Takeaways
- The review processes of the Avista/Hydro One merger at Idaho and Oregon utilities regulators are still expected to carry on as scheduled following their Washington counterpart’s decision to block the deal.
- The Washington Utilities and Transportation Commission, or UTC, announced on Dec. 5 that it denied Hydro One’s acquisition of Avista. If Avista and Hydro One don’t agree with the UTC’s order, they can file a petition for reconsideration within 10 days.
- Peter Richardson, an attorney for Avista’s largest customer, Clearwater Paper Corp., told Reorg M&A that even if the Idaho Public Utilities Commission, or PUC, approves the merger, he does not expect the deal to be consummated without the UTC’s approval.
- Matthew Evans, public information officer for the Idaho PUC told Reorg M&A that “for now, the commission will continue its review and work toward a decision.” There is no statutory deadline for when the Idaho PUC needs to make a decision, which is currently expected to be issued after Dec. 22.
- Meanwhile, the Oregon PUC is currently expected to issue a decision on the transaction by Dec. 14.
The review processes of the Avista/Hydro One merger at Idaho and Oregon utilities regulators are still expected to carry on as scheduled following their Washington counterpart’s decision to block the deal.
The Washington Utilities and Transportation Commission, or UTC,
announced on Dec. 5 that it denied Hydro One’s acquisition of Avista. While it is difficult to speculate on how the decision will affect the decision-making processes in Idaho and Oregon, most practitioners with experience before state utility regulators previously
said to Reorg M&A that the rejection does not reflect positively for the companies in these other reviews.
Peter Richardson, an attorney for Avista’s largest customer in Idaho, Clearwater, told Reorg M&A that even if the Idaho PUC approves the merger, he does not expect the deal to be consummated without the UTC’s approval.
If Hydro One wants to move forward with its acquisition of Avista following an approval from Idaho and a rejection from Washington, the combined company would have to be bifurcated, Richardson said. There is “no way they could bifurcate,” he added. “I don’t see any advantage to the companies pursuing the Idaho application at this point.”
A practitioner with experience before the Idaho PUC said that each state commission has to approve the settlement and specifically the transfer of rights and duties from Avista to Hydro One. “My understanding is [that] if any state commissions deny this, then the entire merger falls apart,” the practitioner said.
Matthew Evans, public information officer for the Idaho Public Utilities Commission, or PUC, told Reorg M&A that “for now, the commission will continue its review and work toward a decision.” There is no statutory deadline for when the Idaho PUC needs to make a decision, which is currently expected to be issued after Dec. 22.
In a
brief filed on Friday, Nov. 7, Hydro One and Avista once again asserted that their merger should be approved by the Idaho PUC. In their own
brief filed on Friday, Idaho PUC staff wrote that the Idaho code “does not bar” the companies’ proposed merger. “Avista is not proposing to transfer an interest in its Idaho-based generation, transmission, or distribution property,” the staff said. “Further, even if such a property interest were being transferred, the Hydro One and Olympus Equity are not impermissible transferees.”
Evans could not identify any other cases before the Idaho PUC going back to the late 1990s in which one state denied a merger while it was being reviewed in other states. Mike Goetz, the chief attorney at the Oregon Citizens Utility Board, or CUB, which continues to oppose the transaction, could also not recall any cases in which the same had happened regarding the Oregon PUC.
The Oregon PUC is currently expected to issue a decision on the transaction by Dec. 14.
Back in Washington, if Avista and Hydro One don’t agree with the UTC’s order, they can file a petition for reconsideration within 10 days. They also can seek judicial review under within 30 days without bothering with a petition for reconsideration, UTC spokesperson Kate Griffith told Reorg M&A.
If they do file a petition for reconsideration, the 30-day time-frame for seeking judicial review does not begin until the commission resolves the petition with an order, or denies it by default, Griffith said. Denial by default occurs if the commission does not act on the petition within 20 days. The timing of these events can deviate from these rules if the commission gives notice of a change in timing, Griffith added.
The parties have set March 29 as the termination date for the merger. In a statement following the block of the deal in Washington, Avista and Hydro One said they are “extremely disappointed” in the UTC’s decision and were “reviewing the order in detail and will determine the appropriate next steps.” As of Monday morning ET, the companies have not filed anything with the UTC following the regulator’s order denying the transaction.
Reorg M&A’s previous coverage of this transaction can be found
HERE.
--Alexandra Wilts and Kathryn Haake