20171113Commission of Alaska Comment.pdf

STATE OT ATASKADEPARTMENT OF
COMMERCECOMMUNITY AND
ECONOMIC DEVETOPMENT
Bill lYalker Coaernor
Chr* Hladick, Commirioner
S tephen Ma4lpine, Chaitman
Regulatory Commission of Alaska
Date: November 9,2017
In reply refer to: Docket U-I7-085
Idaho Public Utilities Commission
P.O. Box 83720
Boise, lD 83720-0074
Attention: Paul Kjellander, President
Re: IPUC Docket Nos. AVU-E-I7-09lAVU-G-I7-05, In the Matter of the Joint
HYDRO ONE LIMITED and AI/ISTA CORPORATIONfoT Aproval of Merger Agreement
Dear President Kj ellander:
The Regulatory Commission of Alaska has issued the attached order rejecting the joint application
filed by Hydro One Limited and Avista Corporation for Hydro One Limited to acquire a
controlling interest in Alaska Electric Light & Power Company. Rejection was without prejudice
to refiling a complete application. If you have any questions, please do not hesitate to contact me.
Sincerely,
L. Walker
Administrative Law Judge
Regulatory Commission of Alaska
direct line: 907.263.2138
email: [e-mail]
701 W. 8th Avenue, Suite 300, Anchorage, Alaska 99501-3469
Telephone: [phone] Fax: [phone] TTY: [phone]
Website : http://rca.alaska. gov
f.\D-.:-t 3
i*-*- *,''lz--' +-*i r': tu--i--- c5i .'r:r- *d
iifi;. cr)
ffihrsF:E6A \oU)+9N,,ffplication
;DTfi
C)marn(3
of
,l
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
-9q 3HH S<€s€briEst
C .iv'l\.9 5 oR
r Et;E<<EF_Coi xNo.s,6'q!
>rrr b td
-r-lO A?i(o
E *:1
EDr f-oo oEF- g
22
23
24
25
26
Before Commissioners:
REC E IVE D
?0ll HOY l3 AH 9: h2
STATE OF ALASKA - ;ir ',1 iii-,-iil:llC - ,'I:r l:::-', Ci;i"i:,i!SSi0N
THE REGULATORY COMMISSION OF ALASKA
Stephen McAlpine, Chairman
Rebecca L. Pauli
Robert M. Pickett
Norman Rokeberg
Janis W. Wilson
ln the Matter of the Joint Application Filed by Hydro
One Limited and Avista Corporation for Authorityto Acquire a Controlling lnterest in ALASKA
ELECTRIC LIGHT & POWER COMPANY
u-17-085
ORDER NO. 2
ORDER DENYING JOINT MOTION FOR WAIVER.
REJECTING JOINT APPLICATION. AND CLOSING DOCKET
BY THE COMMISSION:
Summary
We deny the joint motion for waiver of the requirement to file proof of
registration to do business in Alaska filed by Hydro One Limited (Hydro One), through its
wholly owned subsidiary Olympus Equity LLC (Olympus Equity), and Avista Corporation
(Avista). We reject the joint application for authorization to acquire a controlling interest
in Alaska Electric Light & Power Company (AEL&P) under 3 AAC 48.6a8(c)(2). We close
this docket.
Backqround
AEL&P provides electric utility service in the City and Borough of Juneau
under Certificate of Public Convenience and Necessity No. 1. AEL&P is a wholly owned
subsidiary of Alaska Energy and Resources Company (AERC), which is a wholly owned
subsidiary of Avista.l
lOrder U-13-197(2), Order Approving Joint Application for Authority to Acquire
Controlling lnterest in Alaska Electric Light and Power Company, dated May 30, 2014.
u-1 7-085(2) - (1 1 t08t2017)
Page 1 of8
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
-9= 3HH S<€s€bdENE .iu'l\.9 5 oPI Et;E<al-
6 E gi.io.s, H'q!>ur b td
-u-lo ot@
E #:1Crrr l'-oo oEF- 9
Hydro One, acting through Olympus Equity, is in the process of acquiring
ownership of Avista. As part of this process, Hydro One, through Olympus Equity, and
Avista jointly filed an application for Hydro One to acquire a controlling interest in AEL&P.2
Hydro One and Avista also filed a joint motion to waive the requirement that Hydro One
and Olympus Equity file proof of registration to do business in Alaska.3
We issued public notice of the Application for Controlling lnterest and
Motion for Waiver with comments due by October 12,2017. We received 34 comments
in response to the public notice,a including eight comments in opposition to the Motion for
Waiver.s Hydro One, through Olympus Equity, and Avista filed a reply to the comments
in opposition to the Motion for Waiver.6
2Joint Application for Authorization to Acquire a Controlling lnterest in Alaska
Electric Light and Power Company, dated September 14,2017 (Application for Controlling
lnterest).
