If Avista Corp. is purchased by Canadian company Hydro One, customers of the Spokane-based utility will receive rate credits worth $31 million over the next decade.
The credit represents about 3.1 percent of Avista’s annual revenue. In filings with state regulators, Avista said the credit is proportional to the $100 million, 10-year rate credit Puget Sound Energy gave its customers after the Bellevue-based utility was acquired by an Australian company.
In Washington, the credit would save a typical residential customer about $4.32 each year on electricity and natural gas purchases, said Casey Fielder, an Avista spokeswoman.
The credit would increase slightly after five years. Idaho and Oregon customers would also be eligible for it.
Hydro One plans to buy Avista in a $5.3 billion cash purchase expected to close in August. Avista’s board of directors has endorsed the deal, saying the utility will retain a fair amount of local autonomy as a wholly owned subsidiary of Hydro One.
However, the transaction must be approved by regulators in each state where Avista operates. To sweeten the deal for regulators’ consideration, Avista and Hydro One proposed the 10-year rate credit.
In Washington, the state Utilities and Transportation Commission will evaluate the purchase and decide whether it’s in the best interest of Avista’s customers.
“We have a statute called ‘the net benefit’ standard,” said Amanda Maxwell, a commission spokeswoman.
For Avista’s sale to go through, Hydro One must demonstrate that ratepayers would not be harmed, and would actually benefit from the sale. The state Utilities and Transportation Commission will hold hearings in May. Members of the public will get a chance to weigh in at public hearings, Maxwell said.
A post-merger Avista will look very similar to today’s organization, company officials told state regulators in a series of filings.
Avista will keep its name and its corporate headquarters on Mission Avenue after the purchase. The company’s board of directors will retain a strong Northwest presence and Avista will continue its work in local philanthropy and economic development, the filings say.