Alaska Electric Light & Power’s parent company says its acquisition by Hydro One remains on track. That’s despite political pressure that forced the resignation of the Canadian company’s leaders.
Hydro One has been roundly criticized in Canada over rising utility rates. Ontario’s newly elected leader Doug Ford had made the company’s unpopularity a campaign issue.
“I said over and over and over again on the campaign trail the CEO of Hydro One and the board will be gone,” Ford said during a July 12 press conference. “I’m happy to say today the CEO and the board of Hydro One, they’re gone. They’re done.”
Hydro One had been publicly owned until 2015. But the province of Ontario still holds a minority stake, which coupled with Ford’s bully pulpit, was apparently enough to force the company’s leadership to resign.
Market analysts warn the upheaval could delay or even torpedo the $5.3 billion deal to acquire AEL&P’s parent company Avista.
The Hydro One-Avista transaction requires approval in five states and is still being reviewed by state regulators in Oregon, Idaho and Washington. Regulators in Alaska and Montana have already signed off.
“We remain committed to this merger with Hydro One and believe that it still adds benefits to all of our stakeholders,” said Casey Fielder, a spokeswoman for Avista in Spokane, Washington. “With regards to AEL&P, they’ll continue to manage the operations there in Juneau and this should not have a material impact on the customers there in Juneau.”
Avista penned a seven-page letter to Alaska regulators on Wednesday reaffirming its commitment to the deal. It stated that structural arrangements would insulate operations of its subsidiaries from changes of leadership at Hydro One.
Closer to home, AEL&P is celebrating its 125th anniversary on Friday afternoon in Juneau’s Cope Park.
“Actions in Ontario will not impact our ability to serve our customers,” AEL&P’s spokeswoman Debbie Driscoll said Thursday. “AEL&P remains focused on our operations and providing clean and reliable power to the community of Juneau as we always have been.”
Market analysts say the risks to the Avista-Hydro One merger remain twofold: if any one of the five state regulators declines to approve the deal, it would trigger a domino effect.
The other risk is that Hydro One’s new leadership team – which has yet to be named – could cancel the Avista deal.
Analysts agree both scenarios are unlikely but possible.