Hydro One to pay $103 million break fee after merger with Avista called off
TORONTO — Hydro One and Avista Corp. say they have agreed to cancel their merger after regulators in Washington state and Idaho shot down the deal.
The energy companies say that after weighing their chances of getting those decisions reversed, both their boards of directors decided it was best to call off the plan.
They say under the terms of the merger agreement, Hydro One must now pay Avista US$103 million in termination fees.
Earlier this month, the Washington Utilities and Transportation Commission denied a request from both companies to reconsider its rejection of the Ontario utility’s planned takeover of the American company.
The request was issued after regulators found that the $6.7-billion planned merger would not sufficiently safeguard Avista customers from the whims of the Ontario government, which is Hydro One’s largest shareholder.
The regulator has pointed to Premier Doug Ford’s efforts to force former Hydro One CEO Mayo Schmidt to retire — which was followed by the resignation of the utility’s entire board — as a sign that the province was willing to put political interests above those of shareholders.
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.
The merger required approvals from state regulatory commissions in Washington, Idaho, Oregon, Montana and Alaska to go through, but only the latter two have approved it. Oregon’s public utility commission opted last week to put its decision on hold.
Ontario Energy Minister Greg Rickford said the Progressive Conservative government accepts the decision made by the two utilities, and will continue to focus on bringing down hydro rates for Ontarians.
“Any costs incurred as a result of today’s decision will not be paid by Ontario electricity customers,” Rickford said in a statement.