Montana Public Service Commission approves acquisition of Avista Corp by Hydro One
The Montana Public Service Commission (PSC) recently approved by a vote of 4-1 the acquisition of Avista Corp., part owner of Colstrip units 3 & 4, by Hydro One Limited.
The commissioners included several conditions in the approval designed to protect the public interest of Montanans and the continued operation of Colstrip generating facility units 3 & 4.
Hydro One, a Canadian utility company, is currently seeking to acquire Avista Corporation, a utility that provides electricity and natural gas service in Montana and several other states. Avista only has 32 customers in Montana but owns a 15 percent stake in Colstrip units 3 & 4 as well as hydroelectric generation assets in Montana.
“Is it in the public interest? I believe it probably is. Even though they only have 32 people being served, they’re a large taxpayer and job creator,” Commissioner Bob Lake, whose district includes Avista’s Montana customers and hydroelectric generation facilities, said. “Because it’s a Canadian company, that causes greater concerns, but their history of quality and reliable service made the decision easier.”
The merger must also receive approval from several state utility commissions, including Washington, Idaho, Oregon, Alaska as well as various federal agencies.
As part of the approval process, Avista and Hydro One have reached settlements with various interested parties in the affected states. These settlements include an accelerated depreciation schedule for Colstrip units 3 & 4 with an end-of-useful life date of 2027.
Some Montana commissioners expressed concern that the accelerated depreciation schedule might result in the premature retirement of the Colstrip units.
“It was a tough decision,” Commissioner Tony O’Donnell who opposed the sale, said. “On the one hand, there’s the funding for Colstrip’s community transition fund. But on the other hand, I didn’t hear enough assurance that the Canadian government can’t interfere to shorten the length of Colstrip power plant’s operational life.”
To protect against this risk, the Montana commission’s resolution opts out of the 2027 depreciation schedule for ratemaking purposes in Montana and notes that the co-owner agreement for Colstrip units 3 & 4 does not allow for a unilateral end date.
