Group intervened, and now asserts
that Idaho Code $ 6l-327 bars the merger. As discussed below, Idaho Code $ 6l-327 does not
apply to this uansaction, and the merger should be approved by the IPUC.
cAsE NO. AVU-E-t7-09
AVU-G-17-05
II. STATUTORY TRAMEWORK
In January 1951, the ldaho Legislature passed Session Law 1951, ch.3, compiled as ldaho
Code $$ 6l-32?- 6l-331 ('the Act'). (A copy of the Act is attached in its entirety as an
Appendix to this brief.) Section 327 of the Act provides that certain public governmental
agencies, as well as entities not subject to regulation by the IPUC, are prohibited from acquiring
property in ldaho used to generate eleclrtcily. Any transfer of such property is subject to the
IPUC's approval underthe Act, which also includes penalty provisions.
IIL STATEMENTOFFACTS
Avisa is a Washington Starc corporation that generates, transmis, and distributes
elecricity in ldaho and else$rhere. Hydro One is an investor-owned electricity ransmission and
disribution utility headquartered in Toronto, Ontario, Canada. The capital stock of Hydro One
is uaded on the Toronto Stock Exchange. Hydro One is not a govemment entity, but rather is an
investor-owned corporation organized under the laws of Ontario. Direst Testimony of Mayo
Schmidt at 5{ (Sept. 14, 20l7x*Schmidt Direct"). A number of investors, including some
investors that are government entities, own some of Hydro One's capital stock. .ld. at 8. No
single investor or group of alfiliated investors owns or controls all or even a majority of Hydro
One's capial stock. Direct Testimony of Christopher Lopez at l0 (Sept. 14,2017). As a result,
no investor has a controlling interest in Hydro One. Id.
Among Hydro One's investors, the Province of Ontario (the "Province") is the largest
Investor. Rebuttal Testimony of Thomas Woods at 2 (Nov. 14, 2018) ("Woods Reb."). However,
the Province docs not control Hydro One. Id. The Province currently owns less than 50% of
Hydro One's stock and, after completion of the merger, the Province will own less than(So/o of
Hy&o One's stock. Supplemenal Testimony of James Scarlett at22-23 (Sept. 24,2018). The
Province is prohibited by a Govemance Agreement bctween the Province and Hydro One from
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II. STATUTORY FRAMEWORK
In January 1951, the Idaho Legislature passed Session Law 1951, ch.3, compiled as ldaho
Code $$ 6l-327- 6l -33 I ("the Act'). (A copy of the Act is anached in its entirery as an
Appendix to this brief.) Section 327 of the Act provides that certain public governmental
agencies, as well as entities not subject to regulation by the IPUC, are prohibited from acquiring
property in ldaho used to generate electricity. Any transfer of such properfy is subject to the
IPUC's approval under the Act, which also includes penalty provisions.
UI. STATEMENT OF FACTS
Avista is a Washington State corporation that generates, transmits, and distributes
electricity in Idaho and elsewhere. Hydro One is an investor-owned elecuicity transmission and
distribution utility headquartered in Toronto, Ontario, Canada. The capital stock of Hydro One
is traded on the Toronto Stock Exchange. Hydro One is not a govenunent entity, but rather is an
investor-owned corporation organized under the laws of Ontario. Direct Testimony of Mayo
Schmidt at 5-6 (Sept. 14,2017)("Schmidt Direct"). A number of investors, including some
investors that are government entities, own some of Hydro One's capital stock. Id. at 8. No
single investor or group of affiliated investors owns or controls all or even a majority of Hydro
One's capital stock. Direct Testimony of Christopher Lopez at l0 (Sept. 14,2017). As a result,
no investor has a controlling interest in Hydro One. Id.
Among Hydro One's investors, the Province of Ontario (the "Province") is the largest
Investor. Rebuttal Testimony of Thomas Woods at 2 (Nov. 14,2018) ("Woods Reb."). However,
the Province does not control Hydro Ooe.Id. The Province currently owns less than 50% of
Hydro One's stock and, after completion of the merger, the Province will own less than 43Yo of
Hydro One's stock- Supplemental Testimony of James Scarlett at22-23 (Sept. 24,2018). The
Province is prohibited by a Governance Agreement between the Province and Hydro One from
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acquiring additional shares if doing so would result in the Province having control over more
than45%oofshares. Id.at23;Ex. l0-3at$2.T.l.HydroOnealsodoesnotactasatrustee
nominee, agent, or representative for the Province. Woods Reb. at 2-8.
The role of the Province with respect to Hydro One is established and resticted by the
Governance Agreement that was entered in 2015 as part of Hydro One's lnitial Public Offering.
Joint Application at I7. Neither the Province nor any other Hy&o One shareholder has any
representatives on Hydro One's Board of Directors. Woods Reb. at 7-8. Instead, with the
exception of the CEO, all Hydro One Directors must be independent of both Hydro One and the
Province. See Exh. l0-3 (Governance Agreement ("GA") $$ 4.2.2, 4.2-3). The Governance
Agreement also establishes that the Hydro One Board is responsible for managing and
supervising Hydro One's business and affairs. Schmidt Direct at l0; see also GA $ 2.1.2. The
Govemance Agreement explicitly states that the Province will be involved in Hydro One as an
investor and not as a manager. Schmidt Direct at l0; see also GA $ 2.1.3.
After the merger (the "Transaction") closes, ttre stock of Avista will be 100% owned by
Olympus Equity LLC, an Idaho limited liabiliry company. Olympus Equity LLC stock in turn
will be held by Olympus Holding Coqp., a Dclaware corporation which is a wholly owned
indirect subsidiary ofHydro One. See Errata to Joint Application, Appendix I (Nov. 26,2018).
Avista's assets will continue to be owned by Avista and managed by Avista's executives and
Board. Pursuant to the Stipulated Commitrnents filed with the [PUC, only two of Avista's nine
Board members will be executives or employees of Hydro One- Stipulated Commiunent No. 3.
All other Avista Board members will be either independent or Avista executives or employees.
.Id. Avista's Board of Directors alone will be responsiblc for the selection of its CEO and will set
all policies for the utility, including any policy regarding the disposition of utility property.
Stipulated Commiunent No. 2. Alt decision-making authority over Avista operations will belong
3
to the Avista Board, and not to Hydro One. Thc Province will not own any Avisia stock and
cannot exercise any control, direct or indirect, over Avista after the merger.
Iv. DISCUSSION
The plain language of Idaho Code $ 6l-327 and the legislative intent underlying the
statute demonstrate that Idaho Code $ 6l-327 does not apply to the merger between Avista and
Hydro One.
(e) The plain language of ldaho Code $ 6l-327 does not apply to the merger.
Under ldaho law "[tlhe language of a statute should be given its plain, usual and ordinary
meaning. Where a statute is clcar and unambiguous, the expressed intent of the legislature shall
be given effect without engaging in statutory construction. The literal words of a statute are the
best guide to determining legislative intent." Idaho Code $ 73-l l3(a). Therefore any analysis
must start with the language of the statute.
Article III, sertion 16 of the Idaho Constitution requires that every act must express its
subject matter in is title. Idaho Code $ 6l-327 begins as follows: "ELECTRIC UTILITY
PROPERTY- ACQUISITION BY CERTAIN PLJBLIC AGENCIES PROHIBITED." From the
title of Idaho Code $61-327 it is clcar the subject maner of the law prohibits "certain public
agencies" from acquiring electric utility propeny, which is consistent with the language of the
Section.
Specifically, the statute provides that "[n]o title to or intcrest in any public utility . . .
property located in this state which is used in thc generation, transmission, distribution or supply
of electric power and energy to the public or any portion thereofl shall be transferred or
transferable to, or acquired by, directly or indirectly, by any me:urs or device whatsoever,"
( I ) "any govemmeot or municipal corporation, quasi-municipal corporation, or
governmental orpolitical unit, subdivision orcorporation, organized orexisting under the laws of
any otherstate";
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(2) "or any person, firm, association, corporation or organization acting as Eustee,
nominee, agcnt or representative for, or in concert or arrangement with, any such
government or municipal corporation, quasi-municipal corporation, or governmental
or political unit, subdivision or corporation";
(3) "or any company, association, organization or corporation, organized or existing
under the laws of this state or any other state, whose issued capital stock, or other
cvidence of ownership, membership or other interest therein, or in the property
thereof, is owned or contolled, directly or indirectly, by any such govemment or
municipalcorporation,quasi-municipalcorporation,orgovemmentalorpoliticalunit,
subdivision or corporation";
(4) "or any company, association, organization or corporation, organized under the laws
of any other state, not coming under or within the definition of an elecric public
utility or electrical corporation as contained in chapter l, title 61, Idaho Code, and
subject to the jurisdiction, regulation and conrol ofthe public utilities commission of the state of
Idaho under the public utilities law of this state; ...."
Idaho Code $ 6l-327.t
1. Because Eydro One and Avista are taxable for-profit corporations, and
not government entities, Idaho Code $ 6l-327 does not apply to the
Transaction.
In enacting Idaho Code $ 6l-327, the Legislature was specifically concemed with
preventing tax-exempt government entities from acquiring operating public utility property in
Idaho because this would deprive the State of valuable tax revenue supplied by these utilities. In
a nutshelt, it wanted to retain is ability to tax and regulate these entities.2 To address these
concerns, the Legislature prohibited transfers to any "government or municipal corporation,
quasi-municipal corporation, or governmental or political unit, suMivision or corporation,
organized or existing under the laws of any other state." Because ldaho Code $ 6l-327 only
applies to goverrunent entities, and because Hydro One is not a government entity, Idaho Code $
6l-327 does not apply to the Transaction. Hydro One and Avista, like other for-profit
I This is ao excerpt ofldaho Code $ 6l-327 aod does not include the exceptioo added in 1982 for cooperative
electric corporatioos. Alrc, for readability, the subheading numbers (l) - (4) were added
2 The legislative intent of $ 6l-327 is discussed further in section (b) of this brief at 8-10.
5
corporations, operate with the purpose of producing profits for their shareholders. Avista pays
Idaho taxes. If Avista merges wittr Hydro One, Idaho will continue to be paid taxes, as the
merger does not involve any tax exempt governmental entities. Further, the IPUC will reain full
regulatory authority over Avista.
Hydro One is also not acting as "trustee, nominee, agent or representative for, or in
concert or arrangement with" a govemment entity. All of those terms indicate an intent on behalf
of the Legislature to encompass companies that are acting on behalf of a govenrment endry.
Hydro One does not meet that definition and is not the Province's alter ego. Although the
Province owns a portion of Hydro One's shares, so do many private investors. No single investor
owns or controls all or even a majority of Hydro One's capital stock. The Hydro One Board is
not empowered or permitted to consider the interesB of the Province separate from its duties to
the corporation and is sakeholders as a whole. The Province does not serve on the Hydro One
Board. GA $$ 4.2.2,4.2.3. Hydro One's Board of Directors, alone, is responsible for deciding to
pursue the merger with Avista. GA $$ 2.1.2,2.1.3. Because Hydro One is not acting on behalf
of, or as the alter ego of, the Province, the Transaction is not prohibited by ldaho Code $ 6l-327.
Finally, Hydro One is not a "corporation ... whose issued capital stock, or other
evidence of ownership, membership or other interest therein, or in the property thereofl is owned
or controlled, directly or indirectly," by a government entity. The terms "owned or controlled"
are not defined, so a court will give those terms their plain mganing. The plain meaning of thc
phrase 'bwned" is ttrat the govemment entity must own all or a majority of the corporation's
stock. The Province's minority interest in Hydro One does not make Hydro One a government
entity or give the Province ownership of Hydro One- Furttrermore, the Province cannot be said to
control (i.e., possess the power to manage or direct) the actions of Hydro One. GA $$ 2.1.2,
2.1.3,4.2.2,4.2.3.The Governance Agreement prohibits the Province from controlling or
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managing Hy&o One or its subsidiaries. Any interest the Province has in Hydro One by virnre of
stock holdings cannot be used to transfer any title to or interest in Avista's public utility
property, impact the regulation of Avisa by the IPUC or be used to conEol Avista. Because
Hydro One is not controlled by the Province, and Avista cannot be controlled by the Province,
Idaho Code $ 6l-327 does not prohibit the Transaction.3
2. Idaho Code $ 6l-327 applies only to transfers of tangible utility property
in ldaho.
Idaho Code $ 6l-327 also does not apply to the Transaction because there will bc no
transfer of title or interest in tangible public utility property. Idaho Code $ 6l-327 is expressly
limitcd to transfers or acquisitions of "title to or interest in any public utility . . . property located
in this state which is used in the generation, transmission, distribution or supply of electric
power and energy to the public ... ." The literal words of the statute require this construction. The
property covered by the stanrte is defined with respect to is location and use. It must be within
Idaho, and used for the generation, transmission, distribution, or supply of electric power and
energy. This clear language does not apply to the ransfer of shares of capital stock of Avista.
