There are always many potential threats to the well-being of our citizenry, but the threat to Avista Utilities customers, and local businesses, from the acquisition of Avista by Hydro One of Ontario is very real indeed.
The majority of Avista customers abide in Eastern Washington and North Idaho. The primary threat is that electricity rates can triple within a short time after the purchase has been completed.
Hydro One is under pressure to find other Utility Companies like Avista to share their pain with. That is because of past incompetence. Hydro One has the highest electrical rates in North America. If they can absorb Avista with its cheap hydroelectricity they can pass on a portion of their higher costs to Avista customers, thus mitigating the higher rates of their present Ontario customers. Hydro One needs Avista more than Avista needs Hydro One.
There is no public benefit to the deal. The only people to benefit are the stockholders of Avista, and the 13 member Avista Board who will split the $50 million signing bonus.
It is difficult to say how much rates would climb since no cost-sharing agreement will be published until after the acquisition has been approved by the Washington Utilities and Transportation Commission. The potential though is for rates to Avista customers to triple from $.08/KWH to $.24 or higher. For instance, if a family pays $100/month for electricity now they could be paying $300-400/month under Hydro One.
The median family income in Spokane County was reported at $53,000 in 2016, which doesn’t sound too bad but you have to figure in that many families at the top of the scale have six figure incomes which skews the average. Many families barely have any discretionary income left over after they pay their fixed expenses, and higher electric bills would put a significant number of families under break even.
As Spokane County Treasurer I see the purchase of Hydro One as a threat to our tax base. If people have a choice of turning up the heat real time in cold weather, or facing foreclosure in three years for delaying payment of their property taxes, they will likely turn the heat up. In addition, Spokane County has been trying to attract new businesses to provide living wage jobs for its growing population, but higher electrical rates would discourage new business, and may even cause some businesses to move away.
Again, as Spokane County Treasurer I have a fiduciary duty to protect our tax base. On July 23rd I filed with the State Attorney General’s office to ensure the Washington Utilities and Transportation Commission coordinate with local residents on an equal basis in the matter of the purchase of Avista by Hydro One of Ontario. I do not think that a vague foreign entity should be setting our electrical rates, or controlling our dams and other assets.
The process of Coordination comes from the 1970 National Environmental Act. NEPA states that if there is any threat by an agency to the local “human environment”, then it must coordinate with local elected officials. The “human environment” consists of not only flora and fauna, but also customs, history, culture, and the local economy. “Coordinate” does not mean cooperate or negotiate. It means coordinating on an equal basis. If the purchase can prove there is a net positive effect on Spokane County then it may move forward, but I don’t see how that can be proven when the previous facts I have mentioned are taking into consideration.
Usually it is a City Council or Board of County Commissioners which invokes coordination, but in this case so many of them have received campaign donations from Avista they would likely be reticent to do so. My invoking coordination on July 23rd was the first time a solitary elected official has done so. There is nothing in NEPA about a plurality, so as County Treasurer protecting the tax base of Spokane County I am only following Federal Law. The WUTA, Hydro One, and Avista must also follow Federal Law.
