Idaho Officials Clear Wwp Merger Decisions From Other States Expected Within Two Weeks

Idaho regulators have approved the proposed merger of Washington Water Power Co. and Sierra Pacific Resources.

And utility spokesman Kelly Norwood said decisions from the three other state commissions still reviewing the merger are expected within the next two weeks.

The deal, which will create a new utility called Resources West Energy Inc., must also be scrutinized by the Federal Energy Regulatory Commission.

WWP delivers electricity and natural gas to customers in Eastern Washington and North Idaho, and gas to parts of Oregon, and California. Reno-based Sierra supplies electricity, gas and water in Nevada and California.

Only Montana, where WWP serves a few employees at its Noxon dam site, and Oregon have already approved the merger.

The Idaho Public Utilities Commission ruling closely resembles a preliminary agreement reached last spring between its staff and WWP negotiators.

But the utility will be allowed to earn a slightly smaller return on equity than the staff pact would have allowed.

Also, the company will have to meet a higher standard of proof if it seeks relief from a five-year rate freeze due to “uncontrollable events.”

“We hereby place Resources West on notice that we intend to hold it strictly to the rate freeze agreement and that exceptions will be allowed only in extraordinary circumstances,” the commission ruling says.

Norwood said the ceiling put on what the company can earn on equity should not be a problem for WWP. At 12 percent, the cap is higher than companywide returns in any of the last three years, he said.

Returns above 12 percent would be split 50-50 with customers.

“If we’re earning on that level it’s a pretty good deal,” Norwood said.

Another section of the ruling reflects the jostling among the various state commissions to ensure their consumers get a fair share of the merger’s projected $450 million, 10-year savings.

Norwood said the company will have to assume the share of an executive salary, for example, not fully apportioned among the states in future rate cases.

, DataTimes