The IPUC has never interpreted Idaho Code $ 6l-327 to prohibit mergers involving the stock of
investor owned companies. On the contrary, it has approved them.a
Furthermore, the language of the penalty provisions in the Act demonstrate that Idaho
Code g 6l-327 is limited to tangible public utility property. Section 329 of the Act references the
I Becarse the immediate parent of Avista will be Olympus Equity LLC, an ldaho LLC, the fourth limitation in Idaho
Code $ 6l-327 is not triggercd-{See,e.g.,Finalfrer,2S2l3,JoiotApplicatioaofPaciliCorpandScottishPowerPLC,Nov. 15, l999,at l7n-18,
which approved a merger tansaction betu,een PaciliCorp and Scottish Power, a foreign corporation. In this order,
the IPUC disposed of ldaho Code $ 6l-327 in I foolnote oo lhe basis that both PacifiCorp and Scottish Power were
privately owued corporations that did not fall within lhe parameters of Idnho Code $ 6t- 327.
7
court's sale of property escheated to the State to be conducted as a foreclosure sale. Likewise, the
penalties in Section 33 I explicitly refer to "a transfer of any real or personal property."
In the Transaction pending before the Commission, the only items being acquired by
Hydro One (through its indirect subsidiary, Olympus Equity LLC) are the shares of Avista's
capital stock owned by Avista's investors. Avista will continue to exist and operate as a stand-
alone utiliry in ldaho and will continue to have its own Board of Directors and its own CEO.
Joint Application at 9. None of Avista's properry or other asses will change hands as a result of
the Transaction. Id. This is evidenced further by the fact that Avista has retained its water
rights.
Capital stock is not "property" within the meaning of Idaho Code $ 6l-327 both because
it is not tangible prope4y located in Idaho and because it is not used to generate or supply
elecriciry to the public. Because capital stock is not "property" under Idaho Code $ 6l-327, and
because capital stock is the only itcm being acquired in the Transaction through the merger and
by operation of law, Section 6l-327 does not apply to the Transaction.
Hydro One's acquisition of Avista's capial stock also will not result in an "indirect"
transfer of Avista's angible public utiliry property in Idaho to Hydro One. Under Idaho law, a
corporation is a distinct and separate legal entity. Jolley v. Idaho Securities, Inc.,9O ldaho 373,
387 , 414 P.2d 879 ( 1966). Ownership of stock in a corporation does not equate to ownership of
the corporation's assets or property. Pincock v. Pocatello Gold & Copper Mining Co., 100
Idaho 325, 328,597 P.2d 2l I (1979). Because stock ownership does not confer an ownership
interest in a corporation's property to a stockholder, no title or interest in Avisia's public utility
property will change hands as a result of the Transaction, either directly or indirectly.
I
O) The Legislative history aod the public policy underlying the Act support Hydro
One's interpretation that it does not bar the Transaction.
If the IPUC finds Idaho Code $ 6l-327 ambiguous, it may consider the legislative history
of Section 6l-327 to understand the l*gislature's intent in enacting this law. Fornrnately there
are several historical documents that reveal the clear purpose and intent behind Section 6l-327.5
These documents confirm it was the intent of the Legislature to bar tax-exempt governmental
bodies from other states from acquiring utility property in ldaho to protect its tax base.
Shortly after passage, the Act was summarized succinctly by the ldaho Attorney General
in his l95l-1952 Biennial Report to the State Legislature:
The l95l Legislature enacted a statute which forbade acquisition by a municipal
corporation of another state of facilities for the generation or transmission of electrical
energy in ldaho. The satute was patently aimed at preventing acquisition by Public Utility
Disricts of the Sate of Washington of the operating properties of the Washington Power
Company located in North ldaho.
Ferguson Declaration, Ex. D, p. 37.
As recounted by the ldaho Daily Stalesman on January 23, 1951, the Legislature took this
emergency action in a single day because if the Washington Water Power Company (which was
investor owned), was transferred to tax-exempt Public Utility Disricts in Washington State, the
State of ldaho would lose significant tax revenues. Ferguson Declaration, Ex E, p. 43.
A concern was expressed at the Technical Hearing that if the Legislature barred the
transfer of utility property to government entities of other states, it may have intended to bar
foreign govennmental entities too, as it seems unlikely it would give preferential treatment to
foreign bodies over sister states. However, there is a logical reason why the legislature targeted
sister states and was unconcerned about foreign govemmental entities. The Act applies to
t These documeots are attached as exhibits to the Declaration of Deborah A. FergusoD, and submitted in support of
this brief. Hydro One asks the IPUC to take administsative notice under IDAPA 31.01.01.263.01(b)(-3) of the
historical public documents surrounding Section 327, which are attachcd as exhibits to the declaration.
9
domestic governmental entities of other states because of thcir tax exempt status;6 foreign
entities are taxable. So even if a parry to this transaction were a foreign govemmental entity, or
controlled by one, the statute is not a bar.
But the Commission can safely avoid rcaching that issue because Hydro One and Avista
are non-governmental private entilies. Private entities--foreign or domestic-are not barred by
Section 6l-327.If a foreign entity sought to acquire elcctric utility property within ldaho's
borders, it would remain taxable and subject to IPUC control, and Section 6l-327 would have no
application to it. As in the IPUC's order approving the merger of PacifiCorp and Scottish Power,
Section 6l-327 likewise does not apply here, as this Transaction is also between non-
governmental entities subject to Idaho taxes and IPUC regulation.
V. CONCLUSION
Idaho Code $ 6l-327 does not apply to this Transaction as demonsrated through the
Ianguage of the Act and the legislative intent behind it. Because the Hydro One and Avista
merger is in the best interest of ldahoans, it should be approved by the Commission.
Respectfully submitted this 7rh day of December, 2018.
6 Idaho Code $ 63-602A exempts from property tax, among other things, "property belonging to the statc ofldaho
... [andl property belonging to any county or mrmicipal corporation or school district within this state." While there
is no law that iaterpres this statemenl in the conlext ofa muoicipal corporation organized under the law ofa state
other than Idaho, the slight variation in the language of this statute from similar language ia Article 7- Section 4 of
the Constitution of the State of ldaho indicates that the lafter exemption should be read as broadly applicable to
property within the State of ldaho that is owned by any municipal corporalion organized under the law of any state.
In addition, out-of-state govemment entities generally are not subject to ldaho's income tax provisions, which bcgin
with aud are intended to "nrirroC' applicable U.S. federal income tax law except to lhe exteot expressly provided in
the ldaho Code. Idaho Code $ 63-3002. Thus, without specific provision--of which there is none-to overide
Section I l5 of the Intemal Revenue Code of 1986, as amende{ an out-of-state govemment entity should not be
subject to ldaho income taxalion to the extent the income concerned is derived from the entity's performance of an
esseotial governtrlent function and accrues to the entity.
10
TTYDRO ONE LIIIIITED
Ferguson Durham,PLLC
Counsel on Behalf of Hydro One Limited and
Olynrpus Equity LLC
AVISTA CORPORATION
,,,y'7,/ s
David ]/Mleyer, ISB No. 83 17
Chief€ounsct for Regutatory
and Govcrnmental Affairs
Counselon Behalf of Avista
Corporation
11
APPENDIX TO
HYDRO ONE LIMITED'S AND AVISTA'S
BRrEF ON rDAHO CODE S 6r-327
Idaho Statutes
TITTE 51
PUBTIC UTILITY REGULATION
CHAPTER 3
DUTIES OF PUBTIC UTITITIES
6I-327. EIECTRIC UTILITY PROPERTY - ACQUISITION BY CERTAIN PUBLIC
AGENCIES PROHIBITED. No title to or interest in any public utility (as
such term 1s defined in chapled,--$&-Le--51, Idaho Code) property
located in this state which is used in the qeneration, transmission,
distribution or supply of electric power and energy t.o the publi-c or
any portion thereof, shall be transferred or transferable to, or
acquired by, directly or indirectly, by any means or device
whaEsoever, any government or municipal corporation, quasi-municipal
corporation, or governmental or political- unit, subdivision or
corporation, organized or existing under the laws of any other state;
or any person, fj-rm, association. corporation or organization actingas trustee, nominee, agent or representative for, or in concert or
arrangement with, any such government or municipal corporati.on, quasi-
municipal corporation, or governmental or political unit, subdivision
or corporation; or any company, associ-ation, organization or
corporation, organized or existing under the laws of this state or anyother state, whose issued capital stock, or other evidence of
ownership, membership or other interest therein, or in the property
thereof, is owned or controlled, di-rectly or indirectly, by any such
government or municipal corporation, quasi-municipal corporation, or
governmental or political unit, subdivision or corporation; or any
company, associaEion, organization or corporati.on, organized under the
laws of any other state, not coming under or within the definition of
an electric public utility or electrical corporation as contained 1n
chaPter_1.,@,rdahoCode,andsubjecttothejurisdiction,
regulation and control of the public utilities commission of the state
of fdaho under the public utilities .Law of this state; provided,
nothing herein shall prohibit the transfer of any such property by apublic utility to a cooperative electrical corporation organized underthe laws of another state, which has among its members mutual
nonprofit or cooperative electrical corporations organized under the
laws of the state of Idaho and doing business in this state, if such
public utility has obtained authori-zatj.on from the public utilities
commission of the state of Idaho pursuant to section 6t-328, Idaho
Code.
History:
t6L-327, added 1951, ch. 3, sec. 1, p. 4; am. L982, ch. 7, sec. 1,p. 10.1
How current is this law?
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Idaho Statutes
TITTE 51
PUBLIC UTILITY REGULATION
CHAPTER 3
DUT]ES OF PUBLIC UTILITIES
6L-328. ELECTRIC UTILITIES - SALE OT PROPERTY TO BE APPROVED BY
COMMISSION. (1) No electric public utility or electrical corporation
as defined in chapjBgf-L,lijE-Is-5l, fdaho Code, owning, controlling or
operating any property Located in this state whlch is used in the
generation, transmission, distribution or supply of electric power and
energy to the public or any portion thereof, shall merlre, sell, lease,
assign or transfer, directly or indirectly, in any manner whatsoever,
any such property or interest therein, or the operati-on, management or
control thereof, or any certificaEe of convenience and necessity or
franchise covering the same, except when authorized to do so by order
of t,he public utilities commission.
{2, The electric publ1c uti}ity or electrical corporation sha11
fiLe a verified application setting forth such facts as the commission
shall prescribe or require. The commissj.on shall issue a publj.c notice
and shall conduct a public hearing upon the application.(3) Before authorizing the transacti.on, the public utilities
commi-ssion shaL.I find:(a) That the transaction is consistent with the public interest,'(b) That the cost of and rates for supplying service wj-ll not be
increased by reason of such transactioni and(c) That the applicant, for such acquisition or transfer has the
bona fi.de intent and financial ability to operate and maintain
said property in the public service.
The applicant shal] bear the burden of showing that standards listed
above have been satisfied.(4) The commission shal} have power to j-ssue said authorization
and order as prayed fox, or to refuse to issue the same, or to issue
such authorization and order with respect only to a part of theproperty involved. The commission sha]L include in any authorization
or order the conditi.ons required by the director of the department of
water resources under section !2:J33L(61 , Idaho Code. The commission
may attach to its auEhorization and order such other terms and
conditions as in its judgment the public convenience and necessity may
require.History:
l6L-328, added 1951, ch.3, sec.2, p. 4t am.20OO, ch.224, sec.
2, p. 620.1
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Idaho Statutes
TITLE 61
PUBLIC UTILITY REGULATION
CHAPTER 3
DUTIES OF PUBLIC UTILITIES
6l-329. UNLAWFUL TRANSFER OR ACQUISITION ESCHEAT. Any suchproperty or interest in property hereafter transferred or acquired inviolation of this act sha1I escheat to the state of ldaho. The
attorney general ot the state shall institute proceedings in the
district court of any county in which such property, or any portion
thereof, is si-tuated, to have such escheat adjudged and decreed. If
the property is operating property, the court sha11 continue the
operation thereof under a recej-ver appointed by and under the control
and supervision of the court, pending final determi-nation of the
act j-on and the sale and dispos j-tion of the property. !{hen the court
has entered judgment escheating the property to the state, the court
shall thereupon order a sale of the property, or interest therein, inthe same manner as prescribed by the laws of the state of Idaho for
the sale of real estate under mortgage foreclosure. Out of the
proceeds arisJ-ng from such saIe, any valid liens or claims of third
parties shaLl be paid, and the balance shal1 be paid into the state
treasury for the credit of the school fund.
History:
161-329, added 1951, ch. 3, sec. 3, p. 4.1
How current is this law?
