PSC Approves Purchase of Avista, Part Owner of Colstrip, by Hydro One
HELENA, Mont. – June 12, 2018 – Today the Montana Public Service Commission approved Hydro One’s acquisition of Avista Corp., part owner of Colstrip units 3 & 4, by a vote of 4-1. The commission added several conditions to the approval designed to protect the public interest of Montanans and the continued operation of Colstrip generating facility units 3 & 4.
Commissioner Bob Lake (R-Hamilton), whose district includes Avista’s Montana customers and hydroelectric generation facilities, said, “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. Because it’s a Canadian company, that causes greater concerns, but their history of quality and reliable service made the decision easier.”
Hydro One Limited, a Canadian utility company, is attempting to acquire Avista Corporation, a utility that supplies electricity and natural gas in Montana and several other states. Avista has only 32 customers in Montana, but owns a 15 percent stake in Colstrip units 3 & 4 as well as some hydroelectric generation assets in Montana.
Because Avista serves customers in multiple states, the merger also has to be approved by several state utilities commissions, including Washington, Idaho, Oregon, Alaska, and various federal agencies. As part of that approval process, Avista and Hydro One have reached settlements with various interested parties in the affected states. Importantly, these settlements have included an accelerated depreciation schedule for Colstrip units 3 & 4 with an end-of-useful life date of 2027.
The accelerated depreciation schedule caused some Montana commissioners to express concern that it might result in the premature retirement of the Colstrip units.
In order to protect against any risk of early closure of Colstrip, the Montana commission’s resolution specifically opts out of the 2027 depreciation schedule for ratemaking purposes in Montana, and notes that the co-owners’ agreement for Colstrip units 3 & 4 does not allow for a unilateral end date.
Commissioner Tony O’Donnell (R-Billings), whose district includes Colstrip, opposed the sale, saying, “It was a tough decision. 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.”