3Joint Motion for Waiver of Requirement to File Proof of Registration, daled
September 14,2017 (Motion for Waiver).
aluneau Hydropower lnc. filed two different sets of comments on October 12,
2017.
sCorrespondence from G. Keiser, filed September 26,2017; Correspondence from
G. Gagne-Hawes, filed October 5,2017; Correspondence from D. Redmond on behalf of
Renewable Juneau, filed October 5, 2017; Correspondence from L. Spengler, filed
October 6, 2017:, Correspondence from J. Crondahl, filed October 6, 2017;
Correspondence from S. Lewis, filed October 7,2017; Correspondence from L. Stats,
filed October 8, 2017; Correspondence from S. Sloss, filed October 9,2017 .
oApplicants' Reply to Oppositions to Motion for Waiver, filed October 19, 2017
(Reply).
u-1 7-085(2) - (1 1 t0812017)
Page 2 of 8
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
-9e 3g6 S<€s€
EdEt..
E .ie'l\.o 5 oP
E qt;E<=!-tr-c lFOi x.No .o', H'N>ur b td
-r-lO (/,t(o
E *:1EDr l-oo oEF- 9
Discussion
Motion for Waiver
Our Application for Authorization to Acquire a Controlling lnterest in a
Regulated Public Utility form requires foreign corporationsT seeking to acquire a
controlling interest in a certificated public utility to file proof of registration to do business
in Alaska.s Hydro One, a corporation organized under the laws of Ontario, Canada, and
Olympus Equity, a limited liability company organized under the laws of Delaware, seek
a waiver of this requirement under 3 AAC 48.805.e They assert that after Hydro One
acquires Avista, a corporation organized under the laws of Washington, all business in
Alaska will be conducted by Alaska corporations AEL&P and AERC. They further assert
that AEL&P and AERC will remain subsidiaries of Avista, which is a foreign corporation
registered to do business in Alaska.1o They cite to orders in four dockets where we have
granted similar waivers and assert that their circumstance is similar to the foreign parent
companies in those dockets.ll
7As defined by AS 10.06.990(22), a foreign corporation is one organized under
laws other than the laws of Alaska. This includes Hydro One, which was not created or
organized under the laws of the United States or another state, and is therefore also an
alien as defined by AS 10.06.990(3)(8). As defined by AS 10.50.990(7), a foreign limited
liability company is one organized under the law of a state other than Alaska, and includes
Olympus Equity which is organized as a limited liability company under the laws of
another state (Delaware).
sAPUC Form X107 at 5 (Paragraph 4.b). Available on our website at
http ://rca.alaska.oov/RCAWeb/RCALibrarv/Form sLi bra rv.aspx.
eMotion for Waiver at 2.
loMotion for Waiver at 1-3.
llMotion for Waiver at3-4.
u-1 7-085(2) - (1 1 lo8t2o17 )
Page 3 of 8
1
2
3
4
5
6
7
8
I
10
11
12
't3
14
15
16
17
18
19
20
21
22
23
24
25
26
-9e 3HH Si€spbdEN
C .ie'l:.9 5 oR
r E{;E<<l-
b E go.io.s, H'e!>ur b tdO aDii(o
Esl1EDr l-oo oEF- 9
Opposition to the Motion forWaiver was generally based on the ground that
Hydro One is a foreign corporation.l2 We interpret these comments to use the term
"foreign" in the colloquial rather than legal sense, and that in legal terms the basis for
concern is that Hydro One is an alien corporation that is, a corporation organized under
the laws of another country. One opponent noted that registration of foreign corporations
provided the public with additional information.l3
ln reply, Hydro One, through Olympus Equity, and Avista point out that
several opponents to the Motion for Waiver misunderstood that motion to be a request
for permission to conduct business in Alaska without a business license. They assert that
all business conducted in Alaska would be by AEL&P and AERC, both of which have
Alaska business licenses. They further assert that the general opposition to the Motion
for Waiver is not a reasonable basis for denial because AEL&P and AERC are currently
owned by a foreign corporation, Avista.la
Aforeign corporation, including an alien corporation, may obtain a certificate
of authority to transact business in Alaska issued by the Commissioner of the Alaska
Department of Commerce, Community, and Economic Development.15 Hydro One and
Olympus Equity have not claimed that they cannot register for a certificate of authority,
l2Correspondence from G. Keiser, filed September 26, 2017; Correspondence
from G. Gagne-Hawes, filed October 5,2017; Correspondence from L. Spengler, filed
October 6, 2017; Correspondence from J. Crondahl, filed October 6, 2017:
Correspondence from S. Lewis, filed October 7,2017; Correspondence from L. Stats,
filed October 8,2017; Correspondence from S. Sloss, filed October 9,2017
l3Correspondence from D. Redmond on behalf of Renewable Juneau, filed
October 5,2017 .