Search the Idaho Statutes and Consdtudon
Idaho Statutes
TITLE 61
PUBLIC UTILITY REGULATION
CHAPTER 3
DUTIES OF PUBLIC UTILITIES
6L-330. EVASIONS OF ACT CONCLUSM PRESUMPTIONS. Every
conveyance or transfer of property, or any interest therein, inviolat,ion of the provisi-ons of this act, whether voluntary orinvoluntary, or though colorable 1n form, or if made with the intent
or purpose to evade or avoid the provisions of this act, shall be voidas to the state, and the property or interest thereby conveyed ortransferred, shaIl escheat Eo the state as in this act provided. Aconclusive presumption that the conveyance or transfer is made with
the intent or purpose to evade or avoid the provisi-ons of this actshall arise upon proof of any of the following facts:
a. The purchase, acqulsition or t,aking of the property, orinterest therein, in the name of a person or party other than persons
or part,ies referred Lo in section 6l-327 t, fdaho Codel , if theconsideration is paid, guaranteed or otherwise secured, or agreed or
understood Lo be pai-d, guaranteed or otherwise secured, directly or
indirecEly, by a government or municipal corporation, quasi-municipal
corporation, or governmental or polltica1 unit, subdivision orcorporation referred to in section 6l-327[, Idaho Code].
b. The taking of the property in the name of a company,association, organization or corporation, if the shares of stock
therein, or other evidence of ownership, membership or other interesttherein, or in the property thereof, held by any government or
munj-clpal corporation, quasi-municipal corporation, or governmental orpolitical unit, subdivision or corporation, or any other company,
association, organization or corporation, referred to in section 61-
3271, Idaho Codel, together with such shares or other evidence ofownership. membershlp or interest held by others but paid for,
guaranteed or otherwise secured, directly or indirectly, by any such
government or municipal corporaEJ.on, quasi-municipal corporation, or
governmental or political uni-t, subdivision or corporation, amount to
a majority of the issued stock or other evidence of ownership,
membership or other interest therein, or in the property thereof.
c. The purchase, acquisition or holding of the majority of the
issued stock, or other evidence of ownership, membership or other
int,erest. therein, or the voEing control of any such stock or other
evidence of ownership, membership or interest, either directly or
indirectly, by any government or municipal corporation. quasi-
municipal corporation, or governmental or political unit, subdivisionor corporation, or any other company, association, organization orcorporat,ion, referred Eo in section 6L-327 L, Idaho Codel, in any
company, association, organizatj-on or corporation now or hereafter
owning, holding or operating any property located in this state which
is used in the generation, transmissi-on, distribution or supply ofelectric power and energy to the public or any portion thereof.
The enumeration in this section of certain presumptions shall notbe construed as to preclude other presumptions or inferences that
reasonably may be made as to the existence of intent or purpose to
e
evade or avoid the provisions of this aet, or escheat as provided for
herein.
History:
[61-330, added 195]., ch. 3, sec. 4, p. 4.1
How current is this law?
Search the Idaho Statutes and Cons6tudon
Idaho Statutes
TITLE 61
PUBLIC UTILITY REGULATION
CHAPTER 3
DUTIES OF PUBI,IC UTILITIES
51-331. VIOLATION Of ACT - CRIMINAL PENALTY. If any person, or
two (2, or more persons, act, negotlate, participate, attempt, arrange
or conspj.re to make or effect, or to receive or Eake, a transfer of
any real or personal property used for the purposes speci.fied in
sect.ion il*2j- or section 61-328 [, Idaho Code] , or of any interest
t,herein, in violation of the prohibltions contained in section 51-
327t, Idaho Code,l or of any other provi.sion of this act, each, any or
all of such persons, upon conviction thereof, sha1l be punished by
imprisonment in the county jail or state penitentiary not exceedingtwo (21 years or by a fine not exceeding $5000, or by both such fine
and imprisonment.History:
[51-331, added 1951, ch. 3, sec. 5, p. 4.]
How current is this law?
Search the Idaho Statutes and Consdtudon
Deborah A. Ferguson,ISB No. 5333
Ferguson Durham, PLLC
223 N. 6th Street, Suite 325
Boisg ldatro 83702
(208) 34s-s183
[e-mail]
Auorneyfor Hydro One Limiled
BEFORE TEE IDAHO PUBLIC UTILITIES COMMISSION
IN TIIE MATTER OF TTIE JOINT
APPLICATION OF HYDRO ONE
LIMTIED A}.ID AVISTA CORPORATION
FOR APPROVAL OF MERGER
AGREEMENT
)) cAsE NO. AW-E-1749) AV(J-G-I7-o5
)) DECLARATTON OF) IIEBORAE A. trERGUSON IN
) SUPPoRTOFEYDROOI\IE) LIMTTED'S AI\D AVISTA'S BRrEF
) oN rDAEO CODE S 6r-327
)
)
STATE OF rDArrO )
CoT.JNTYOF ADA )
I, Deboratr A. Fergusog declare as follows:
l. I am duly licensed to practice law in the State of Idaho and before the Idaho Public Utilities
Commission (tre "Commission"), and I'anr an afiorney with the firm Ferguson Durham, PLLC
and am an attorney of record for Hydro One Limited ('Hydro One") in the above-referenced
action. I make this declaration based upon my own personal knowledge, and can testify as to the
tnrth of the statements contained herein if called upon to do so.
2. I make this declaration in support of Hydro Ones and Avista's brief on ldaho Code $ 6l-
327 filedconcurrenfly herewith (the "Brief').
I
3. I researched whether there are any official records of the floor debates on January 22,1951,
pertaining to the passage of the legislation that became Idaho Code S 6l-327. There are no official
records of the floor debates recorded by the legislature.
4. Attached hereto as Exhibit A is a true and correct copy of Hydro One's Articles of
Incorporation.
5. Attached hereto as Exhibit B is a true and correct excerpt of People, Politics & Public
Po$'er by Ken Billingfon, Washington Public Utility Districts' Association, p. 58 (1988).
6. Attached hereto as Exhibit C is a true and correct excerpt of the January 22, l95l ldaho
House and Senate Joumal.
7. Attached hereto as Exhibit D is a true and correct excerpt from the Thirty-First Biennial
Report of the Attomey General of Idaho, l95l-1952, Robert E. Smylie, Attorney General.
8. Attached hereto as Exhibit E is a true and conect copy of an article published in The ldaho
Daily Statesman on January 23,lg5l,by John Corlett tilled,"Rill Pas.sed Banning I'ttblic Utility
Sales lo Governmenlal Agencies."
I declare under penalty of perjury pursuant to the law of the State of ldaho that the
foregoing is true and correct.
Respectfully submitted this /' day of December,20l8.
HYDRO ONE LMITED
By:
Deborah A. Ferguson
Ferguson Durham, PLLC
On Behalf of Hydro One Limited and Olympus Equity LLC
,)
EXHIBIT A
For Ministry Use
A l'usaqe exclusil du
Only
minislitE
Ontario Corporation Number
Numdro de la soci€b ea Onlaio
$;- B:irristry of t,iiniri+i'e dL,g
Lrf Covemmertl SEryrees 6ervicas gouve:nemcntslurontario
CERTIFICATE CEFITIFICATfhis is lo aertify thirt &\e$e Cej cetdie qua f""ii Jiri;ajrr:9lrlicles are eflec(ive on flatuts errtt,{lt en vi0u*i_jr lG
". au-gusJ__3"1 AO0T, 2015
@
1941138
A J siness Corrjor#'ioil-r Lri sur les socji$ec par l(,lcos
ARTICLES OF INCORPORATIONsilrurs coNsTtruTtFs
The name of the corporation is: (Sel out in BLOCK CAPITAL LErrERS)Form 1
BusioBss
Corporallons
Act
Fotmule 1
Loi surlas
soci'Es par
actons
H Y
Ddnomination sociale de la sociitd en LEI"IRES MAJUSCULES
E
l;irli
2. The address of the regislered oflice is:
Adresse du sidge soclal:
4R3 Rav StrecJ Sotrlh Tower Srritc 800
(Steet & Number or R.R. Number & if Multi.Ofiico Building give Room No-)
(Rue et numqrc ou numiro de la R.R. el, s'il s'eglt d'un adlfrce e bureaux, num'ro du bureau)
roronto oNTARto LM ls iC-lr ff{
(Name of Municipality or Post Office)
(Nom de la municipalitd ou du bureau de posle)
(Poslal Code)
(Code postal')
10 15
3. Number of directors islare:
Nombrc d adminislraleurs :
4. The first director(s) is/are:
P re m ie r( s) ad mi ni strate u (s)
Fixednumbe, l" - --l OR minimumandmaximum
Nombrefixd i- -. .-. I OIJ minlmumelmaximum
Fkst name, middle names and sumame
Prenom, autrcs Pftnoms et nom de famille
See Schedule 1A.
Address for service, giving Street & No. or R.R. No.,
Municipalily, Province, Country and Postal Code
Domicile 6lu, y compris la rue et le numdro, le numdro de la
R.R. ou le nom de ta municipaliE, la province, le pays et le
code poslal
Resident Canadian?
Yes or No
Rdsident canadien?
OuiNon
*lol N E L M ID9 T D
I
I
-J l
071 16E(05/2007)
1
I
I
Schedule 1A
Firs( namc, middlc namcs and surnamc
Pr6nom, autrcs Prdnoms €t nom de
famille
Addrcss
Mayo Schmidt
David Denison
George Cooke
Gale Rubenstein
Marcello (Marc) Caira
Charles Brindamour
Kathryn Jackson
lan Bourne
Frances Lankin
Jim Hinds
Margaret (Marlanne) Hanis
Christie Clark
Philip Orsino
Jane Peverett
Roberta Jamieson
Addrcss for scrvic€, givlng Street & No' or R.R. No.,
Municipality, Provlnce, Country lnd Postal Codc
Domicile dlu, y contpris la ru! ct lc num6ro, le num6ro dc la
R.R ou le nom de la mnnicipalite, la provincq le pays et lc
codc postal
483 Bay Street, 8th Floor, South Tower
Toronto, ON MsG 2P5
483 Bay Street, 8th Floor, South Tower
Toronto, ON MsG 2P5
483 Bay Street, 8th Floor, South Tower
Toronto, ON MsG 2P5
333 Bay Street, Suite 3400
Toronlo, ON MsH 2S7
483 Bay Street, 8th Floor, South Tower
Toronto, ON MsG 2Ps
700 University Avenue, Suite 1500
Toronto, ON MsG OA1
483 Bay Street, 8th Floor, South Tower
Toronto, ON, MsG 2P5
606 4th Street SW, Suite 1410
CalgaryAB T2P 1T1
483 Bay Street, 8th Floor, South Tower
Toronto, ON MsG 2P5
40 Castle Frank Road
Toronto, ON M4W 226
483 Bay Street, 8th Floor, South Tower
Toronlo, ON MsG 2P5
401 Bay Street, Suite 1600
Toronto, ON MsH 2Y4
483 Bay Street, 8th Floor, South Tower
Toronto, ON MSG 2P5
483 Bay Street, 8th Floor, South Tower
Toronto, ON MsG 2P5
50 Generations Drive
Ohsweken, ON NOA 1M0
Residcnt
Canadian?
Yes or No
Rdsident
canadlcn?
No
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
071 16E(06/2007)
5. Restriclions, ifany, on business the corporation may carry on or on powers the corporation may exercise.
Linites, s'il y a lieu, imposies aux activitds commerciales ou aux pouvoirs de la soci6te.
None.
6. The classes and any maximum number of shares that the corporation ls authorized lo issue:
Ca6goies et nombre maximal, s'il y a lieu, d'actions que la sociee est aulorisee e emenre :
an unlimited number of Common Shares; and
an unlimited number of Preferred Shares, issuable in series.
071 16E (06/2007)
1
7. Rights, privileges, restrictions and conditions (if any) attaching to each class of shares and directors authority
with respect to any class of shares which may be issued in serles:
Droits, pivibges, restrictions et conditions, s'il y a lieu, rattachds d chaque caftgoie d'actions et polvcirs des
administrateurs relatifs d chaque catdgaia d'actions qui peut etre emise en serie :
See Schedule 74 - Common Share Terms
See Schedule 78 - Prefened Share Class Terms
3A
SCHEDULE"TA"
IIYDRO ONE LIMITED
(The "CORPORATION")
COMMON SHARE TERMS
The Cornmon Shares shall, as a class, have attached thereto the following rights,
privileges, restrictions and conditions :
I. The holders of the Common Shares shall be entitled to receive notice of and to
attend all meetings of shareholders of the Corporation except meetings at which
only the holders of another class or series of shares are entitled to vote separately
as a class or series, and shall be entitled to one vote at all such meetings in
respect of each Common Share held.
2- Subject to the rights, privileges, restrictions and conditions attaching to any other
class or series of shares, the holders of the Common Shares shall, at the
discretion of the directors, be entitled to receive any dividends declared and
payable by the Corporation on the Common Shares.
3. Subject to the rights, privileges, restrictions and conditions attaching to any other
class or series of shares, upon the liquidation, dissolution or winding-up of the
Corporation or other distribution of the Corporation's assets among its
shareholders for the purposes of winding-up its affairs, the holders of the
Common Shares shall be entitled to receive the remaining assets of the
Corporation.
