The sale of Avista to Hydro One has been negatively commented on by CAPR and many citizens of Washington State. Citizens in Idaho also are in opposition to the sale. The Washington State Utilities and Transportation Committee (WTUC) ultimately must make a judgement on if the sale will be a net benefit to the citizens of the state, yet the commission seems set on a track that ignores comments from the public and actions taken in Idaho and Washington that oppose the sale and seek to have the recognition of the public's opposition.
The Public Council Division of the Washington State Attorney General’s office was party to the negotiations that finalized the details of the sale of Avista to Hydro One. They recommend approval of this deal to the UTC based on a finding that there is a net benefit to the rate payer. The purported benefits are transient at best, are not permanent by any means, and are politically driven rather than factual:
1. Customer Rate Credit: $30.7 Million in rate credits to customers spread over 5 years. This amounts to a $1.30 reduction in the monthly utility bill for 5 years. Put in the context of the $50.5 Million Severance package shared by 13 Avista executives and Avista’s $120 Million annual net profit, this is peanuts. Avista could provide this benefit without Hydro One. Hydro One is not a charity. They will get their money back in higher rates over time.
2. Low income benefits. $11 Million in assistance to low income customers doing such things as weatherization and green energy assistance to low income people. No time period was specified. Avista has had similar programs over the years. They don’t need Hydro One for this “benefit”. Again, Hydro One is not a charity. They will get their money back in higher rates over time.
3. Coalstrip (coal mine in Montana) Avista will recover costs of Units 3 and 4 quicker than planned due to new tax law. This is not a benefit. It is doing normal business. They don’t need Hydro One for this non benefit.
4. Environmental Benefits. Avista will seek 50 aMW of cost effective renewable energy and an additional 90 aMW of renewable energy when the 222 aMW Coal strip plants close. So we lose 222 aMW of base load generating capacity and replace it with 140 aMW of renewables that probably cannot be counted on for base load. There is no mention of Coal strip closing ahead of schedule. Considering that China is expected to add the equivalent of a new 600-megawatt (800,000 HP) plant every 10 days for the next 10 years , closing Coalstrip, someday, and patting yourself on the back for the CO2 savings is just virtue signaling. This is not a benefit. This is virtue signaling.
5. Service quality. Avista will maintain it’s service quality metrics for 10 years. Avista service is good now. What happens after 10 years? This is not a benefit that requires Hydro One to maintain good service. It is not a benefit at all.
6. Bankruptcy Protection. Avista and Hydro One hired a consultant to find that Avista is well protected against a bankruptcy of Hydro One. Yet, the fact is if Avista is not sold to Hydro One, we would be in no danger if Hydro One went bankrupt. This is not a benefit.
7. Most-Favored Nations Provision: Washington State gets the same deal as the best deal offered to other states. This is not a benefit.
The commission has received 411 public comments to date on the proposed merger with Hydro One – 328 opposed, 13 in favor and 70 undecided.
Rob Chase, Spokane County Treasurer explains the importance of this pending decision in this article for the Gem State Patriot:
https://gemstatepatriot.com/blog/nepa-coordination-avista-hydro-one/
Rob Chase, Treasurer of Spokane County has invoked the constitutional remedy of coordination, and has engaged Fred Kelly Grant to inform the WTUC of the coordination process and how this will be applied to the decision making of the WTUC. In a recent letter, the WUTC has not denied the existence of the coordination process, but have denied it applies to the Avista/Hydro One decision making. Mr. Chase had begged to differ in a separate missive to Mr. Johnson of the WTUC explaining why it does in fact apply:
I disagree with your argument that the National Environmental Policy Act of 1970 does not apply to the acquisition of Avista by Hydro One.
The sale of Avista involves a foreign entity, and the Columbia River and its tributaries is where Avista serves much of its hydro-electric power, and those waterways are under Federal jurisdiction.
NEPA applies where a process
- Involves work performed by the Federal Government
- IS Funded by Federal Funds, in whole or part
- IS OR may be licensed or permitted by a Federal Agency
Under Title 42 USC Section 4331(a)&(b):
a) The Congress, recognizing the profound impact of man’s activity on the interrelations of all components of the natural environment,… to use all practicable means and measures, including financial and technical assistance, in a manner calculated to foster and promote the general welfare, to create and maintain conditions under which man and nature can exist in productive harmony, and fulfill the social, economic,and other requirements of present and future generations of Americans.
(b) In order to carry out the policy set forth in this chapter, it is the continuing responsibility of the Federal Government to use all practicable means, consistent with other essential considerations of national policy, to improve and coordinate Federal plans, functions, programs, and resources to the end that the Nation may
So, by Federal Law:
- Government policy is to cooperate with State and Local Governments
- For coordination of Plans, Functions, Programs, Actions and Resources
- In a manner of serving the general welfare and to reach a harmonies relationship between man and nature
- And has a continuous responsibility to use all practicable means to the fullest extent possible to effect the policy of COORDINATION!
