L9Johanna Riemenschneider

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1 ELLEN F. ROSENBLUM Attorney General FREDERICK M. BOSS Deputy Attorney General DEPARTMENT OF JUSTICE GENERAL COUNSEL DIVISION January 23, 2019 via Public Utility Commission of Oregon Attn: Filing Center 201 High Street SE, Suite 100 Salem, OR Re: UG - Staff's Application to Defer Avista Corporation's (Avista's) Termination Fee Revenue Resulting From Termination Of Merger Agreement Between Hydro One Limited, Olympus Holding Corp., Olympus Corp., and Avista Corporation Enclosed for filing is Oregon Public Utility Commission Staff's (Staff) Application to Defer Avista Corporation's Teiiiiination Fee Revenue Resulting From Termination Of Merger Agreement Between Hydro One Limited, Olympus Holding Corp., Olympus Corp., and Avista Corporation. A Notice of Application and copy of the Application have been sent to each person on the UG 325 service list. Sincerely, L9Johanna Riemenschneider Sr. Assistant Attorney General Business Activities Section JLM:pjr/# Enclosures, Telephone: (503) Fax: (503) TTY: (800)

2 BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON UM In the Matter of STAFF OF THE PUBLIC UTILITY COMMISSION OF OREGON, Application To Defer Avista Corporation's Termination Fee Revenue Resulting From Termination Of Merger Agreement Between Hydro One Limited, Olympus Holding Corp., Olympus Corp., And Avista Corporation. APPLICATION TO DEFER AVISTA CORPORATION'S TERMINATION FEE REVENUE RESULTING FROM TERMINATION OF MERGER AGREEMENT BETWEEN HYDRO ONE LIMITED, OLYMPUS HOLDING CORP., OLYMPUS CORP., AND AVISTA CORPORATION Pursuant to ORS and OAR , Staff of the Public Utility Commission of Oregon (Staff) files this Application to Defer Avista Corporation's (Avista's) Termination Fee Revenue Resulting From Termination Of Merger Agreement Between Hydro One Limited, Olympus Holding Corp., Olympus Corp., and Avista Corporation (Application). I. OAR (3) requirements. A. Expense or Revenue at Issue. Avista entered into an Agreement and Plan of Merger (Merger Agreement) on or about July 19, 2017 with Hydro One Limited, referred to therein as the "Parent", Olympus Holding Corp. and Olympus Corp. Avista is referred to in the Merger Agreement as the" Company". Under Section 7.3 of the Merger Agreement, the Parent, Hydro One Limited, shall pay or cause to be paid to the Company, Avista, a fee of $103,000,000 in the event the Merger Agreement is terminated in certain circumstances, including when "Regulatory Approvals" required under the Merger Agreement have not been obtained. On January 23, 2019, Avista filed a notice of termination in Docket UM Staff requests to defer, for potential later ratemaking treatment, the termination fee received by Avista as a result of termination of the Merger Agreement. Page 1- UM APPLICATION TO DEFER TERMINATION FEE REVENUE RESULTING FROM TERMINATION OF MERGER AGREEMENT BETWEEN HYDRO ONE LIMITED, OLYMPUS HOLDING CORP., OLYMPUS CORP., AND AVISTA CORPORATION JMR/pjr/#