2007s3s6.4
3B
SCITEDULBs'78"
HYDRO OI\TE LIMITED
(The "CORPORATION")
PREF'ERRED SHARE CLASS TERMS
The Preferred Shares shall, as a class, have attached thereto the following rights,
privileges, restrictions and conditions :
l. The Preferred Shares may, from time to time, be issued in one or more series;
2. The Preferred Shares of each series shall, as to the payment of dividends,
distribution of assets and retum of capital in the event of liquidation, dissolution
or winding up of the Corporation, rank on parity with the Preferred Shares of
every other series and senior to the Common Shares and all other shares ranking
in such regard junior to the Prefened Shares;
3. The directors of the Corporation may from time to time issue Preferred Shares in
one or more series, each series to consist of such number of shares as shall before
issuance thereof be fixed by the directors who (subject as herein provided) shall
at the same time determine the designation, rights, privileges, reshictions and
conditions attaching to the Preferred Shares of such series including, without
limiting the generality of the foregoing the rate of preferential dividends, the
dates of payment thereof, the redemption price and terms and conditions of
redemption (if any), the conversion rights (if any), the participation rights (if any)
and any sinking fund, purchase fund or other provisions attaching to the Preferred
Shares of such series, the whole subject to the issuance of a certificate of
amendment in accordance with the Bustness Corporations lcl (Ontario); and
4, Subject to the Business Corporations Act (Ontaio), the holders of the Prefened
Shares or ofa series thereofshall not be entitled as holders ofsuch class or series
to receive notice of or to attend any meeting of the shareholders of the
Corporation or to vote at any such meeting except that votes may be granted to a
series of Preferred Shares when dividends are in arrears on any one or more
series; such voting rights, if any, will be determined by the applicable series
provisions.
t9907556.6
071 16E (06/2007)
4
8. The issue, lransfer or ownership of shares is/is not restricted and the restrictions (if any) are as follows:
L'6mission, le tnnsfed ou la propr6td d'aclions es/n'est pas restreint. Les restnbtbns, s'il y a lieu, sonl les suivanles
See Schedule 8A - Ownership Restrictions
4A
SCHEDULE "8A"
OWNERSHIP RESTRICTIONS
1. INTERPRETATION AND DET'INITIONS
l.l In this Schedule "8A":
1.1.1 The terms "company" and "person" have the meanings given to those terms,
respectively, in the Securities Act (Ontario) ("OSA"), as now enacted or as the
same may be from time to time amended, varied, replaced, restated, re-enacted or
supplemented.
1.1.2 The term o'control" and the phrase "acting jointly or in concert" are to be
intelpreted in a manner that is consistent with the interpretation of that phrase as
used in Part )O( of the OSA,
1.1.3 All terms otherthan those referred to in subsections 1.1.1 and 1.1.2 and which are
not otherwise defined in this Schedule "8A" have the meanings given to those
terms in the OSA or the Business Corporations Act (Ontario) ("OBCA'),
respectively, provided that in the event of any inconsistency between a definition
contained in the OSA and a definition contained in the OBCA, the definition
contained in the OSA shall prevail.
1.1.4 Except where the context requires the contrary, words importing the singular shall
include the plural and vice versa and words importing gender shall include
masculine, feminine and neuter genders.
1.2 In this Schedule "8A":
o'Affected Shareholders" has the meaning set out in section 11.2;
"Amendments" has the meaning set out in section 2.2;
"directors' determination", or "as determined by the directors of the Corporation"
and similar expressions mean a deterrnination made by the directors of the Colporation in
accordance with section 12;
"Electricity Act" means the Electricity Act, /998 (Ontario);
"excess Voting Securities" means the number of Voting Securities beneficially owned or
over which control or direction is exercised in excess of the maximum number of Voting
Securities that could be beneficially owned or over which control or direction could be
exercised in compliance with the share constraint;
"net proceeds of sale" has the meaning set out in section 7.3;
"OBCA" has the meaning set out in section 1.1.3;
1.3
4B
*OSA" has the meaning set out in section 1.1. i;
"Province" means the Minister as defined in the Elechicity Act on behalf of Her Majesty
in right of Ontario;
"redemption price" has the meaning set out in section 8.2;
"sell-down notice" has the meaning set out in section 5.1;
"share constraint" has the meaning set out in section 3.2;
"shareholder default" has the meaning set out in subsection 5.1.4;
"shareholder's declaration" means a declaration made in accordance with section 13;
"suspension" has the meaning set out in section 6.1 and "suspend", "suspended" and
similar expressions have comesponding meanings; and
"voting security" has the same meaning as voting security in the Electricity Act; and
"Voting Security" means any voting security issued by the Corporation,
For greater certainty, no person or company is presumed to be acting jointly or in concert
with any other person or company for purposes of this Schedule "8A" solely by reason
thal one of them has given the other the power to vote or direct the voting of Voting
Securities of a class or series of Voting Securities at a meeting of the holders of that class
or series under a revocable proxy where:
1 .3.1 the prory is solicited solely by means of an information circular issued in a public
solicitation of proxies that is made in respect of all Voting Secwities of that class
or series and in accordance with applicable law;
1.3.2 the proxy is solicited but no information circular is required to be issued under the
OSA or the OBCA; or
1.3.3 the proxy is not solicited.
1.4 For the purposes of this Schedule "8A":
1.4.1 where two or more persons or companies acting jointly or in concert beneficially
own or exercise control or direction over Voting Securities, the number of Voting
Securities beneficially owned or over which control or direction is exercised by
each person or company shall include the number of Voting Securities
beneficially owned or over which control or direction is exercised with those
other persons or companies; and
I.4.2 references to Voting Securities "held by" a person or company are to Voting
Securities beneficially owned or over which control or direction is exercised by
that person or company.
I9346615.1 r
2.2
4C
1.5 Where Voting Securities are registered in the name of a depositary that does not
beneficially own, or, except for purposes of complying with this Schedule "8A", exercise
control or direction over, Voting Securities, then, unless explicitly stated otherwise or
unless the context otherwise requires, references in this Schedule "8A" to the "registered
holder" refer to the depositary in its capacity as the registered holder solely of the Voting
Securities beneficially owned, or over which confuol or direction is exercised, by a
particular person or company or a particular combination of person or companies,
referenced in this Schedule "8A" and not of all the Voting Securities registered in the
name of the depositary.
2, REGULATION
2.t The Coqporation has imposed the restrictions on the transfer and ownership of the Voting
Securities set out in this Schedule "8A" for the purposes of ensuring that the Corporation
complies with section 48.2 of the Electricity Act.
ln the event that the provisions of section 48.2 of the Electricity Act are from time to time
amended, varied, replaced, restated, re-enacted or supplemented (the "Amendments'),
and the Amendments are inconsistent with this Schedule "8A", the Amendments are
deemed to be incorporated in this Schedule "8A" from their effective date, without, for
greater certainty, any approval by the holders of Voting Securities, and the Amendments
supersede the provisions of this Schedule'08A" to the extent of the inconsistency.
On the date that the Corporation is not required to constrain the transfer or ownership of
its Voting Securities for the purposes identified in section 2,1 or otherwise, this Schedule
"8A" shall be deemed to be deleted in its entirety from the Articles of the Corporation
without, for greater certainty, any approval by the holders of Voting Securities and this
Schedule "8A"shall be of no further force or effect as and from that date.
2.3
2.4 In the event that this Schedule "8A" is amended as provided for in section 2.2 or is
deemed to be deleted in accordance with section 2.3, the directors of the Corporation
shall restate the Articles of lncorporation of the Corporation, as amended from time to
time, to reflect the amendment or deletion within thirry (30) days of such amendment or
deletion, without, for greater certainty, any approval by the holders of Voting Securities.
The Corporation shall, within fifteen (15) days of the effective date of restatement of the
Articles, give written notice of the restatement to each registered holder of Voting
Securities registered as of the close of business on the effective date of the restatement.
The accidental failure or omission to give the notice to one or more of the holders shall
not affect the validity of the provisions of this section 2.4.
3. SHARE CONSTRAINT
3,1 No person or company, and no combination of persons or companies acting jointly or in
concert, may beneficially own or exercise confool or direction over more than l0 per cent
of any class or series of Voting Securities. However this reskiction does not apply with
respeet to Voting Securities held by the Province.
I 9345615. I l
4.1
4D
3.2 The prohibition set out in section 3.1 is referred to in this Schedule "8A" as the "share
constraint".
3.3 The share constraint does not apply to an undenvriter who holds Voting Securities solely
for the pupose of distributing Voting Securities to purchasers who comply with
section 3.1.
4. CONTRAVENTION OF TIIE SHARE CONSTRAINT
In the event of a directors' determination, whether based on a review of the securities
registerc of the Corporation or otherwise, that any person or company or any combination
of persons or companies is in contavention of the share constraint:
4.1.1 the Corporation shall not accept any subscription for Voting Securities from that
person or company or any person or company forming part of that combination;
4.1.2 the Corporation shall not issue any Voting Securities to that person or company or
any person or company forming part of that cornbination;
4.1.3 the Corporation shall not register or otherwise recognize the transfer of any
Voting Securities to that person or company or any person or company forming
part of that combination;
4.1.4 no person or cbmpany may, in person or by proxy, exercise the right to vote any
of the Voting Securities held by that person or company or any person or
company forming part of that combination;
4.1.5 subject to section 11,1, the Corporation shall not declare or pay any dividend, or
make any other distibution:
4.1.5.1 on any excess Voting Securities held by that person or company or any
person or company forming part of such combination; or
4.1.5.2 on all of the Voting Securities held by that person or company or any
person or company forming part of such combination if there is a
directors' determination that the contravention of the share constraint was
intentional, unless there is a directors' determination that it would be in
the best interests of the Corporation to make the distribution in respect of
some part or all of the non-excess Voting Securities;
and any entitlement to that dividend or other distribution shall be forfeited; and
4.1.6 the Corporation shall send a sell-down notice to the registered holder of the
Voting Securities held by that person or company or any person or company
forming part of such combination.
4.2 In the event of a directors' determination, whether based on a review of the securities
registers of the Corporation or otherwise, that any person or company or combination of
19346615.r I
4,3
4E
persons or companies, after any proposed subscription for or issue or foansfer of Voting
Securities, would be in contravention of the share constraint, the Corporation shall not:
4.2.1 accept the proposed subscription for Voting Securities from;
4.2-2 issue the proposed Voting Securities to; or
4.2.3 register or otherwise recognize the proposed transfer of any Voting Securities to;
that person or company or any person or company forming part of that combination.
In the event of a directors' determination that during any prior period or at any prior time
any person or company or any combination of persons or companies is or was in
contravention of the share constraint, the directors of the Corporation may, where there is
a directors' determination that it would be in the best interests of the Corporation, also
make a directors' determination that:
4.3,1 any votes cast, in person or by proxy during that period or at that time in respect
of the Voting Securities held by that person or company or any person or
company forming part of that combination shall be disqualified and deemed not to
have been cast; and
4.3.2
5. SELL-DOWN NOTICE
5.1 Any notice (a "sell-down notice') required to be sent to a registered holder of Voting
Securities under subsection 4. 1.6:
5.1.1 shall specifr in reasonable detail, based on the information then available to the
directors of the Corporation, the nature of the contravention of the share
constraint, the number of Voting Securities determined to be excess Voting
Securities and the consequences ofthe contravention specified in section 4;
5.1,2 shall request an initial or further shareholder's declaration;
r9346615.1 r
subject to section 11.1, each such person or company or each person or company
fonning part of such combination is liable to the Corporation to restore to the
Corporation the amount of any dividend paid or disfribution received during that
period:
4.3.2.1on the excess Voting Securities held by that person or company and of
each other person or company forming part of that combination; or
4.3.2.2 on all of the Voting Securities held by that person or company or any
person or company formrng part of that combination in the event of a
directors' determination that the contravention of the share constraint was
intentional.
4F
5.1.3 shall specify a date, which shall be not less than 45 days after the date of the sel[-
down notice (srrch date specified, the "response date"), by which the excess
Voting Securities are to be sold or disposed of; and
5.1.4 shall state that unless the registered holder either:
5, 1.4.1 sells or otherwise disposes of the excess Voting Securities by the response
date on a basis that does not result in any contravention of the share
constraint and provides to the directors of the Colporation, in addition to
the shareholder's declaration requested under subsection 5.1.2, writien
evidence satisfactory to the directors of the Corporation of that sale or
other disposition; or
5.l.4.2provides to the directors of the Corporation by the response date, in
addition to the shareholder's declaration requested under subsection 5.1.2,
written evidence satisfactory to the directors of the Corporation that there
is no contravention ofthe share constraint;
a default (a "shareholder default") shall occur that shall result in the
consequence of suspension under section 6 and may result in the consequence of
sale in accordance with section 7 or redemption in accordance with section 8, in
each case without fuither notice to the registered holder, and shall specifr in
reasonable detail the nature and timing of those consequences.
In the event that, following the sending of a sell-down notice, written evidence is
submitted to the directors of the Corporation for purposes of subsection5.l.4.2 by the
response date, the directors of the Corporation shall assess the evidence as soon as is
reasonably practicable and shall give a second notice to the person or company
submitting the evidence as soon as is reasonably practicable after receipt of the evidence
stating whether the evidence has or has not satisfied the directors of the Corporation that
there is no contavention of the share constraint. If the evidence has satisfied the directors
of the Corporation, the sell-down notice shall be cancelled and the second notice shall so
state. If the evidence has not satisfied the directors of the Corporation, the second notice
shall reiterate the statements required to be made in the sell-down notice under
subsections 5.1.3 and 5.1.4 provided the response date for the second notice shall be the
later of: (i) the response date specified in the first notice and (ii) third business day
following the date that the second notice is given.
6. SUSPENSION
6,1 In the evEnt of a shareholder default in respect of any registered holder of Voting
Securities, then, without firrther notice to the registered holder:
6,1.1 all of the Voting Securities of the registered holder shall be deemedto be struok
frorn the securities register of the Corporation;
6.1.2 no person or company may, in person or by proxy, exercise the right to vote any
of those Voting Securities;
5.2
t934661 5. I I
4G
6.1 .3 subject to section 1 1.1, the Corporation shall not declare or pay any dividend, or
make any other distribution, on any of those Voting Securities and any
entitlement to a dividend or other distribution shall be forfeited;
6.1.4 the Corporation shall not send any form of proxy, information circular or financial
statements of the Corporation or any other general communication from the
Corporation to any person or company in respect of those Voting Securities; and
6.1.5 no person or company may exercise any other right or privilege ordinarily
attached to those Voting Securities.