laReply at2-4.
lsAS 10.06.705; AS 10.06.990(10).
u-1 7-085(2) - (1 1 t08t2017)
Page 4 of 8
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
(Ea Cr)-Yx (f)8H S8.9 x so
EdSRc ,io S.9 5 oR
U ET;E<?Ftr-c lFOi Xc!o.s,6'i{>ur 5 td66t<o
E *:1EDr F-oo o,t l.- O)
and the process for doing so does not appear overly burdensome.16 Registration for a
certificate of authority requires the entity to designate a registered agent located in Alaska
for the purposes set out in AS 10.06.763 and AS 10.50.365, including service of process
on the entity. ln addition, an applicant corporation must provide the information required
by AS 10.06.730, and an applicant limited liability company must provide the information
required by AS 10.50.615, which includes some information our APUC Form X107 does
not require. Further, registration eliminates ambiguity about the identity of an entity by
preventing a domestic entity and a foreign entity from having the same or similar names.l7
We find that there is a legitimate public interest served by enforcing the proof of
registration to transact business requirement of APUC Form X107.
Hydro One cites to four dockets where we have waived the proof of
registration requirement of APUC Form X107.18 Three of these four dockets (U-13-016,
U-11-065, and U-04-069) involved the same entity, the ultimate parent of Securus
Technologies, lnc. (Securus), which is a provider of prison telephone services
(technically, private pay telephone and intrastate interexchange services) was a Delaware
corporation. Prison telephone providers periodically compete for contracts with the State
of Alaska Department of Corrections to retain the right to offer public utility services. On
the other hand, once Hydro One and Olympus Equity acquire a controlling interest in
AEL&P, that control, and the right to offer public utility services through AEL&P, continues
indefinitely. Also, unlike Securus, AEL&P is subject to full economic regulation.
Therefore, the applicants here are not similady situated to Securus.
l6See AS 10.06.730; AS 10.50.615 (The application forms for both foreign
corporation and foreign limited liability company certificate of authority are posted at:
https://www.commerce.alaska.qov/web/cbpl/Corporations/CorpFormsFees/FormsbvEve
nt.aspx).
17AS 1 0.06.720; AS 1 0.50.620.
lsMotion for Waiver at 3-4; Reply at4-5.
u-1 7-085(2) - (1 1 t0812017)
Page 5 of 8
1
2
3
4
5
6
7
8
I
10
11
12
13
'|.4
15
16
17
18
19
20
21
22
23
24
25
26
G^ (f)
-Yx (f,HH S<€ssEdENc .iu'l-.9 5 oPI qI;
E<<t
Oi XNo.sr H'q!>uJ b tdo i,):(o
E *:1Err |.-oo oEr- g
The remaining docket cited to by Hydro One, U-06-005, involved New Edge
Network, lnc., d/b/a New Edge Networks (New Edge), whose ultimate parent was a
Delaware corporation. As a competitive intrastate interexchange telephone carrier, New
Edge was only required to be registered, not hold a certificate of public convenience and
necessity. On the other hand, AEL&P is required to hold a certificate of public
convenience and necessity. Again, unlike New Edge, AEL&P is subject to full economic
regulation. Therefore, the applicants here are not similarly situated to New Edge.
Because none of the cited dockets involved either an alien ultimate parent
or an economically regulated public utility, they are factually distinguishable and not
precedential. ln addition, we had no occasion to closely examine the issue in those
dockets since no objections to the requests for waiver of the proof of registration
requirement were raised.le ln this docket, objections to the Motion for Waiver have been
filed and these objections prompted us to examine the issue more closely.
