U.S. regulators deny Avista takeover
TORONTO — Washington State regulators have denied Hydro One Ltd.’s proposed takeover of Avista Corp., citing political interference in the Ontario utility by the provincial government.
The Washington Utilities and Transportation Commission said it found the deal, which valued Avista at $6.7-billion, was not in the public interest after it became clear the Ontario government was willing to interfere in the utility.
The U.S. regulator cited Premier Doug Ford’s move to force the Hydro One CEO to retire, which was followed by the resignation of the entire board, as evidence the province was willing to put political interests above those of shareholders, including those who own a majority of the Ontario utility’s stock.
Hydro One’s 14-member board resigned en masse after the sudden retirement of chief executive Mayo Schmidt, who Ford had labelled “the six-million-dollar man” for his hefty compensation.
“Provincial government interference in Hydro One’s affairs, the risk of which has been shown by events to be significant, could result in direct or indirect harm to Avista if it were acquired by Hydro One, as proposed,” it stated in its decision.
“This, in turn, could diminish Avista’s ability to continue providing safe and reliable electrical and natural gas service to its customers in Washington. Avista’s customers would be no better off with this transaction than they would be without it.”
Hydro One and Avista said in a release that they are “extremely disappointed” in the decision and are reviewing the order to determine the appropriate next steps.
The regulator said the Ontario government’s action resulted in credit downgrades and decreased the value of Hydro One and Avista shares.