(All of the foregoing consequences of a shareholder default are referred to in this
Schedule "8A" as a "suspension".) Notwithstanding the foregoing, a registered holder of
suspended Voting Securities shall have the right to transfer those Voting Securities on
any securities register of the Corporation on a basis that does not result in contravention
ofthe share conshaint.
6.2 The directors of the Corporation shall cancel any suspension of Voting Securities of a
registered holder and reinstate the registered holder to the securities register of the
Corporation for all purposes if they make a directors' determination that, following the
cancellation and reinstatement, none of those Voting Securities will be beneficially
owned, controlled or directed in contravention of the share constraint. For greater
certainty, any reinstatement shall permit, from and after the reinstatEment, the exercise of
all rights and privileges attached to the Voting Securities so reinstated, but subject to
section 1 1.1, shall have no retroactive effect.
7. SALE
7.1 In the event of a shareholder default in respect of any registered holder of Voting
Securities, the Corporation may choose by directors' determination to sell, on behalf of
the registered holder, the excess Voting Securities of that registered holder, without
fuither notice to that registered holder, on the terms set out in this section 7 and section 9.
7.2 The Corporation may sell any excess Voting Securities in accordance with this section 7
7.2.1 on the Toronto Stock Exchange; or
7.2.2 if the Voting Securities are not then listed on the Toronto Stock Exchange, on any
other stock exchange or organi2sd market on which the Voting Securities are then
listed or traded as the directors of the Corporation may choose by directors'
determination; or
7.2,3 if the Voting Securities are not then listed on any stock exchange or traded on any
organized market, in any other manner as the directors of the Corporation may
choose by directors' determination.
7.3 The "net proceeds of sale" of excess Voting Securities sold in accordance with this
section 7 shall be the net proceeds from such sale after deduction of any commission, tax
193466t5.1 I
7.4
4H
and other costs of sale (including, but not limited to, the Corporation's reasonable legal
fees).
The Corporation has the requisite legal power and authority for all purposes of a sale of
excess Voting Securities in accordance with this section, as if it were the registered
holder and beneficial owner of the Voting Securities being sold.
8. REDEMPTION
8.1 In the event of a shareholder default in respect of any registered holder of Voting
Securities and in the event of a directors' determination either ttrat the Corporation has
used reasonable efforts to sell excess Voting Securities in accordance with section 7 but
that the sale is impracticable or that it is likely that the sale would be contrary to the best
interests of the Corporation, the Corporation may choose by directors' determination,
subject to applicable law, to redeem the excess Voting Securities of the registered holder,
without further notice to the registered holder, on the terms set out in this section 8 and
section 9.
8,2 The "redemption price" paid by the Corporation to redeem any excess Voting Securities
in accordance with this section 8 shall be:
8.2.1 the average of the closing prices per share of the Voting Securities on the Toronto
Stock Exchange (or, if the Voting Securities are not then listed on the Toronto
Stock Exchange or if the requisite trading of Voting Securities has not occurred
on the Toronto Stock Exchange! any other stock exchange or any other organized
market on which the requisite trading has occurred as the directors of the
Corporation may choose by directors' determination) over the last 10 trading days
on which at least one board lot of Voting Securities has traded on the Toronto
Stock Exchange (or other stock exchange or other organized market) in the period
ending on the trading day immediately preceding the date fixed for redemption by
the directors pursuant to a directors' determination; or
8.2.2 if the requisite trading of Voting Securities has not occurred on any stock
exchange or other organized market, on any basis the directors of the Corporation
may choose by directors' determination;
less any commission, tax and other costs of redemption (including, but not limited to, the
Corporation's reasonable legal fees).
9. PROCEDURES RELATING TO SALE AND RE,DEMPTION
9.1 In the event of any sale or redemption of excess Voting Securities in accordance with
sections 7 or 8, respectively, the net proceeds of sale or the redemption price;
respectively, constitute trust firnds and the Corporation shall deposit the funds in a special
trust account in any bank or frust corporation in Canada selected by it. The Corporation
may commingle the trust funds with other such trust funds. The amount of the deposit,
together with any income earned thereon from the beginning of the month next following
the date of the receipt by the Corporation of the net proceeds of sale or the redemption
I 934661 5. I I
9.2
9.3
9.4
4T
price, less any taxes on the income and the reasonable costs of adminisftation of the trust
fund shall be payable to the registered holder of the excess Voting Securities sold or
redeemed on presentation and surrender by the registered holder to the Corporation or to
the trust corporation to which the trust funds are transferred in accordance with
section 9.6 of the certificate or certificates representing the excess Voting Securities if
such certificate or certificates have been issued or, ifno certificate has been issued, other
evidence of ownership of the excess Voting Securities satisfactory to the Corporation or
its registrar and transfer agent. A receipt signed by the registered holder shall be a
complete discharge of the Corporation, or the trust corporation to which the trust funds
are transferred in accordance with section 9.6, in respect of the trust funds and income
eamed on these trust funds paid to the registered holder.
From and after any deposit made under section9,l, the registered holder shall not be
entitled to any of the remaining rights of a registered holder in respect of the excess
Voting Sectuities sold or redeemed, other than the right to obtain a certificate or other
evidence of ownership representing the excess Voting Securities for the purpose only of
tendering it to receive trust funds in respect of the excess Voting Securities sold or
redeemed and to receive the trust funds on presentation and surrender of the certificate or
certificates or other evidence of ownership satisfactory to the Corporation or its registrar
and transfer agent representing the excess Voting Securities sold or redeemed.
If a part only of the Voting Securities represented by any certificate is sold or redeemed
in accordance wittr section 7 or 8, respectively, the Corporation shall, on presentation and
surrender ofthat certificate and at the expense and request ofthe registered holder, issue
a new certificate representing the balance of the Voting Securities.
As soon as is reasonably practicable after, and, in any event, not later than 30 days after,
a deposit made under section 9.1, the Corporation shall send a notice to the registered
holder of the excess Voting Securities sold or redeemed and the notice shall state:
9.4.1 that a specified number of Voting Securities has been sold or redeemed, as the
case may be;
9.4,2
9.4.3
9.4.4
9.4.s
the amount of the net proceeds of sale or the redemption price, respectively;
the name and address of the bank or kust company at which the Corporation has
made the deposit of the net proceeds of sale or the redemption price, respectively;
all other relevant particulars of the sale or redemption, respectively; and
that to receive the net proceeds of sale or the redemption price, the registered
holder must present and surrender to the Corporation the certificate or certificates
representing the excess Voting Securities so sold or redeemed if such certificate
or ceftificates have been issued or, if no certificate has been issued, other
evidence of ownership of the excess Voting Securities satisfactory to the
Corporation or its registrar and transfer agent.
I 93466t 5. I I
0q
9.6
4t
The accidental failure or omission to give the notice to the registered holder shall not
affect the validity of the sale or redemption of Voting Securities completed in accordance
with section 7,8 or 9.
For greater certainty, the Corporation may sell or redeem excess Voting Securities in
accordance with section 7 or 8, respectively, despite the fact that the Corporation does not
possess the certificate or certificates representing the excess Voting Securities at the time
of the sale or redemption. If, in accordance with section 7, the Corporation sells excess
Voting Securities without possession of the certificate or certificates representing the
excess Voting Securities, the Corporation shall issue to the purchaser of such excess
Voting Securities s1 i1s nsminee a new certificate or certificates or other evidence of
ownership representing the excess Voting Securities sold. If, in accordance with section 7
or section 8, the Corporation sells or redeems excess Voting Securities without
possession of the certificate or certificates representing the excess Voting Securities and,
after the sale or redemption, a person or company establishes that it is a bona fide
purchaser of those sarne excess Voting Securities also sold or redeemed by the
Corporation, then, subject to applicable law:
9.s.1 the excess Voting Securities beneficially owned by the bona fide purchaser are
deemed to be, from the date of the sale or redemption by the Corporation, as the
case may be, validly issued and outstanding Voting Securities in addition to the
excess Voting Securities sold or redeemed; and
9.5.2 notwithstanding section9.2, the Corporation is entitled to the trust funds
deposited under section 9.2 and, in the case of a sale in accordance with section 7,
shall add the amount of the deposit to the stated capital account for the class and
series, if applicable, of Voting Securities issued;
provided that if the steps contemplated by sections 9.5.1 and 9.5.2 are not permitted by
applicable law, then the Corporation shall take other reasonable steps to rectify the
circurnstances ofsuch bona fide purchaser.
The Corporation may transfer any trust fund established under this section 9 and its
administration to a trust corporation in Canada registered as such under the laws of
Canada or a province or a territory thereof, and the Corporation is then discharged ofall
further liability in respect of the trust fi:nd. The trust funds described in section9.l
together with any income earned on the trust funds, less any taxes and reasonable costs of
administration, that has not been claimed for a period of 10 years after the date of the sale
or redemption by the person or company entitled under section 9 to receive such funds is
forfeited to the Corporation.
EXCEPTIONS
Notrvithstanding section 3, the share constraint does not apply in respect of Voting
Securities that are held:
10.1.1 by any pemon or company or combination of persons or companies by way of
security only provided such person or company does not exercise the votes
10.
10.1
19346615.1I
4K
attaching to such Voting Securities and does not otherwise exercise control or
direction over such Voting Securities, but only in respect of such person or
company or combination of persons or companies;
by aoy person or company or combination of persons or companies who
beneficially owns or exercises conhol or direetion over such shares by virtue of
having realized on a security interest in the Voting Securities but who is in the
process of disposing of the Voting Securities, for a reasonable period of time to be
determined by a directors' determination to facilitate such disposition, provided
that during such period of time the number of votes attached to those Voting
Securities shall be reduced to a number that is the largest whole number of votes
that may be attached to the Voting Securities which that person or company or
combination of persons or companies could beneficially own or exercise control
or direction over from time to time in compliance with the share conshaint or
for greater certainty, by any person or company that is acting in relation to the
Voting Shares solely in its capacity as an intermediary in the payment of funds or
the holding or delivery of securities, or both, in connection with trades in
securities and that provides centralized facilities for the clearing of trades in
securities, but only in respect of that person or company.
SAVING PROVISIONS
10.1,.2
10.1.3
11.
11.1 Notwithstanding any other provision of this Schedule "8A":
11.1.1 the dircctors of the Corporation may choose by directors' determination to pay a
dividend or to make any other disfribution on Voting Securities that would
otherwise be prohibited by any other provision of this Schedule '08A" where there
is a directors' determination that the contravention of the share constraint that
gave rise to the prohibition was inadvertent or of a technical nature and such
contravention of the share constraint has been remedied within a reasonable
period of time, as determined by the directors; and
ll.l.2 where a dividend has not been paid or any other distribution has not been made on
Voting Securities as a result of a directors' determination of a contravention of the
share consffaint, ot where the amount of a dividend or any other distribution has
been restored to the Corporation under subsection 4.3.2 as a result of a directors'
detennination of a conhavention of the share constraint, the directors of the
Corporation shall declare and the Corporation shall pay the dividend, make the
dishibution, or refund the restored amount to the affected shareholder,
respectively, if there is a subsequent directors' determination that no
contravention occurred.
11.2 In the event thatthe Corporation suspends or redeems Voting Securities in accordance
with section 6 or 8, respectively, or otherwise redeems, purchases for cancellation or
otherwise acguires Voting Securities, and the result of that action is that any person or
company or any combination of persons or companies who, prior to that action, were not
I934661 5. r l
4L
in contravention of the share constraint are, after that action, in contravention (the
"Affected Shareholders"), then, notwithstanding any other provision of this Schedule
,08A",
11.2.1 subject to section 11.2.3, the sole consequence of that action to each Affected
Shareholder, in respect of the Voting Securities that Affected Shareholder
beneficially owned or over which control or direction is exercised at the time of
that action, shall be that the number of votes attached to those Voting Securities
will be reduced to a nurnber that is the largest whole number of votes that maybe
attached to the Voting Securities which that Affected Shareholder could
beneficially own or exercise control or direction over from time to time in
compliance with the share eonstraint, as determined by directors' determination;
11.2.2 the directors of the Corporation shall identify, by directors' determination, the
Affected Shareholders and the Corporation shall give written notice to each
Affected Shareholder so identified, within fifteen (15) days of the directors'
determination, of the fact that the Affected Shareholder is in contravention of the
share constraint and is entitled to rely on the protection provided in section ll.2.l;
and
I 1.2.3 the protection afforded to any Affected Shareholder in section 1 1.2.1 is effective
from the date the Affected Shareholder is in contravention of the share constraint
as a result of the actions of the Corporation described above, up to and including
the date that is 180 days after that date.
