The Washington Utilities and Transportation Commission (UTC) said the sale of Avista Corporation to the Canadian utility company, Hydro One Corporation does not serve the best interests of the Spokane, Washington company or its customers. A copy of the decision is available at www.utc.wa.gov.
The $5.3 billion sale of Avista to Hydro One was decisively halted by the UTC and the two companies issued a joint statement expressing disappointment in the decision and saying they would review it in detail before deciding how to proceed. However, CP24.com suggests that Ontario, and by extension, the province’s taxpayers could end up paying the $138 million termination fee.
Premier Ford faces criticism over Hydro One deal falling through B5tdh1UBzq
— Ottawa Sun (@ottawasuncom) December 6, 2018
Doug Ford’s interference and Hydro One
Hydro One at one time was a Crown Corporation with the provincial government being the sole shareholder. But following its initial public offering on the Toronto Stock Exchange in 2015, the Government of Ontario began selling shares to the public with a final goal of 60 percent of the company being held by private investors.
With the province of Ontario still owning 47 percent of the company, this became a key consideration when the UTC made its decision, even though Hydro One’s executives insisted the province acted as a “shareholder, not as a manager,” the regulators still disagreed.
There is good reason for the UTC to be concerned, too. Many people will remember the Ontario Government’s decision in July to force CEO Mayo Schmidt, who Premier Doug Ford dubbed the “Six Million Dollar Man” due to his salary, to retire. That prompted the company’s board of directors to quit en masse.
In their 44-page decision, the UTC wrote: “It became clear on and after July 11, 2018, that Hydro One’s directors cannot be considered independent and the province’s role is not limited to that of a minority shareholder in a publicly traded corporation.”
“In addition, the Ontario Minister of Energy introduced on July 16, 2018, Bill 2, the Urgent Priorities Act, 2018, which included in Schedule 1 the Hydro One Accountability Act. The new provincial government passed Bill 2 into law and it became effective on August 15, 2018. This new law gave the province a direct and active role in setting, and continuing oversight of, executive compensation at Hydro One. The law also amended the Ontario Energy Board Act, 1998,”
Government interference in a publicly traded company
Basically, Doug Ford has put his government’s nose where it doesn’t belong — into what is supposed to be the affairs of a public utility. Hydro One has the highest electricity rates in the province. with Toronto Hydro following in second place. And while Ford can blame renewables for the company’s problems, it all comes back to the company, and now, Doug Ford’s interference.
Ford issued a statement today, calling the failed acquisition “a deal that did nothing to lower hydro rates for Ontario residents.” And as for Schmidt’s dismissal, it was nothing more than the keeping of a campaign promise.
“While some critics might believe that the concerns of Ontario families, seniors, and businesses should take a back seat to foreign regulators, our government remains unwavering in our commitment to the people of Ontario to reduce hydro rates and provide a reliable energy system.”
“Upon assuming office we acted decisively to keep our promise to Ontario voters. I will never apologize for keeping my promises to the voters. We are reducing hydro rates and, after years of neglect, finally putting the ratepayer first.”
NDP Environment and Sustainability critic Ian Arthur slammed the Tories in a statement Wednesday, saying the regulator’s decision “makes it clear that Doug Ford’s political meddling has sent shockwaves through the business community and increased the risk of doing business in Ontario.”
The acquisition also had opponents in Oregon and Idaho, states where Avista has a significant presence. Both states cited the Ontario government’s interference in Hydro One’s affairs as something that was likely to continue into the future.
