Hydro One and Avista file a Settlement Agreement in Washington Merger Case

TORONTO and SPOKANE, Wash., March 27, 2018 (GLOBE NEWSWIRE) -- Hydro One Limited (“Hydro One”) (TSX:H) and Avista Corporation (“Avista”) (NYSE:AVA) today announced the achievement of an important milestone in the regulatory approval process of their proposed merger. The companies have filed an all-parties, all-issues settlement agreement in the merger proceeding before the Washington Utilities and Transportation Commission (the “Commission”). This represents a full settlement which all parties, including Commission Staff, have agreed is in the public interest and should be accepted by the Commission.

“I would like to thank all the parties that worked together to reach this significant milestone,” said Mayo Schmidt, President and CEO, Hydro One. “This positive step forward speaks to the long-term benefits of the union of Hydro One and Avista for customers, communities, employees and shareholders.”

“We believe this settlement agreement represents a positive outcome that is broadly supported by the parties and meets the net benefit standard for approval in Washington,” Avista Chairman and Chief Executive Officer Scott L. Morris said. “The settlement agreement reinforces the commitments we’ve made to our stakeholders to keep our headquarters in Spokane, maintain local decision-making, increase our charitable contributions and continue to support economic development, innovation and community involvement. The partnership with Hydro One will not result in the elimination of jobs or other cost-cutting that may affect customer service. We’re confident this settlement agreement enhances our ability to provide exceptional service and support to our customers and communities well into the future.”

The settlement includes financial and non-financial commitments. No costs associated with the transaction will be recovered from Avista or Hydro One customers. The September 2017 applications for state regulatory approval of the merger included a rate credit of approximately US$32 million over a 10-year period across Washington, Oregon and Idaho. This amounted to an allocation of an approximately US$20 million rate credit in Washington. The settlement, if approved, would result in the allocation to Washington of a rate credit of approximately US$31 million over a 5-year period.  In the settlement, Hydro One and Avista have also agreed to a number of other financial commitments, such as funding for low income participation in new renewables and the replacement of manufactured homes. As a result of the settlement, financial commitments in Washington total approximately US$44 million. While negotiations with parties in the other states are still underway and will be resolved on a state-by-state basis, if the financial commitments in the Washington settlement were to be proportionally allocated to the other states, the total amount of financial commitments would be approximately US$74 million, which includes a commitment to an additional US$1 million rate credit in Alaska.