The accidental failure or omission to give the notice referred to in section 11.2.2 to one or
more of the Affected Shareholders shall not affect the validity of the provisions of this
section 11.2.
i 1.3 Notwithstanding any other provision of this Schedule "8A", a contravention of the share
constaint shall have no consequences except those that are expressly provided for in this
Schedule "8A" or under applicable law. For greater certainty but without limiting the
generality of the foregoing:
I 1.3.1 no hansfer, issue or ownership of, and no title to, Voting Securities;
11.3.2 no resolution of shareholders (exceptto the extent that the result is affected as a
result of a directors' determination under subsection 4,3.1); and
11.3.3 no act of the Corporation, including any transfer of property to or by the
Corporation;
will be invalid or otherwise affected by any contravention of the share constraint.
12.
12.1
DIR.ECTORS' DETERMINATIONS
The directors of the Corporation shall have the sole right and authority to administer the
provisions of ttris Schedule "8A" and to make any determination required or
l93466rs.lr
4M
contemplated under this Schedule '08A". In so acting, the directors of the Corporation
shall enjoy, in addition to the powers set out in this Schedule '08A", all of the powers
necessary or desirable, in their sole opinion, to carry out the intent and purpose of this
Schedule "SA" including, without limitation, the power to require:
12.1.1 the filing ofa shareholder's declaration under section 13;
12.I.2 the production of all documents in the possession, power or control of the maker
of the shareholder's declaration touching or conceming the subject of the
shareholder's declaration, together with certification that such production has
been made;
12.1.3 the response to such written interrogatories concerning the subject of the
shareholder's declaration as the directors of the Corporation may determine to ask
the maker of the shareholder's declaration; and
12.1.4 the attendance before the directors of the Corporation of the maker of the
shareholder's dEclaration or such other persons or companies related thereto as
the directors may determine, for the purpose of responding to questions from the
directors of the Corporation conceming the subject of the shareholder's
declaration.
12.2 In the event of a directors' determination that a person or company has failed to provide a
complete, accurate and timely response to a request for information that the directors of
the Corporation have made pursuant to their powers under sectionl2.l, the directors of
the Corporation may draw an inference adverse to the interests of that person or
company.
12.3 The directors of the Corporation shall make, on a basis which is timely in the
circumstances, all determinations neeessary for the adrninistration of the provisions of
this Schedule "8A" and, without limitation, if the directors of the Corporation consider
that there are reasonable grounds for believing that a contravention ofthe share constraint
has occurred or will occur, the directors of the Corporation shall make a determination
with respect to the matter. All directors' determinations shall be conclusive, final and
binding except to the extent modified by any subsequent directors' determination.
Notwithstanding the foregoing, the directors of the Corporation may delegate, in whole or
in part:
12.3.1 their power to make a directors' determination in respect of any particular matter
to a committee of the board of directors of the Corporation subject to section 127
of the OBCA; and
12.3.2 any of their other powers under this Schedule "8A" subject to sections 127 and
133(a) of the OBCA.
12.4 In administering the provisions of this Schedule "8A", including, without limitation in
making any directors' determination required or contemplated under this Schedule "8A",
the directors of the Corporation shall act honestly and in good faith with a view to the
r 93466t 5. r l
4N
best interests of the Corporation and shall exercise their business judgment. ln this
regard, the directors of the Coryoration shall not owe fiduciary duties or any duty of care
to those who could be affected by their determinations, although the directors of the
Corporation shall endeavour to make their determinations by way of a process that is fair
in all the circumstances to those who could reasonably be expected to be affected.
12.5 The directors of the Corporation shall not be considered to be subject to a conflict of
interest in administering the provisions of this Schedule "8A" and there shall be no
reasonable apprehension of bias by reason only that their own tenure as directors or
officers of the Corporation could be affected directly or indirectly by a determination
they are to make pursuant to the provisions of this Schedule "8A".
12.6 In administering the provisions of this Schedule "8A", the directors of the Corporation
may rely on any information on which the directors of the Corporation consider it
reasonable to rely in the circumstances. Without limitation, the directors of the
Corporation may rely upon any shareholder's declaration, the securities register of the
Corporation, the knowledge of any director, officer, employee or agent of the
Corporation or any advisor to the Corporation and the opinion of counsel to the
Corporation.
12.7 Provided that the directors of the Corporation have acted honestly and in good faith, no
shareholder of the Corporation or any other interested person or company shall have any
claim or action against the Corporation or against any director or officer of the
Corporation nor shall the Corporation have any claim or action against any director or
offrcer of the Corporation arising out of or in relation to any act (including any omission
to act) performed under or in pursuance of the provisions of this Schedule '08A", and, for
greater certainty, neither the Corporation nor any director or officer shall be liable for any
damages or losses related to or as a consequence ofany such act or any breach or alleged
breach of the provisions of this Schedule "8A". To the extent that, in accordance with
sections 12.1 or 12.3, arry other person exercises the powers of the directors of the
Corporation under these provisions, this section 12.7 applies mutatis mutandis.
12.8 Any directors' determination required or contemplated by this Schedule "8A" shall be
expressed and conclusively evidenced by a resolution ofthe directors ofthe Corporation,
or of any committee of the directors exercising the powers of the directors of the
Corporation under this Schedule "8A" pursuant to section 12.3.1, duly adopted.
13.
13. I
SHAREHOLDER' S DECLARATIONS
For purposes of monitoring the compliance with and of enforcing the provisions of this
Schedule "8Ao', the directors of the Corporation may require that any registered holder or
beneficial owner of Voting Securities, or any other person or company of whom it is, in
the circumstances, reasonable to make a request (including, without limitation, any
person who wishes to have a transfer of a Voting Security registered in the name of, or to
have a share issued to, that person), file with the Corporation or its registrar and transfer
agent a completed shareholder's declaration. The directors of the Corporation shall
approve from time to time written guidelines with respect to the nature of the
1934661 5.t r
40
shareholder's declaration to be requested, the times at which shareholder's declarations
are to be requested and any other relevant matters relating to shareholder's deslarations.
13.2 A shareholder's declaration shall be in the form from time to time approved by the
directors of the Corporation under section 13.1 and, without limitation, may be required
to be in the form of a simple declaration in writing or a statutory declaration under the
Evidence Act (Ontaio). Without limitation, a shareholder's declaration may be required
to contain information with respect to:
13.2.1 whether the person or company is the beneficial or,vner of or exercises control or
direction over, particular Voting Securities or whether any other person or
company is the beneficial owner of, or exercises control or direction over, those
Voting Securities; and
13,2.2 whether the person or company is acting joinfly or in concert with any other
person or company or is part of a combination of persons or companies acting
jointly or in concert with respect to any Voting Securities, including whether the
person or company and any other person or company are parties to an agreement
or an arrangement, a purpose of which is to require them to act in concert with
respect to their interests, direct or indirect, in the Corporation.
MISCELLANEOUS14,
t4.t
14.2
The invalidity or unenforceability of any provision, in whole or in part, of this Schedule
"8A" for any reason shall not affect the validity or enforceability of any other provision
or part thereof.
Subject to the OBCA and the Electricity Act, the directors of the Corporation may make,
amend or repeal any rules or by-laws they deem necessary or appropriate to administer
the share constraint.
14.3 In addition to dealing with registered holders of Voting Securities in the administration of
the provisions of this Schedule "8A", the directors of the Corporation and the
Corporation may also deal with the beneficial owner of Voting Securities if the identity
of the beneficial owner is known to the directors of the Corporation and the Corporation
as a result of a directors' determination or otherwise. Without limiting any other
provision of this Schedule "8A", where the identity of the beneficial owner is unknown,
the directors of the Corporation may require the registered holder to assist the
Corporation in ensuring complianoe by the beneficia.l owner with the share constraint.
l 93465t 5.1 I
071 1 6E (06/2007)
5
9. Other provislons if any:
Autres disposilions, s'il Y a lieu
None.
07 1 16E (06/2007)
Signature / signature
10. The names and addresses of the incorporators are:
Aroms et adr.esses des fondaleurs.'
Firsl name. middle narnes and sumame or corporate name
Pftr1om, auhes pftnoms et nom de famille ou
denomination sociale
Full address for service or if a corporalion, the address of
the registered or head office giving slreel & No. or R.R.
No., municipality, province, country and postal code
Domicile 6lu au complet ou, dans le cas d'une soci6b,
adresse du sicge social ou adresse de l'itablissement
principal, y compris la rue et le numero ou le numCro de
la R.R., Ia municipalitC, la province, le pays et le code
D
Angela Carberry 79 Wellington Skeet W., 30th Floor, TD South Tower
Toronto, ON MsK 1N2
These arlicles are signed in duplicate.
Les prdsenrs sfatuts sonl s,gn6s en double exemplairc.
Full name(s) and signature(s) of incorporator(s). In the case of a corporation set out the name of the corporation and the
name and otfice of the person signing on behalf of the corporation
au complel et signaturc(s) du ou des fondateurs. Si re fondaleur est une soci6t6, indiquer la dCnomination sociale
et le nom et le titrc de la personne signant au nom de la socie|3
Angela Carberry
Name of incorporator (or corporation name & signatories name and office)
Nom du fondateur (ou dCnonination sociale et nom et titte du signataire)
Signature / signature Name ol incorporator (or corporation name & signatories name and ofiice)
Nom du fondateur (ou denomination sociale et nom et titre du signatairc)
Signature / signature Name of incorporator (or corporation name & signatories name and office)
Nom du tondateur (oa denomination sociale et nom et titre du signalalre)
Name of incorporator (ol corpolatlon name & slgnatories name and office)
Nom du fondaleur (ou denomination sociale et nom et titre du signataire)
EXHIBIT B
Q.{
People, Politics
Rrblic Pmper
Ken Billington
Itt,ofrle, Politics dr
f)uhlic Port'er
llx, srrorrg 1'ublic power mo',ement in the Pa-
, ilir Nortlrs't'^st began as a protest agairst the
alrrrn'r ,rf the monopoly prlvate porver companies,
u'lri' h u,.'r,' owned by eastern holding companies,
more interested in making money than in provld-
ing good electric service.
Electric rates were exorbitant for people in thc
cities, but they rvere the lucky ones. Farmers'rvives
were cooking on wood stoves and scrubbing their
clothes on washboards into the late 1930's because
the private companies refused to build lines to rural
areas. ln Washington State, farmers through their
granges joined with labor organizations to do
something about the problem, and in 1930 lnitia-
tive I to the legislature, the basic public porver law,
rvas passed by a statewide vote of the people.
The new law permitted the people of a county
ro create a public urility district and elect local
commissionets to provide not-for,profit utility
service under strict procedures set by the legisla-
turc.
\0ith the election of Franklin D. Roosevelt in
1932, the broad federal public power program got
under way, and the Bonneville Pourer Administra-
rion became the main supplier of power to the
PUDs.
But the private companies did not give up eas,
ily. ln the V/ashlngton State Legislature, they
sought to weaken the public pourer law by intro-
duclng bills at every session to hamstring the pub.
lic utility districts if they could not dissolve them.
ln C, u rgress, they tried to do away with the "prefer-
crue,.'laustl in the BPA law which gives public
lxN'(r uttlirie" firsr rights to buy lorp.crxt Bon.
nlr tlle Jr, nver.
tJntu thi.; l.artltfirld in 1951 came Ken Bil-
Iitrgt,u1, tlrc v,turU ljxuutivt f)irect,rr oftheWrsh-
rrrgrou l)uhlir Iltility f)istricts' A**rr'i;rrir)rr, \\'lr,,
itrtri.l ns a pul{it' Jxrurr krbbyist of legislatr;rr,, -li'
)
I
t,v ,s,
E
I
\
J
Peop[e, Po[f,'[ilcs
Publflc Power
hy
Ken Billington
Washington Public Utilit y Districts' Association
.Srtttlc, Wrshington
ra
Copyright @ 1988 by IGn Billtngton
All rights reservcd.
Library of Congres Catalog Card No.: g?-51001
ISBN : 0.9619682-0.6 (Cloth)
ISBN: 0-96t%82-I4 (Iaper)
Library of Congresc Caaloging.in.publication Date
Billington, IGn, 1916-
Pcople, polidcs & public power
lncludes index.
l. Electrlc uriliries-Covernment ownership_
Vashingron (State) - History. 2. Electric utilitL _
lovmnmgnt orvnership-Oygon- History. l. public uriliry
districts - Washington (State) - Hisrory. 4. public u tility
distticts - Oregon - Hisrory. l. r00ashingon public UtilityDistrics'Associarion. IL Title, lll. Titler pcople,
politics, and public porver.
HD9685.U6WI9 1988 363.6'2'09?97 87-5t001rsBN 0-9619682-0{
ISBN 0.9619682.14 Gradc pbk.)
First edition.
Prilrted in the U.S.A.
