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Hydro One, Avista file applications with US regulators for $5.3bn merger

EBR Staff Writer Published 15 September 2017

Ontario's electricity distributor Hydro One and US-based energy company Avista have filed applications in the US seeking regulatory approval for their $5.3bn merger.

The companies have filed requests with Washington, Idaho, Oregon, Montana, and Alaska state utility commissions and also with the US Federal Energy Regulatory Commission (FERC). Hydro One and Avista have requested the concerned authorities to approve the transaction by mid August 2018.

In July, Hydro One agreed to acquire Avista in an all-cash deal to form a major player in regulated electricity and natural gas business in North America with over $25.4bn in combined assets.

Hydro One president and CEO Mayo Schmidt called the filing of the applications as a major milestone in the proposed merger of Hydro One and Avista.

Schmidt added: “Together, we are growing, diversifying and strengthening our business.

“This is allowing us to gain further efficiencies through enhanced scale and increased purchasing power that will provide a strong foundation for the future with material benefits to all of our stakeholders most importantly the customers and communities we serve."

The $5.3bn transaction would need approvals from the five American state utility commissions and the FCC. It would also need approval by the Committee on Foreign Investment in the US and has to comply with under the US Hart-Scott-Rodino Antitrust Improvements Act of 1976 for applicable requirements.

There are also customary closing conditions that need to be satisfied to complete the merger. If everything goes by plan, then the merger is anticipated to be completed in the second half of next year.

Avista chairman, president and CEO Scott Morris said: “The merger will provide some immediate cost savings that will be passed on to our customers, as well as the opportunity for longer-term benefits from efficiencies gained through the sharing of best practices, technology and innovation.”

Post merger, Avista will retain its headquarters in Spokane, Washington and also its office locations in its service territory.

Image: Transmission lines in the Greater Toronto Area, for which Hydro One is responsible. Photo: courtesy of Theonlysilentbob/Wikipedia.