Hydro One and Olympus Equity2o assert as the primary premise in their
Motion for Waiver that they will not transact business in Alaska except as the indirect
owners of AEL&P and AERC. However, the requirement to register for purposes of APUC
Form X107 is a public utility regulatory requirement and is not conditioned on an
independent legal obligation to register under Alaska business organizations law.
leSee Dockets U-13-016, U-11-065, U-06-005, and U-04-069.
2oOlympus Equity also observes that it is not a foreign corporation, but rather a
foreign limited liability company. For purposes of the APUC Form X107, this is a
distinction without difference. Both corporations and limited liability companies have a
separate existence, and insulate their owners from direct liability for acts of the entity.
Foreign limited liability companies, created by statute in 1994, are not directly addressed
by APUC Form X107, which was last revised in 1993, merely because they were not a
recognized form of business in Alaska when the form was adopted. The same is true of
foreign limited liability partnerships (which must file a statement of foreign qualification
under AS 32.06.921) because limited liability partnerships were not created by statute
until 2000.
u-1 7-085(2) - (1 1 t08t2017)
Page 6 of 8
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
(E^ COix (o8H SE.9:e
bdSR
C .ie'JNo x -o
u E*;
E 1=rOi x.No.e H'q!>rrr b td66t@
E8+1EDr Noo c),r/ l\ O)
Consequently, it is unnecessary for us to determine if Hydro One and Olympus Equity will
be transacting business in Alaska for the purposes of AS 10.06.705 or AS 10.50.720.
Because the burden of registration is minor when weighed against the
benefit to the public from the additional safeguards afforded by registration and the
availability of additional information not otherurise provided under our regulations, we do
not find good cause to waive the APUC Form X107 requirement that Hydro One and
Olympus Equity include proof of registration to do business in Alaska as part of their
application to acquire a controlling interest in AEL&P. Therefore, we deny the Motion for
Waiver.
Application for Controllinq I nterest
An application is generally considered complete when filed with us unless
rejected within fifteen business days under 3 AAC 48.650.21 An exception to this rule
occurs when an application is accompanied with a request for the waiver of an application
filing requirement and the waiver request is denied.22 When a waiver request is denied,
the application "is rejected without prejudice to refiling . . . .D23
The Application for Controlling lnterest was accompanied by a request for
waiver of one of the APUC Form X'l07 filing requirements. For the reasons discussed
above, we deny the Motion for Waiver. Therefore, the Application for Controlling lnterest
is rejected without prejudice to refiling.
Final Order
This order constitutes the final decision in this proceeding. This decision
may be appealed within thirty days of this order in accordance with AS 22.10.020(d) and
Alaska Rule of Appellate Procedure 602(a)(2). ln addition to the appellate rights afforded
213 AAC 48.648(bX1)
223 N\C 48.648(bX2)
233 A/qC 48.648(cX2)
u-1 7-085(2) - (1 1 108t2017)
Page 7 of 8
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
-9= 3*H g<€seEdEt,c roC
:fi Efi3
=1<EEE s.io .e',6'!!>ur b td
-r-lO (/,t@
E *:1Bs5EF- 9
by AS 22.10.020(d), a party has the right to file a petition for reconsideration in
accordance with 3 AAC 48.105. lf such a petition is filed, the time period for filing an
appeal is tolled and then recalculated in accordance with Alaska Rule of Appellate
Procedure 602(a)(2).
Docket Closure
No substantive or procedural matters remain in this proceeding.
Accordingly, we close this docket.
ORDER
THE COMMISSION FURTHER ORDERS:
1 . The Joint Motion for Waiver of Requirement to File Proof of Registration,
filed by Hydro One Limited through Olympus Equity LLC and Avista Corporation on
September 14,2017, is denied.
2. The Joint Application for Authorization to Acquire a Controlling lnterest
in Alaska Electric Light and Power Company, filed by Hydro One Limited through
Olympus Equity LLC and Avista Corporation on September 14,2017, is rejected.
3. Docket U-17-085 is closed.
DATED AND EFFECTIVE at Anchorage, Alaska, this 8th day of November,2017 .
BY DIRECTION OF THE COMMISSION
u-1 7-085(2) - (1 1 108t2017 )
Page 8 of 8
N4l ss
i>r-
,.4
.:.
I
t