Prefoce vii
1 Lg?A,1951: Backgror
Tlw Public Uriliry Disrri
PUD Political Actirrisr, I
LocalPUD Employrnent
2 Public Power Activiry
National
Puuu tWarsoJ the 1940s
Money in Polints 51
3 LgsL. tg56Era: Face.l
1951 - 1952 57
1953 - 1954 75
1e55. 1956 r I0
4 lBs? - t96zBra;The (
1957-19s8 130
195q - 1960 154
1961 - 1962 175
5 D$.1968Era:Thel
1963 - 1964 194
1965 " 1966 209
1e67 - 1968 240
6 Lg6g " L9?4Braz"Peace
Private Power
1969- 1970 277
1971. 1972 307
1973 - 1974 336
7 Lg?s - 1981 Era: Power
Act
1975 - 1976 351
1977.1978 372
1979- 1980 384
I98I - Retirement 398
8 WPPSS-VictimorCulp
I Pubtic Power Pioneers ar
lndex 461
l
G
J
With acrive negotiations going on for three eastern Washington PLIDs
to acquire the common stock of Washington V/ater Power from AP&L, the
ldaho Legislature rushed a law through, under private power urging, mak-
ing it illegal for any PUD to own property in that statc' The law also estab-
lished substantial penalties and 6ues for PUD olficials found guilry of try-
ing to acquirc property for u public utiliry. ln this State, efforts to block the
PUD purchase took the form of legislation providing that the City of Spo-
kane would have a vote on the matter. Proponents of the bill were claiming
rlrat public power was being "rammed down the throats" of the Spokane
people who had never voted for public power. This legislation was sup-
ported by Covernor Arthur B, Langlie, who came from the City crf Seattle
and as its former Mayor had been supportive of Seattle City Liglrt, but felt
strongly thu local people should have the right to vote on whether they
wanted public power. Backed by the Covernor! support, the Senate passed
the bill by a vote of 28 to 17. 'To ofrset this pro-private power legislation, the
PUD forces sponsored a bill mandating that the City of Spokane would
have the riglrt to acquire such properties from the PUDs should the pur-
cha^sc. occur, aud that the city could make rhe purchase by condemning any
such PUD-orvned properties. The issues hounced back and forth between
the Scnate and the House hy means of parliamentary maneuvers unril
March /, when utter confrlsion arose over s statement on the House floor
by a Pierce County rcpresentativc that he and one other nrcmber had been
offered a bribe to support the Spokane Power Bill. His accusatioru resulted
in the investigarion and jailing of the person he named although no direct
link could be establlshed between that person and the private power lobby-
ists rvho were suspecred of being behind the bribe. The result was defeat of
tlrc -Spokane Pcnver llill in the House 55 ro 44 and passage by the L,egislature
of rhe PUD-sporxored lcgislation to make sure rhat if the PUDs' purchase
went for$'ard, rhe people of Spokane could take over the properties in that
c iry.
lc was during thls lcgislativc session that an event took placc which
t'hanged my personal life. Frank Stcwart had left dre V/ashington Public
Utiliry Commissioners'Association in early 1950 to pursue business devel.
opments in Brewster rvhere corurrucrion of the ChiefJtxeph Dam had just
srarted. Replacing Stewarr as Executive Secretary rva.s John McCauley,
u,ho had previously joined thc PUD Association's staff as an editor o[ irs
newsletter. During House coruidcrarion of the public power sponsored bill,
a vote on the House floor rvas sctreduled for a Friday. On Monday of rhar
week, McCauley sent a special notice to the various PUD commissioners
arr'rund the Stare u'hich included a lisr of Housc nrembers whom Mc-
.5tf * PcoPlc, Polrtir-r I hlilic Pwer
{iuuley labeled as being ready to
ir; and a list of those whose intcr
cr:rnmissioners to contact thc lc1
kn tlrcir support. On Friday, jus
wlxr somehorv had obtained a cr
lris fcllow mernbers if they would
0rr tl're matrer. He then procecdcc
lrrrrassing revelation did not hinc
trorr, but shordy thereafter McC
$trhington, D.C., and the Washr
*r:iation was looking for a new E
Because of nry statewide work ,
rrrlunccer work with the old Publ
h*el hclped out ln Olympia to g,
rtlicient PUD opcrati()nr several P
nw ifl was interested in the job. J w
lirred. I moved my family to Seatrl
While I had heen somewhat t
l' rility Commissioners' Associatio
*r v ice corporation now called the
au arc of the sorry financial status ,rlr scene, I found about $300 on l
Irrrncys and a printing 6rm of sevrr{r cmployee, a very efficient an,
du,.. We scrounged around among I
rc, thc,Association and gor enough
u,ritcd several times for my payctrec
rrxrring which I requested rvas hetd
rln I'UD commigsioners and manr
Arsociatlon and that if I had to sp,t
rrr'ouraging the PUD membership t.i' the work I could see nerded do
Iui2, and if necessary to use some I
tlrat if at tfiat time we rvere not a Ielrrvhere for rvork, since I had a fan
rrfi.: and from that low poinr the Assr
p.ro'rdination and service on mutual
rlm Srate ofV/ashington, the pacific I
Facing my responsibility as AssotIrl u'ork, I hoped rhere u,ould be tir
1951_la-56
L
-
E,XHIBIT C
1 .fnnrurr/ 2lJ HOUSD JOUENAL
iloaon to 8u.D.nd DEIB
llqvtd Dy rtfr, Xor&g.
EsoEa.d t!, Mr, ,EurDhY,
FoIl Crtrl rq,ulted {ir followli
E!u,
nla qitstlol tr.tDgi ,'ShoU tlouso B0l No. ?0 D0!t?n
Roll c8tl tuul.t.d ,( ,oUowE:
Eubnu, K(wchmlttqr, lPrytor\ SyoIttL VMdu-
crcu$it-Gef,fney. Glwartnuy, Holm, IfioDcvitt, V!r-
tbtd-59,
l8 paecca,
to trhr SGtratB.tfir tl$a the Spoutor xoucd thi .AppalltrHont Oo&dtttat.
;. XffS--+lo*trnri!0rt8r Smttl\ Vettr. Total-$.
:: .Abscn! orld qlglr1qil-6oifn.y, ewuta.y, Uo}rI\ McDivittr V.mor.:hotal--{.d rar"r-+c. ',.,.i Wbor*poo, tbs Sbrskr d.clu'.a Urlt nor. t.bE trv+thErfiiJtrvrDg vot.d lr t rc OftlD[t1rr, lh. mot or prcvrilao, thr rulcriwt-ro tuponded, ual Eouro Ell! Ivo, !0 w&r rcral-thr.ll[t tlmo by;tluq rllotra lius-Dy $tlo, qnil-t&a thlrd tln! ^t leryth, !$tion byrl.0tion" ual plsord upoD tt! flnal pE.&!t
, llburc O! RcDrctaht4tivc!, Boiic, Id8bo,
l{r. ltporr.rr JNurr!' 22' 1e5L
I movo ' th&t sll tn a, of thc EouEe lnt(rtortn!: wlth tuc lnms-di0.t pEaltg! ol IIou. BUI No. 26 !. rulplralld; t}lt the DoltloDsal gqotlo{i(t. l\rtiolc E ot trc OouEtituUon ot th Etrte ol ldrho,iuqulrlaf rll Etlll to bE Farl E thrc r.vsrrl {oy! Dt dtp!4i.d witI,thli b.irir s c.ua of ur*crcv, onit thct Houlr EtIl No. 20 br r[dtbo ,i!rt ttthc Dy UUc, deo6nd ttrnc bJ llou, snd tl$ thrr{. tlm€ rtluttb, tcotiDtr D, ,octlotr, md b6 put uDo! ltt llnr.l Purtu
i Eotlto Blll No. ?5 wu rold th. riFrt ttmr by UtlG, tlr {.oondrtlm. by trtsr, rnit tlriri tlno jt Isgtb, {.Ction- by irotton. 'init
iDhrccd bt on Ur. ltouac loa frnil rsnsliltrruon.
th!dcoli16,
:r9 EENATD IoURNAL Frnury 2q
Motlom oud lt+tullittonilllotlon to StrBpud IluIoEElute Chmb€r, BoUc, Llrho,Juuuy 22, 1061,.
.lo rrtm h.rcwltll Fmltr Conourl'ut
(rA.SOITOT/F8EN,. Chl.f ClGrk,'
Mr, Prchuent:-i novitfr* all st.r o! the s.natG lrrt.r!.t'tnf e'tth thdlm.dlatcput!! o( Eou0a llu No..26 b. ,uipoudod; tiot thc porlioE ot'SsoUoln fO, ArtlclG 3 o!. lhG Coutituqlbn ot th. Ftrt! ot frteho, ri{ukJng ilt'bfllr to bc nxd on titrc !.v.rd dryr bs dilpcE.d vtltt,
this bcinC I cssc ol ut'tmcy, ond tllrt EoUBB BiU No. 36 bc mld
uic flillnlmo by tluo, iccoiit tine by tio., ud the thlrd ttmc url.EEt!, r€ceion Dy t.oilon, ud !. Dut.upon lgt lild DEilAt,
. .a\Dtut sd riot "otlnt-Notrc,Ehcu..ii-Bdrr, I/rwt, tlttlt.! uA lSmol( TotBl---a.
Tro-O{rde hrvins votld ln trE dflnnttlv., th. Prqlditrt drcls.dtho ndql rufirondrd
floulc BIU No, 26 wE Nrd th! fr$t limc by tlUe, tj|c uo(rotrd tlmc .Dy utls,rimd thlld ttmo At lon8th, auCtlon by rectlor, nnd plasrolcfor. tJla. gemio ,or llh4l Coh(idarrtls, lfi. q[rrtlou b6ttrt', i'ghi]l .,
tho biu lt0c!?"
Movod by 8€utor Codbcrg. . .gronilod by. Scrator atrr.
Th. qua*ion betng, n8hdl thr rula. br rurp4hdqd?"
nall c{rll ltqult d ir ,ollwr:
IEqra ol h,tprGlrtrtatlvu, Eolso, Iduho,&mtry 2a 1061.
lIuAtr,
SUar,
InCt'lIr, Pb[IiPr.'r'oirl-s.
lhxsilrr,
Wrllht,,rgidlf, Fhtuipr, Totrl.-t,Ab.ut srd uot, votlnS--.No8,
t(oru4al-€trir, Lowry, lliurf, (rid 8nooL, Totol-(.
Whoraupo! tie Pr.atdht 6cctu.d tlle btll prra*l-
TiU0 wu rDDFv.6 ual.tlG blll ordrmd r.tumcal to thc lioudt.ilrrrrc brluli no obj.cuol' thr lmit! Etumod to thE Nlrtb Ordctgl BurltrN,Mcs{s lrch ths Eoorc
Mr'.INo.
E,XHIBIT I)
HFI
4tto
I Atr5?
't'
,tl
.:r
Attomey General
Idaho
1951- --1952 i
ROBERT E. SPIIT,IE' Attorncy General
6;ffih,
RE:PORT OF TIilE
CI"lHli,
$il, t9 l05r
'.'. .1 .
.1: ! i,
" '.i.,i,
' . .l;.t
.'.:.. ::'
OF
.rl
@.:r
,.i
!
II
BIBNNIAL
Iord Lr bolng handlcd wlth rn lacrearc
20 pcr cont over tho rtof rlurlng tho
LTTIOATION
,t rer.low ol thc ilockct rcctlon ol thlr rrport wlll lndlcr,h thrt w'r
have boorr ubla to olose miny pentthg clccr ln the o6c6 8nd thrt tlrs
litlgntlon docket ir now In bcttu condition than rt nny reeeat time.
Thl',has bccn duo ir port io thc cn0ctmrllt ot thc ncv prwirlona ol tha
lncomc Tax Ltrw which authorlre thc Trx Oolleslnr to oiocuts snd
lrruc wm.nrntl oI dltttrhl lor unprld trr$. Previourly r lnlr sutthrd to be ,nrtttutcil on cach dcllnquont lcdounL thlr hm not auto-
Dllttcouy roorccd tho Durdcn ol work tn thb olaoo by thr aurucrlool
nuubor ol oolor, beoauso oaoh illshatat wrrrant reqllros'oourultetion.
Eowevcr, the litlgotion burden, with lts coasequent coEtt, llsB been
substontlally lclrcncd by thc nm ctotutc. Thc cuscl whlch nrc ro\y onthc dockct, howavcr, rrc complcx, and time.conauming in nlturc.A dctailcd report of thc litigciion actlvity of thc officc Ir attaoheal to
thls raport, Some od lhc mora Int rortlng clscs ric rlmfilbed belov.
lYro \Yuhinrtou Vatcr Porrcr Carc
nre 1961 Logielatuo emted o stsluts rvhich lorbndc roquiril,ion
by r rnuhiciDtrl corporltion ol trnothc! stoto ol lacilitled for thc genera-
tlon or trarunllrlon ol clectrlcal.euGlg? ttr ldalo, Tte rt{tlta wtrpatrntly rirucd r,t proventlng rcquldtlou by Publlc Utiuty ptrtrlctr
af tha Stato ol Washlngton of tho operrtiug proporttes of thc \Yoeh-
hgton Water P-bver Coupany locltcd iu North lclahq. Tho cnact-
msni of thc cta[to vu producdvc of tha mort tlmo conruming litilra-
tion ln rvhlah thioDicr hal bccn rqargiil ln thc period reportril in ihlo
report, Our efforto worc dfurctcd at ths ploblern of, daourihg .n oldo-
trcnt oa tha hew rtrtuts,
Tbc T[achlngton Wrte Povor Compeny rvrs t]cn.,lyholly owneal
rubrldlory ol Anerlorn Poryer & Llght Qorfprhy, ln 19d8, tho
.A-Eorlctrn Cornp&ny blil boon ordorc.t by tho Smurltleg & Exohnngo'' Oommlsrl,on ol tIa Unlted 8tltcr to dlvcrt ltacE ol {ta opcatfug
Dropertirs, inqludiry tbs Warhlnlton Qorapaty. In 1061, ths Am;rlccn
Oompany cntcrcd lnto a cortrsst to setl dl o, th? cqmmqn ctoct ol thc
Tfrshlngtou 0omDruy to thr 'Wruhlrytor Etrtc Publlc Uttllty Dir.tl{ott, Ccrtth cltlrenr ot thc Publlc UtiUti Dlstrlct! undortook to
reetreln tJr:.purthAlo by the Dlstr,lcta on the gruunrl thlt rcquJrltion
ol the ld.ho pro!.rHer bv the lf,ethhg:ton Dlatrictc wti bo)rond thalrporr@. Ttre Warhligton Stotc Oourb ro'held onal anroltroal trh. sol6
,rnd ?unb!.. ar thftr proporadr
Thcr€upon, wa [rg!{t tlr6 Saourluor & Erohatrg! conrtrlsrion to rn-
forca lt! 1949 ordlr ol dfurolutlol by t kllg nandatoty sotlon agolnrt
10
ln tho o6cc, fho hcroarcd.ln porsoanel rruounting to
l9a1-19{3 Diernlum,
ATTORNEY CENERAL'g REPORT
Trork
only
ti:
ATTORNEY (IDNJTRAI,'S NEPORT I1
tlre Ameriurn Cornponr-, We ougryeated thtrt thn pro!€r mothod ol
occomDlllhtrg 6 divslliture oX thi Wr6lrlngton ComlrDby war by dic.
trlbutlon o, tho Warlrington Cornpsny common Btook to the atock.
hotdel'r ot thp Artot'luan CotnlAhyr ?r'0 r'ota eB their ownership in thc
Amorican Cotnpany rplcol6d.
