20170915press release.pdf

Case No. AVU-E-17-09 and AVU-G-17-05
Contact: Matt Evans
[phone] office
[phone] cell
www.puc.idaho.gov
Avista requests PUC approval of proposed
merger with Hydro One
BOISE (Sept. 15, 2017) – Avista Corporation has requested regulatory approval of its proposed
$5.3 billion merger with Hydro One Limited.
If the deal is approved, Avista would become a wholly-owned subsidiary of Hydro One, the largest
electric utility in the province of Ontario.
Avista would keep its name and continue to operate out of its headquarters in Spokane as a
“standalone utility” with its existing employees and management team, according to the application
filed with the Idaho Public Utilities Commission, one of several regulatory entities that must
approve the transaction.
Combined, the two companies would be one of the largest regulated utilities in North America, with
more than $25.4 billion in assets.
Receiving service from a larger utility would allow Avista customers to “receive the benefits of scale
… while also avoiding the risk of a potential subsequent acquisition by another party that may not
share Avista’s culture and values,” according to the application.
For customers, the cost savings associated to the merger would be “immediate,” the application
said.
A rate credit of $31.5 million to be distributed over a 10-year period has been proposed.
“The $31.5 million represents the ‘floor’ of benefits that will be flowed through to Avista’s
customers,” according to the application.
Long-term benefits include increased purchasing power and reduced costs associated with
efficiencies that emerge as best practices and business processes are developed and technology
shared.
Hydro One provides electric service to more than 1.3 million customers throughout Ontario.
The Toronto-based investor-owned company does not own any generation assets but maintains a
network of nearly 18,700 miles of transmission lines and 77,000 miles of distribution lines.
Avista owns and operates eight hydropower facilities, five natural gas plants and a biomass facility.
The company has ownership interests in two coal-fired plants and maintains more than 20,800
miles of transmission and distribution lines.
Avista provides electric service to approximately 378,000 customers and natural gas service to
342,000 customers. Approximately 130,000 electric customers and 82,000 natural gas customers
are in Idaho.
The Commission will analyze the proposed transaction in order to determine whether it is in the
interest of the state’s residents.
Idaho Code 61-328 specifies that an electric utility may transfer property only if the Commission
finds that:
 Rates will not increase because of the transaction.
 The buyer has the intent and financial ability to operate and maintain the property in the
public service.
 The transaction is consistent with the public interest.
Other entities that must approve the merger include regulatory agencies in Washington state,
Oregon, Montana and Alaska, and the Federal Energy Regulatory Commission.
The merger must comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and it
must be authorized by the Committee on Foreign Investment in the United States, an inter-agency
governmental board charged with reviewing the national security implications of foreign
investments in US companies.
The Ontario government owns 49.9 percent of Hydro One’s shares but “it does not hold or exercise
any managerial oversight over Hydro One,” according to the application.
If the merger is approved, Avista would no longer be a publicly-traded company and would instead
have one owner, Hydro One.
The companies have requested Commission approval of the merger by mid-August 2018.
The joint application and other documents related to the case can be found at the Commission web
site, www.puc.idaho.gov. Under the “Electric” heading, click on “Open Cases” and scroll down to
Case No. AVU-E-17-09. The information can also be found under the “Natural Gas” heading. From
there, click on “Open Cases” and scroll down to Case No. AVU-G-17-05.
Comments on the proposal can also be submitted via the web site. Under the “Electric” or “Natural
Gas” heading, click on “Case Comment Form” and enter your comment. Be sure to include the case
number, AVU-E-17-09 or AVU-G-17-05.