TORONTO — Washington state regulators have denied a request from Hydro One and Avista Corp. to reconsider the rejection of the Ontario utility’s planned takeover of the American company.
The Washington Utilities and Transportation Commission said it will take no action on the request, which was made after regulators found last month that the $6.7-billion planned merger would not sufficiently safeguard Avista customers from the whims of Ontario’s provincial government — Hydro One’s largest shareholder.
“The commission found that the proposed merger agreement did not adequately protect Avista or its customers from political and financial risk or provide a net benefit to customers as required by state law,” it said in a statement.
The regulator has cited Premier Doug Ford’s move to force former Hydro One CEO Mayo Schmidt to retire, which was followed by the resignation of the entire board, as evidence that the province was willing to put political interests above those of shareholders.
Hydro One and Avista argued in their request for reconsideration that the commission erred in reaching its decision because it “misapprehended” the political risks posed by the Ontario government.
Recently, the Idaho Public Utilities Commission also denied the proposed takeover, finding that the companies had failed to demonstrate that the transaction met the public interest and no-harm tests set out in the state law.
The deal required approvals from state regulatory commissions in Washington, Idaho, Oregon, Montana and Alaska to go through. Alaska and Montana have approved the transaction.
In a joint statement, Hydro One and Avista said they are “disappointed in the UTC’s decision and will determine the appropriate next steps.”
A spokeswoman for Ontario Energy Minister Greg Rickford said the province has “strong interest” in the success of Hydro One but could not say what, if anything, could be done to now save the merger.
“We understand that Hydro One and Avista are reviewing both the Idaho decision and the Washington Utilities Commission’s decision not to reconsider their order,” said Sydney Stonier. “They will determine the appropriate next steps.”
Ford has defended his decision to shake up the senior ranks of Hydro One and has said he remained committed to improving the partially privatized utility.
Hydro One stands to face more than $133 million in penalties over the quashed deal, according to transaction documents.
When the proposed deal was announced in 2017, Avista was to keep its existing corporate headquarters in Spokane, Wash., and continue to operate as a stand-alone utility in Washington, Oregon, Idaho, Montana and Alaska.