Avista spokesman, GOP spar over utility sale

POST FALLS — Avista’s senior director for government relations weathered a storm of questions at Friday’s Panhandle Pachyderms meeting.

The guest speaker, Collins Sprague, heard accusations from the Republicans about selling out American sovereignty, imposing high rates on Avista customers, and even selling Avista’s dams to its Canadian suitor, Hydro One.

The proposed sale of Avista to Hydro One just seems like another backroom deal greased by special interests with campaign contributions, said Ann Seddon of Coeur d’Alene.

“I think your company is responsible for us not having trust,” she said.

Coeur d’Alene resident Tim Kastning asked Sprague to define how the sale would benefit Avista ratepayers. Sprague said the sale would lead to $15 million of aggregate rate credits for Avista customers over five years, plus $5 million in new money for energy programs in addition to what Avista already spends, and increases to Avista’s local charitable contributions.

However, Kastning noted that when the $15 million is spread out over all of Avista’s customers, the seemingly large amount will result in a difference of $1 per month, per customer.

Is that amount worth “selling critical infrastructure to a foreign company?” he asked.

Kastning also discounted the Idaho Public Utilities Commission’s efforts on the proposed sale.

“The Idaho PUC professes to be listening to us, but it seems to many of us that this is simply a dog and pony show, and that they’ll continue to do what they’re going to do,” the Kootenai County Republican Central Committee member said.

Don Bradway asked Sprague to tell the group the reasons why Avista wants to be bought. According to Sprague, it boils down to consolidation.

The energy sector has been consolidating for years, and it’s simply a matter of time until a larger company with deep pockets makes Avista an offer it can’t refuse, he said. Though large on the local scene, Avista ranks 46th among U.S. energy producers for market capitalization, Sprague said.

It has explored merging with like-sized regional companies but such a deal would create redundancies in headquarters, engineering, names, and other factors that Avista doesn’t want to lose. On the other hand, getting bought out by a tycoon like Warren Buffett would result in the gutting of Avista’s local control, name, local charitable efforts, and more. Getting bought out by Hydro One is preferable to either of these two alternatives, Sprague said.

However, Hydro One is akin to “Warren Buffett Lite,” said Alex Barron, another KCRCC member. Hydro One customers in Ontario pay some of the highest rates for electricity on the continent, and those rates harm businesses and individuals, he said. It’s that kind of power imbalance between private citizens and big entities that led many Kootenai County residents to move here from elsewhere, Barron said.

Rich Loudenback added that in 2016, 58,000 Hydro One customers in Ontario had their power shut off during the wintertime.

Sprague countered that Hydro One technically is not in the power generating business and does not have high rates. It owns the wires that deliver electricity, he said. After having been owned by the government as a crown corporation, three years ago Hydro One became a private company. Like any good capitalist entity, Hydro One wants to diversify its holdings and its sources of income, Sprague said.

In fact, Avista bought Alaska Electric Light and Power in 2014 for the same reason, he said. The only reason Avista is in Hydro One’s sights instead of other energy companies in Canada is that most such companies in Canada are still owned by the government, he said. Hydro One had nowhere to go but to the United States, Sprague said.

At $53 per share, and with an agreement that preserves Avista’s local control, local charitable commitments, headquarters, and name, Avista customers are getting a pretty good deal, he said.

So are Avista executives, Kastning said. The deal will result in $50 million in payouts to 13 Avista executives, plus additional payouts to Clearwater Paper, Idaho Forest Group, and the shutdown of a coal plant in Montana lauded by environmentalists, he added.