Idaho utility regulators approved the proposed merger of PacifiCorp and ScottishPower Monday, leaving Utah as the last obstacle to closing the deal.
But the three-member Idaho Public Utilities Commission's vote on the $11 billion combination of Utah Power's parent company with the British utility was not unanimous.IPUC President Dennis Hansen voted against the merger, saying the companies did not prove that the deal will not hurt Idaho customers.
"In essence, I believe that the commission is being requested to approve this merger before the essential information regarding the impact the merger will have on ratepayers is known -- even to the applicants," Hansen said in his dissenting opinion. "And once the merger is approved, it cannot be undone."
Despite that dissent, ScottishPower officials said they were pleased with the majority ruling in favor of the merger.
"We're obviously disappointed that commissioner Hansen was unable to commit to the approval," said Andrew MacRitchie, the ScottishPower official who is overseeing the U.S. merger approval process. "But at the end of the day, the order as it reads is very supportive of what we're doing. Some of the terminology in the order says the merger 'will usher in a new era of electric utility service that is more customer oriented.' It's very positive."
The merger, which will represent the first foreign takeover of a U.S. electric utility, already has received approvals from all required federal regulators as well as the four other states served by PacifiCorp: California, Oregon, Washington and Wyoming.
Utah Public Service Commission Chairman Steve Mecham said he does not know when his board's decision will be final, but the end of the year is the "outside limit."
"I'm confident that it will come out before then," Mecham said Monday. "The order is at the top of the list. It's the thing we're working on most heavily right now."
He would not say which way the Utah PSC is leaning on the issue. But Matthew Wright, a member of ScottishPower's U.S. integration team, said the companies are "not expecting any surprises" from Utah regulators.
"The merger is (agreed to) with the (Utah) Division of Public Utilities and the Committee of Consumer Services, so the main regulatory bodies have stipulated to it," Wright said. "We're expecting some good news from there very soon."
The majority opinion in Idaho said the 46 merger conditions imposed by the commission "will lead to significantly improved service at reasonable rates for PacifiCorp's Idaho customers." Specifically mentioned were promises
that the merged utility will not seek a general rate increase for its 53,700 Idaho customers prior to 2002, and that they will pay a "merger credit" totaling $6.4 million over four years to all retail customers in Idaho.
ScottishPower has promised to provide a similar, 1.7 percent merger credit over four years to PacifiCorp's 622,000 Utah customers.
The majority opinion also said that "denial of the merger in this case simply by virtue of the fact that ScottishPower is incorporated in another country would put this commission on very tenuous legal footing."
But Hansen said "the applicants failed to adequately respond to, or answer, the many concerns the public voiced concerning the merger at . . . numerous public hearings."
He said the companies did not provide "concrete" evidence of how they would save money after the merger, thus allowing them to avoid rate increases. And he questioned the companies' plans to put together a "transition plan" within six months of merger closing.
But Wright said he thinks ScottishPower and PacifiCorp met the standard for approval in Idaho, even without the transition plan.
MacRitchie agreed. "The merger credit really puts the issue about whether this is in the public interest well beyond any reasonable doubt."
Hansen's voice is not alone in opposing the merger in Idaho. Elemental phosphorus maker Solutia Inc., the system's largest Idaho customer, said it will take the next 21 days to assess the order and decide whether to appeal. And state Sen. Robert Geddes said he will poll his constituents to confirm their dissatisfaction with the regulatory action before asking the commissioners to reopen the case and hold more public hearings.
Gov. Dirk Kempthorne, who had been asked by opponents to step into the debate over the past six weeks, declined to criticize the commission's decision, saying in a statement that the extensive public comment resulted in protections that will improve service in Idaho.
"I will join with legislative leaders and the PUC to implement any necessary oversight to ensure that the 46 conditions imposed today . . . are met," Kempthorne said.
MacRitchie said he thinks the order is "very conclusive" in its findings.
Wright agreed. "We would hope to win over those dissenting voices over the next few years as we transform PacifiCorp into a better company."
The Associated Press contributed to this report.