3 1 B. Reason for Deferral. 2 Staff requests the Commission approve this Application pursuant to ORS (2)(e), 3 which provides the Commission with discretion to defer "identifiable utility expenses or 4 revenues, the recovery or refund of which the commission finds should be deferred in order to 5 minimize the frequency of rate changes or the fluctuation of rate levels or to match appropriately 6 the costs borne by and benefits received by ratepayers." The Parent's termination fee, when due 7 under the Merger Agreement, must be paid or caused to be paid, by the terms of the Merger 8 Agreement, to the Company no later than two (2) business days after the date of the applicable 9 termination. A deferral is necessary to account for payment of the termination fee to Avista, and 10 enable the Commission to authorize refund to customers an appropriate amount. Deferral of the 11 termination fee amount for later ratemaking purposes allows for consideration of the appropriate 12 matching of costs borne by and benefits received by ratepayers. 13 C. Proposed Accounting. 14 Staff requests that the deferred amounts be recorded in FERC Account 434, 15 Extraordinary Income. 16 D. Estimate of Amounts to be Recorded in Deferred Account. 17 The amount to be recorded is $103,000,000. In the event of a change in the amount to be 18 paid to Avista, Staff will supplement this Application with a revised estimate. 19 E. Notice. 20 A copy of the Notice of Application and a list of persons served with Notice are attached 21 to this Application as Exhibit A. 22 II. Staff contacts. 23 Communications regarding this Application should be addressed to: Johanna Riemenschneider Marianne Gardner 25 Oregon Public Utility Commission of Oregon 201 High Street SE, Suite Salem, Oregon Salem, Oregon johanna.riemenschneider@state.or.us marianne.gardner@state.or.us Page 2- UM APPLICATION TO DEFER TERMINATION FEE REVENUE RESULTING FROM TERMINATION OF MERGER AGREEMENT BETWEEN HYDRO ONE LIMITED, OLYMPUS HOLDING CORP., OLYMPUS CORP., AND AVISTA CORPORATION JMR/pjr/#

4 1 III. Conclusion 2 For the reasons stated above, Staff respectfully requests that the Commission authorize 3 the deferral of Avista's termination fee revenue resulting from termination of the Merger 4 Agreement between Hydro One Limited, Olympus Holding Corp., Olympus Corp., and Avista 5 Corporation. 6 7 DATED this 5 day of January Respectfully submitted, 9 ELLEN F. ROSENBLUM 10 Attorney General J anna Riemenschneider, OSB # r. Assistant Attorney General 13 Of Attorneys for Staff of the Public Utility Commission of Oregon Page 3- UM APPLICATION TO DEFER TERMINATION FEE REVENUE RESULTING FROM TERMINATION OF MERGER AGREEMENT BETWEEN HYDRO ONE LIMITED, OLYMPUS HOLDING CORP., OLYMPUS CORP., AND AVISTA CORPORATION MR/pjr/#

5 In the Matter of STAFF OF THE PUBLIC UTILITY COMMISSION OF OREGON, BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON UM Application To Defer Avista Corporation's Termination Fee Revenue Resulting From Termination Of Merger Agreement Between Hydro One Limited, Olympus Holding Corp., Olympus Corp., and Avista Corporation NOTICE OF APPLICATION TO DEFER AVISTA CORPORATION'S TERMINATION FEE REVENUE RESULTING FROM TERMINATION OF MERGER AGREEMENT BETWEEN HYDRO ONE LIMITED, OLYMPUS HOLDING CORP., OLYMPUS CORP., AND AVISTA CORPORATION On January 23, 2019, Staff of the Public Utility Commission of Oregon (Staff) filed an Application to Defer Avista Corporation's (Avista's) Termination Fee Revenue Resulting From Termination Of Merger Agreement Between Hydro One Limited, Olympus Holding Corp., Olympus Corp., And Avista Corporation (Application). Avista entered into an Agreement and Plan of Merger (Merger Agreement) on or about July 19, 2017 with Hydro One Limited, referred to therein as the "Parent", Olympus Holding Corp. and Olympus Corp. Under Section 7.3 of the Merger Agreement, the Parent, Hydro One Limited, shall pay or cause to be paid to the Company, Avista, a fee of $103,000,000 in the event the Merger Agreement is terminated. On January 23, 2019, Avista filed a notice of termination in Docket UM Staff filed its Application in order to defer, for potential later ratemaking treatment, the termination fee payable to Avista. Approval of Staff's Application will not authorize a change in Avista's rates, but will permit the Commission to consider allowing such deferred amounts in 25 rates in a subsequent proceeding. 26 Persons who wish to obtain a copy of Staff's Application will be able to access it on the Page 1- UM NOTICE OF APPLICATION TO DEFER TERMINATION FEE REVENUE RESULTING FROM TERMINATION OF MERGER AGREEMENT BETWEEN HYDRO ONE LIMITED, OLYMPUS HOLDING CORP., OLYMPUS CORP., AND AVISTA CORPORATION JMR/pjr/

