Wwp, Sierra Pacific Part On Friendly Terms Utilities Sign Memorandum; Wwp Drops Defensive Lawsuit

Washington Water Power Co. and Sierra Pacific Resources parted company amicably last week, a month after WWP abruptly pulled the plug on their planned merger.

WWP Chairman Paul Redmond and Sierra Chairman Walter Higgins signed a memorandum in which Sierra agreed WWP had the right to terminate the deal.

In return, WWP sought and obtained the dismissal of a lawsuit it filed last month that asked a Spokane County Superior Court judge to make the same call.

The Spokane company was also asking the court to hold it harmless for expenses Reno-based Sierra incurred over the more than two years the two utilities worked to bring their organizations together.

The companies spent about $15 million each trying to push the merger through a regulatory process that culminated in late June with hearings before the Federal Energy Regulatory Commission.

When the hearings indicated a continued impasse between the commission staff and utility officials regarding rates and other matters, WWP’s directors voted June 27 to abandon the effort.

Although Higgins indicated a few days later he was satisfied WWP officials had made a good faith effort to complete the merger, he was unwilling to forswear a bid to recover Sierra’s merger-related expenses until he discussed the matter with company directors.

WWP Vice President Jon Eliassen said the memorandum and dismissal of the lawsuit should put the merger behind the companies.

Executives wanted a friendly conclusion to the process because the companies will continue to do business together, he said.

But the memorandum does provide that, if a dispute regarding the termination arises in the future, the case will be heard in U.S. District Court for Eastern Washington.

The original merger agreement was signed June 27, 1994, after months of negotiations between officials of the two companies.

, DataTimes