42 U.S. Code § 4332 - Cooperation of agencies; reports; availability of information; recommendations; international and national coordination of efforts.
- “The Congress authorizes and directs that, to the fullest extent possible: (1) the policies, regulations, and public laws of the United States shall be interpreted and administered in accordance with the policies set forth in this chapter …
So, by Federal Law
- Government policy is to cooperate with State and Local Governments
- For coordination of Plans, Functions, Programs, Actions and Resources
- In a manner of serving the general welfare and to reach a harmonious relationship between man and nature
- And has a continuous responsibility to use all practicable means to the fullest extent possible to effect the policy of COORDINATION!
42 U.S. Code § 4333 – Conformity of administrative procedures to national environmental policy
- All agencies of the Federal Government shall review their present statutory authority, administrative regulations, and current policies and procedures for the purpose of determining whether there are any deficiencies or inconsistencies therein which prohibit full compliance with the purposes and provisions of this chapter and shall propose to the President not later than July 1, 1971, such measures as may be necessary to bring their authority and policies into conformity with the intent, purposes, and procedures set forth in this chapter.
40 Code of Federal Regulations 1500.2
- Policy:Federal agencies SHALL, to the fullest extent possible,
- (d) “Encourage and facilitate public involvement in decisions which affect the quality of the human environment.”
- (e) “Use the NEPA process to identify and assess the reasonable alternatives to proposed actions that will avoid or minimize adverse effects of the actions upon the quality of the human environment.”
Human environment:
Is Defined as an environment which includes:
Ecological, Aesthetic, Historic, Cultural, Economic, Social, and Health elements of life in the community.
- 1500.1 Purpose: “The National Environmental Policy Act (NEPA) is our basic national charter for protection of the environment. It establishes policy, sets goals (section 101), and provides means (section 102) for carrying out the policy.
- Section 102(2) contains
“ACTION FORCING provisions to make sure that federal agencies act according to the letter and spirit of the Act.
The regulations that follow implement section 102(2). Their purpose is to tell federal agencies what they must do to comply with the procedures and achieve the goals of the Act. The President, the federal agencies, and the courts share responsibility for enforcing the Act so as to achieve the substantive requirements of section 101.”
Specific Federal Agency Regulations
- Federal Energy Regulatory Commission (FERC)
- On December 26, 2006 the FERC issued a Final Rule (Order 687) and regulations establishing the process by which the FERC will exercise its new responsibilities under section 313 of EPAct 2005. We note that nothing in EPAct 2005 or the Commission’s regulations preempt existing agency timelines mandated by federal law or regulation. Specifically, the FERC is now required to:
- Act as the lead agency for purposes of complying with the National Environmental Policy Act;
- DOE adopts the regulations for implementing NEPA published by CEQ at 40 CFR parts 1500 through 1508.
Securities and Exchange Commission
- §200.552 NEPA planning.
- Where it is reasonably foreseeable by the Commission that it may be required to act on a matter specified in §200.551 and that matter is likely to involve major Federal action significantly affecting the quality of the human environment, the Commission shall:
- (a) Advise the relevant persons as to information respecting the environment, if any, which may later be required to be submitted for Commission consideration should Commission action become necessary;
- (b) Consult on any environmental factors involved with individuals, organizations, and state and local authorities interested in the planned action; and
- (c) Begin implementing the procedures set forth in §§200.553 and 200.554 as soon as possible, Provided, That such procedures are not inconsistent with the Commission's authority under the Federal securities laws.
As you can see by the preceding I am simply following Federal Law by invoking coordination in the matter of the Hydro One purchase of Avista.
I am Spokane County Treasurer where Avista is headquartered and whose residents are largely served by Avista.
The outreach to local elected officials has been wanting since I know of very few elected officials who are aware of the ramifications to their constituents if the merger takes place.
If electrical rates climb as they have in Ontario this would create a huge hardship on residents and businesses in the area. This would have a negative effect on our local economy and tax base. We can only speculate on future rates since there has been no Cost Sharing Agreement published.
I believe the control of our dams, assets, and rates by a foreign entity is a question of national security.
In light of the preceding I believe I have a fiduciary authority of trust to protect the tax base of Spokane County and I am acting within my duties of Spokane County Treasurer to compel you to Coordinate with me and other Avista Customers and residents of Counties who would be negatively affected by the acquisition of Avista by Hydro One of Ontario.
Sincerely,
Rob Chase
Spokane County Treasurer
The WTUC has scheduled a hearing of Avista and Hydro One for October 23rd, at 9:30 am, this hearing is open to the public and will be held at the WUTC Headquarters (Richard Hemstad Building)
Room 206
1300 S. Evergreen Park Drive S.W.
Olympia, Washington
October 17, 2018