6 1 2 Public Utility Commission of Oregon's website. Any person who wishes to submit written 3 comments on Staff's Application should do so by February 28, DATED this Z3 day of January Respectfully submitted, 7 ELLEN F. ROSENBLUM Attorney General ,Tbhanna Riemenschneider, OSB # Assistant Attorney General Of Attorneys for Staff of the Public Utility Commission of Oregon Page 2- UM NOTICE OF APPLICATION TO DEFER TERMINATION FEE REVENUE RESULTING FROM TERMINATION OF MERGER AGREEMENT BETWEEN HYDRO ONE LIMITED, OLYMPUS HOLDING CORP., OLYMPUS CORP., AND AVISTA CORPORATION JMR/pjr/

7 UG - CERTIFICATE OF SERVICE I hereby certify that I have this day caused Staffs Application to Defer Avista Corporation's (Avista's) Termination Fee Revenue Resulting From Termination Of Merger Agreement Between Hydro One Limited, Olympus Holding Corp., Olympus Corp., and Avista Corporation to be served by electronic mail to those parties whose addresses appear on the attached service list for OPUC Docket UG 325. DATED this 2'3 day of January C ii...-. Jghanna Riemenschneider, OSB # r. Assistant Attorney General Of Attorneys for Staff of the Public Utility Commission

8 UG 325 Service List IVANA ERGOVIC NEXUS CAPITAL GROUP TOMMY BROOKS CABLE HUSTON BENEDICT HAAGENSEN & LLOYD CHAD STOKES CABLE HUSTON BENEDICT HAAGENSEN & LLOYD OPUC DOCKETS OREGON CITIZENS' UTILITY BOARD MICHAEL GOETZ OREGON CITIZENS' UTILITY BOARD ROBERT JENKS OREGON CITIZENS' UTILITY BOARD SOMMER MOSER OREGON DEPARTMENT OF JUSTICE JOHANNA RIEMENSCHNEIDER OREGON DEPARTMENT OF JUSTICE MARIANNE GARDNER PUBLIC UTILITY COMMISSION OF OREGON EDWARD FINKLEA NORTHWEST INDUSTRIAL GAS USERS AVISTA CORPORATION DAVID MEYER AVISTA CORPORATION KELLY 0 NORWOOD AVISTA UTILITIES 666 5TH AVE. 9TH FL NEW YORK, NY IVANA@NEXUS-CAP.COM 1001 SW FIFTH AVE., STE PORTLAND, OR TBROOKS@CABLEHUSTON.COM 1001 SW FIFTH AVE., STE PORTLAND, OR CSTOKES@CABLEHUSTON.COM 610 SW BROADWAY, STE. 400 PORTLAND, OR DOCKETS@OREGONCUB.ORG 610 SW BROADWAY, STE. 400 PORTLAND, OR MIKE@OREGONCUB.ORG 610 SW BROADWAY, STE. 400 PORTLAND, OR BOB@OREGONCUB.ORG 1162 COURT ST. NE SALEM, OR SOMMER.MOSER@DOJ.STATE.OR.US 1162 COURT ST. NE SALEM, OR JOHANNA.RIEMENSCHNEIDER@DOJ.STATE.0 R.US PO BOX 1088 SALEM, OR MARIANNE.GARDNER@STATE.OR.US 545 GRANDVIEW DR. ASHLAND, OR EFINKLEA@NWIGU.ORG 1411 EAST MISSION PO BOX 3727 SPOKANE, WA DOCKETS@AVISTACORP.COM 1411 EAST MISSION PO BOX 3727 SPOKANE, WA DAVID.MEYER@AVISTACORP.COM 1411 EAST MISSION PO BOX 3727 SPOKANE, WA KELLY.NORWOOD@AVISTACORP.COM

OPUC Docket UM ; Application for Authorization to Defer Certain Expenses or Revenues Relating to MCBIT

OPUC Docket UM ; Application for Authorization to Defer Certain Expenses or Revenues Relating to MCBIT Kyle Walker, CPA Rates/Regulatory Analyst Tel: 0.. Ext. Fax: 0.1.1 Email: Kyle.Walker@nwnatural.com VIA ELECTRONIC FILING November, 01 Public Utility Commission of Oregon Attention: Filing Center 01 High