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Wash. regulators refuse to review Hydro One/Avista merger plan

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Wash. regulators refuse to review Hydro One/Avista merger plan

Washington state utility regulators declined to reconsider their earlier rejection of the acquisition of Spokane, Wash.-headquartered Avista Corp. by Hydro One Ltd., creating a further roadblock to the Canadian company's desire to expand.

Avista Corp. through its Avista Utilities Inc. brand serves 383,000 electric and 348,000 natural gas customers in Washington, Idaho and Oregon. It also owns a small utility in southern Alaska.

The Washington Utilities and Transportation Commission on Dec. 7, 2018, denied the merger application, but the companies filed a petition for reconsideration, saying the commission "misapprehended" the political risks that the province of Ontario's ownership stake in Hydro One would pose for Avista's electric and gas customers in that state. The province owns 47% of Hydro One's shares, and the provincial government can appoint or remove the company's CEO and board members.

Washington's regulators simply refused to review that point by taking no action on the companies' petition for reconsideration and instead on Jan. 8 issued a notice of denial of the petition "by operation of law." As the commission stated in its notice, the regulators decided to take no action on the petition within 20 days so the petition was automatically denied under the state's Administrative Procedure Act.

The commission did note that the petition failed to establish sufficient grounds for rehearing the case, which the act defines as changed conditions since the commission entered the order, unintended effect on the petitioner resulting from the order or any other sufficient cause the commission did not consider.

The Idaho Public Utilities Commission on Jan. 3 denied the merger, concluding that state law expressly prohibits the transfer of assets from a regulated utility to an entity that is owned or controlled by another state.

Oregon has yet to render its decision, but a law judge there said the state Public Utility Commission was reviewing Washington's decision to determine its "procedural impact" and had no schedule for concluding the case. Avista serves only gas customers in Oregon, and receives 4.46% of its retail operating revenues from the state.

In a statement, the companies said they were "disappointed" in the Washington decision "and will determine the appropriate next steps."