Utilities Ask Direction From Ferc

Washington Water Power Co. and Sierra Pacific Resources may suggest a way to settle issues that caused regulators to delay their proposed merger last week.

WWP spokesman Pat Lynch said the companies will have a better sense of their options after a Federal Energy Regulatory Commission meeting today at which members will set hearings on the transaction.

The federal regulators surprised the companies and most observers last week when they failed to approve the merger on the spot.

Regulators in the six states where the companies would operate had already given their consent, prompting optimism that the deal might close by year-end.

That timetable could be set back several months while an administrative law judge holds hearings and issues findings in the case for subsequent review by the commission.

The merger between Spokane-based WWP and Reno-based Sierra was announced in June 1994.

Lynch said utility officials were not sure what to expect today.

“There’s not a whole lot of precedent,” he said, for hearings into a utility merger.

The last case involved the combination of two Ohio utilities in 1980, Lynch said. The hearing process took 10 years.

He declined to be specific about what the merger partners might propose to FERC officials that would streamline consideration of the deal.

In the order issued last week, members said WWP and Sierra had failed to prove the merger was in the public interest. They challenged the $450 million in savings over 10 years the utilities say would result, and said the combined utilities might block access to parts of their transmission grid by other potential users.

They also noted that previously approved mergers provided for uniform pricing of transmission throughout newly combined grids.

WWP and Sierra would maintain the divide between their systems, assuring that Washington and Idaho ratepayers would continue to pay bills substantially below those of Sierra’s Nevada customers.

, DataTimes