OLYMPIA, Wash.- The proposed sale of one of the owners of the Colstrip coal plant to a Canadian energy giant was dealt a major setback Wednesday by the Washington state utility regulators.
The Washington Utilities and Transportation Commission announced Wednesday it was refusing to sign off on the proposed $5.3 billion merger of Colstrip owner Avista Corp. and Hydro One Limited, ruling that it does not serve the public interest.
Avista is one of the six corporate owners of the four Colstrip power plants. The company has a 15 percent stake in the plant’s newest units 3 and 4 and has targeted 2027 as the “end of useful life,” or possible closure, of the assets.
As part of the sale, Avista had pledged up to $4.5 million to the city of Colstrip to help the community transition to a post-coal future. Of that total, $3 million was connected to the Hydro One merger.
But Washington regulators determined the proposed merger “does not adequately protect Avista or its customers from political and financial risk, nor does it provide a net benefit to customers as required by Washington state law,” according to a news release.
The commission cited political changes in the province of Ontario, which owns 47 percent of Hydro One, for its decision. In May, Ontario leaders told the commission they would remain passive investors in the company, but the ruling party, the Ontario Liberal Party, lost control of the parliament.
The new majority party, the Progressive Conservative Party of Ontario, axed the Hydro One board of directors and saw the CEO retire, which the Washington utilities commission said caused concern of political interference in the deal.
Spokane based Avista serves only a handful of customers in Montana, with the majority of its customers in eastern Washington and Idaho.
Hydro One is Ontario’s largest electricity transmission and distribution provider – serving more than 1.3 million customers.
In June, the Montana Public Service Commission voted 4-1 to approve to the deal. However, the merger requires approval from agencies in Washington, Idaho, Alaska, Oregon and the federal government to close.
Reporting by Jay Kohn for MTN News