By Karen Schumacher
Aside from the possibility that Avista customers in Washington, Idaho, Oregon, Montana, and Alaska will be under a Canadian electric utility, Hydro One, there is a far more serious problem in that a U.S. electrical grid will be run by a foreign country. Although this article focuses on Idaho, the same issues also affect the other states as well.
Hydro One is a Canadian electricity transmission and distribution service provider. Even though Hydro One is a private company, up until 2015 the Government of Ontario held 100% of its shares, at which time the government decided to sell up to 60% shares to raise money for infrastructure improvements. One concern expressed at that time was the possibility of foreign investments, which did happen with the Bahrain Gulf International Bank (GIB) holding approximately 93k shares. As of May, 2017 Ontario held the remaining 49.9% shares.
In July, 2017 Hydro One bought the American energy company Avista for $5.3 billion U.S. dollars as part of their plan "to grow our business to become a North American leader", creating "one of the largest regulated utilities in North America." Avista will be allowed to "keep its existing corporate headquarters... and continue to operate as a stand-alone utility in Washington, Oregon, Idaho, Montana and Alaska." Scott Morris, Avista president, likes this deal because of future "opportunities in a consolidating industry landscape for the benefit of our customers.” Morris also stated, "The partnership largely allows Avista to preserve how it does business with its customers, enables it to continue to pursue technological innovation, and permits it to take advantage of operating efficiencies and shared best practices".
Sovereign boundaries between countries are now nothing more than an industry landscape? Ontario sits on the border from Minnesota to New York, now northwest states are part of this landscape?
According to Daiene Vernile, Member of Provincial Parliament, the Ontario Energy Board will set rates and Ontario will retain regulatory control. She better get together with Scott Morris, there seems to be a disconnect between their understanding of the deal. Wow, American electricity rates under a foreign country. Avista shareholders approved the deal November 21, 2017 but Avista is already being investigated for "potential breach of fiduciary duty claims against the Board of Directors". The deal requires the approval of the Idaho Public Utilities Commission (IPUC) and per this October 5, 2017 Order Avista promises no increased rate hikes and better service, Avista stock will be purchased by Hydro One, and August 14, 2018 is the final date of closure on the deal. On the other hand IPUC must find that "the transaction is consistent with the public interest". How is selling an Idaho utility out to a foreign country or allowing a foreign country determine what rates an Idahoan pays for electricity consistent with public interest? Entangling our electrical assets with foreigners has been going on for some time, such as the San Diego Gas & Electric entering into a "partnership" with the Russian Federation in 2010.
As part of the deal Hydro One will now also own Avista dams including the Upper Falls, Monroe Street, Nine Mile, Little Falls, and Long Lake dams in Washington and the Cabinet Gorge and Post Falls dams in Idaho, found on this map.
Rates were already rising prior to the selling of Ontario shares. Dismantling Ontario Hydro created a $38.1 billion debt, paid off by ratepayers through the “debt retirement fee” which was removed in 2016. However, Ontario residents continued paying higher rates, attributed to an oversupply of power, the cost of green energy such as wind and solar, and poor government management. Ontario recently took action to reduce rates while continuing reduced rate programs for those in certain categories ensuring "greater fairness". Hydro One has a history of poor billing service and was also ordered to cut administrative costs this year. In 2016 an audit revealed customers were overcharged $37 billion. Is this the type of financial mismanagement now being brought to Idahoans? Hydro One intends to continue buying U.S. electric companies which could potentially put them in control of all Pacific Northwest electrical coverage.
The way in which our energy is regulated is complex and only a few aspects are covered here. The most disturbing aspect of this transaction is the advancement of the Department of Energy's (DOE) intent to "harmonize" the Electricity Sectors across North America, which means "fully integrating energy policies" between the U.S., Canada, and Mexico, and integrating electrical grids. The North American Electric Reliability Corporation (NERC) is a "not-for-profit international regulatory authority whose mission is to assure the reliability and security of the bulk power system in North America.", and whose "jurisdiction includes users, owners, and operators of the bulk power system..." which stretches from Baja Mexico, through the United States, into Canada. Here is the NERC map. The Pacific Northwest states are located in the Western Electricity Coordinating Council (WECC) region. Hydro One is located in the Northeast Power Coordinating Council (NPCC). Integrating our electrical grid with Canada has been advancing since at least 2012.
Electrical grids are separated into three areas, generation (hydropower, renewable, coal), transmission (lines that carry electricity), and distribution (electricity delivered customers). The WECC Bulk Power System (BPS) includes transmission equipment which generate and deliver electricity across North America but does not include local distribution systems. Below is a BPS graphic. NERC has a delegation agreement with WECC to ensure WECC reliability standards are met and advance NERC reliability standards, which are international.