. Atlcr r Eori., of lrear{ngr the Srcoril,ios & Dro}aug:c Colnnrig*ion
ot'il6r,ed th&t guch diveftlture oecur not hter thoh Jrnunry l, 1061ttrrlcrr flanr were thon In procoat o.f comploHon rvuoh rsould ofcct
solto othat' iUsporlt{on oI thr ITashiugton Conrprny. Jnst prtor ta
tLe deodllnc, tho Aurellorn 0onrpany filed r plot for nnothar salq
of the Washing'on Corupor:y tq tho fublic Utilitf Dirtrich Btld to an
klnho Corlloratlon Dot yot forrnod. It alcvoloDed th[t Do contrrct d,
salc brd beon entcrod into betrvcon thc lllopomd Dnrticg (nd thot l,heldrho coryoration, whilo non-profit in clroructer, rwnld ln rftr:ct be
anotler }olding cotDp*ny fdr' tlrc operating pr:oprrty, We frlt oorn-
pellecl to rciist thfu plnn nnd nnde epproprlste roprcarntrtion to tho
Securltiee & Exchange Commlssiou. An oldcr,vol entqro{i settlng
the Amcricon plsn for srle ond, tho plcn for divoltiturc bl dlstrtbu.
tion ilown for hs.rinr,
The Pub[c Utilfb DiBtricts thereupon sought &'rastrsininlr orde]ln tho U,$. Circult Court of Appeals for th6 Nhth Cir.cul[ agaiott,
holding ths healing. \Ts Jotned tho Sreuyiticr Conrmiseion in *eekirg
to htv6 the ryestrulning ptder di;aolueil anil the petitiorr {irr }dvlq.
oI i:he Conrlrisiouls aotion diamhsed. fhe Court agrocd rvlthihir rmsition,idismisscd tbc lrtition for reqlew ond dissolvod thc
restralniug order. the Corrrtnigllon theroupon orderea tle hcaildg.
fhe Amerlo.u Conrpany thcn Alod u plon fo1 dirf.dbution in oecor.d-
mce vlth our lnitial Bugg6tlon to tho donniggioF. Thst dlstri|)lrtlon
\yia finally nccompliahetl on August Zl, 1069 rtnd ihe Washington
CoErDAny is now un lnderendsnt opcr&tinE utllity, $ithob[ ]roldina:
Golllpstly oontlol o, llny lllhal. Tho purlprso ol i}c 10[1 Etntuto hsvc
becn rendcrod cflective, Wo 0ntot6il tlre litigotion ct, thc Feiter.gl
admiilstrative level in order to nvoid |onE, dllffcult and costly lltiga-
tion ln otrr orya Etato Courtr, und in tlre scvernl Unlted Stites Courts.
. Thc Clhrgcr Cnsc
Two cascs roca in Madison Couaty whlch lrr of lunalemcntal lDr-
portnrrcc to the condnct ol the public tust. lmporrd on thc ortnluiotra-
tlon of the public ochool luds, Tbr Lgnd Board off€rcd a roerlon olIMd ln tllnt county for arlc at publlc auotiou to thq highegt hitlder.
Ths lrud wsl oford ln tvo pnrcels. On one pnreel R colnpctia4r btaldolvrs fuccosrful ond on thq othcr the per|sorr whq hrd npDlie<l to havctlo lolld otcrcd for relo rsa! suceossftl, fhB conrpotiuon rt the nuctionwrs brlst, auil ttre pel8otr wbo aFrlicd to huvc ths land oFerod fof
Bale diEhonored }er check lor thc.dorw pryrient or tho h6-\t busiDess
EXHIBIT E,
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caLora-)B
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Pego Slx
Bill Passr
Quich Action
On Measure
Draws Protest
Proponenlr l)eclare
Law May Prevent
Lose of Revenuc
rultr
thrn 16
l.rl,o AfnhF, llosto
ho hotl8opcrt not
relltovolc B
rshlch
Ddltot
world
t8n-
sovamol
nnd ctrnod&
I
!lvon
axptrlnc0wri to
atrrt
,rom
thc
uroaIt
Itr
tnhl
ity(
prrt
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ot
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mov.t
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p
tu
DrcptrUsnot clctrpo
lh^ hhsra l}lat tiom
el
6t
l(
ffi-trrcri ftop, Davld Doane (Ada),
asslstanl RoDubllc8n floor lon(lol',
opcncd tho rlebote for tho blll'g
rirpportolr, Iro exp)alned thnt the
mnjor purpose was to plotcctDow-er uscrs o( Idnho, parttctllarly
tlrose in Nol'th ldsho, "to bo Bul'ethat tho eloctrlc rltlllty ptopertlos
bo olnod ln Idaho unal not esc{rp6tuntion."Ho told tho houas that thorolvrs nolv pondlnB nogotlstions br-
l.rvecn tho lVashtngton Wnterfowor company nnd thc PUD
EIouD fi'om' Worhlngton lor tho
Irlo -ot tho tonnor'r north Idaho
Droncl'tlo8.' "llorv Boon lhey aro gotng
throuAh trlth tlo denl, ws don'tInorv," snld Doane, "lrut lt ls cs-
lrcntlnl thnt thla blll bc prased
li6hL nrvoy."Lrrrrls OlUroslllonvcttcr; lcndinE ofl for the oPPo.
nltlon, sltrl 'rt.don't seo f,ny ncccll'illt]' for ruthlnF thl$ kind of lc8'
lslntlorr throurh." IIo lnld tho
nlolrsulo N8s p.-ut on htg dcsk only
lhis rn(n'nlnr.
"It ls so iomnlicated. I'r'o wtlt.
tcn nrv nttor,noi." he iddod. "AllI ltn.ri' nbout tilh blll cnmo lrom
lhc nttol'nev fol'the Idnho Polvol'
conlDflnv nird I'll tell yoll rvhot I
tolrl'hini to Ns tsco-f don't trult
}itrt,"Stnndlns at hls dcrlt wlth
thilmhs h;okcrl lnto hle lower vest
Dockots. Vcltol' tllrncd hls nttcn'
ilon to itro PUD'g. Thcso cooporn'tlrc EmuDs. hc mld. lvcro orvnsd
bv frii'nrei'n "antl I'd r'athor trustiiic fnrnrers-I'lr1 rotl8ftod thoy
*'ill not. cxplolt tho Peoplc."
"-sornolhlite." snld Vetter' hls
trtch-l)llchaa-'volco t'islng ltlSher,
"iriorti nrichtv ttrcng to nlc lhnt
iiii.i';io ir:i:trri to gct'thi8 thr.rtrgh
ro ottlclt."- RLn. Joscnh l(nschrnltter' (D'
fttatiii toott' up for thG ottpocl'
tion,
",Untn' of tho thlngs thnl I$r'
ltcLtor irnr rald, I nnt lr filll nc'
coniJ' lro s,lld. "I nsk'-rvhy- tlto
haste? I. fol mY Imt't, wlnt l'o
itnorv n littlc ntoi'o-before I voto
trr fncol' ol lt."--'rieri. tf'tittnm P-rlc (R-Coodlng)
drrnctnd I ollcstlon f,t Vottcr.
"I. too. uur R fnrmer." he gnld.
"r n;k t'iru \rlll tho fal'luel's who
nr'(t tryinr to btll thcsc lttllltlos
}nvo iirtcir{tl'clrou5h to pny tltott'
tn.r:cr ln Irlntro?"
"I'm lvlllhlg to trust 'enir" wn8
Vcttcr"s t'cplY,Ron. $'tillnrn C. Snrlth (D-Sho-
rhonc) cchoctl KIscllmittcr's words.
llan. \\'nltel' f)lnnison (n-Clcnl"
rrntoi). t'cntlntllrE lhnt h0 lvns n
north Idshoan. inld ho tognrdod
hasto aa csscrtlel ln the PrcscntDrntter.closlnB dobntr, Doano empha-
alzctt lhnt hls lntcrtst ln tho blll
rvas alictntcd b\, hl8 convrcrlon thllt
tho mcttsrtr'c rvns to thc lntctcst oft|le stote, IIe srld thnt lf the north
Idahb propol'tie3 rvctc sold hefotttho legishturc co[ld Etop lt, thr
rtatc would loso at terst $,180,000in roverrucs.
Thoso votln8 agBlnst thc blll lnthc hotue-all DcmoslatB-wcr6Rcps. \Y, D. Drcvlow (Lcrvls),
S{rnr Ea8trnan (Kootennl), I(nsch-mltter (IdEho), W, O, Peyton(Vnlloy), Smith (Shoshonel undItsrvtn G, Vandcnbcrg (Botul-
dury). ahd Vettcr.In thc rcnete, son. B, ,. lool.
i
/\b;h-*
borg (B-Butte), thc maJorlty tloor
leador, lnunchetl the debato Iry
soying t}ture \ua6 "great urgency"
for possage ol the measure bc.
ceuse otl negotlatlono now ln prog.
resg h Now york Clty.
"ff the sale tr matle Prlor to
Dassaso of thls Dlll. Idaho would
itnnd-to toso hcnvi\r ln tnxeg, Ifthe Washtngton Wotor Power
comrr&nv wero tranefbrreil to the
fa.x-ixefnpt PUDI tn Washlngton,
tho stato-of Idaho woul6 stsnd to
lore a lot ol monoy.'l
Sen, Cladt llamllton (D.lVa!h-
lngtorr) was the only opponent to
tnlro tho floor ngairist the blll lu
tho scnato. Ho sald he oPPoeed thc
hurry in paeslng the btll.
AL another polnt he gald he
thousht "it w&! a vlcloue Dlll, a
batl blll."
Ltter, rolonlng to Publtc.owncdutilltlos, he sold:"I fcel they ought to bc brought
bnck olt tho tax tolls. I thlnk all
coopernttve.q ehould PaY taxes,"
S-en. Willlam'J. CostloY (D-Lew-
ls) satd, "If we rvnnt PUDa ln
ftloho tl. shotrld be for thlg body
anil tho ono ncross tlte holl (houae)
to ect rtp the "Plnn." He exPressed
fenr tlrai follttro to pase the mena'
ruro rulEht mcnn tlat PUDg woulal
be forCerl on ldaho. Sonator Cost'
lc.y enld ho wos served bY REIA
nrirl rrrlvatc Dowcr company, 8dd'lnr fhnt RICA ratos wero hlglrer
thiin Wtrshlngton Water Powor'8,,but thol!'s o reason for lt."
Rdectlotrr Nototl
Son. lVilllam C. Moore (R'La'
tnh) notecl thot SPoknno countY
votcrs ln Wnshlngton had twlco
rolccterl ptrbllc tttllltv dlstrlotn
nncl thnt l[sotln countf, Washtng'
too, rvhich adjolne hlg honrs cotln-
ty,'Just lnst November reJected a
PIID hv & fivo-to-ono vote."lvhi.'if thev don't cnre about
PUD tii' ncarbd'WashlnBton atote,
nhould lt bo thirrst upon ua," llena'
tor Moore tlomanded.
Tllo three senate votel against
the bill wero cast bv Sene. Ha.mtl.ton (lVnshlngton), -James L. fn'galls (I(ootcnal) antl ClarenccPhllllpr (Casela).Duilns.its mornlng end atter-
noorr fieEslons, tho houso recelvedeighl bills, one of these, lntro'
duced bv Rep. fr\unk 'Chalfant,
(R-/r.da)-8nd hop. Poter J. Rtcks(R-Madison), rv6uld prevent the
sale of beer ln such cst&bllohmenttas grocery stores and any othet
placo where youths undor 20 arcpertrrltterl to enter.- Six bills and a Jolnt memorlsl
wcl.e lntroduced ln ure aenate.Both tho housc and aenate ad-lntu.lo \ tnr loday.