December 5, 2018 / 11:20 PM / 13 days ago

Washington regulators reject Avista's sale to Canada's Hydro One

Dec 5 (Reuters) - Washington regulators on Wednesday rejected Canadian electric utility Hydro One Ltd’s proposed acquisition of rival Avista Corp, saying the deal does not serve the public interest.

Hydro One had proposed to buy Avista for C$6.7 billion ($5.02 billion) in 2017 as it sought to expand into the U.S. Northwest.

"The proposed transaction cannot be said to be consistent with the public interest when it is evident that decisions affecting Hydro One's and Avista's business operations and financial integrity are subject to political considerations," the Washington Utilities and Transportation Commission said here

The Ontario government owns 47 percent of Hydro One.

According to the commission, post the June 2018 general election in the Province of Ontario, the province and Hydro One announced an agreement that led to the replacement of the company’s board and the retirement of its chief executive officer.

Upon investigation, the commission said it found that the resignation of the board and the CEO elevated the government’s political interests than that of the stakeholders, including investors that owned stakes in Hydro One.

The deal would not benefit customers of Spokane, Washington-based Avista and would not meet the net-benefit standard required by state law, the commission said.

“Provincial government interference in Hydro One’s affairs, the risk of which has been shown by events to be significant, could result in direct or indirect harm to Avista if it were acquired by Hydro One,” the commission said.

Hydro One and Avista were not immediately available for comments. ($1 = 1.3356 Canadian dollars) (Reporting by Nivedita Balu in Bengaluru; Editing by Anil D’Silva)

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