Across North America, utilities have steadily consolidated over time. This has occurred because of the economics of the industry, public policies, market conditions, and regulatory policy changes. The consolidations can take several forms; utility mergers and acquisitions can be characterized, for example, as large-entity takeovers, mergers of equals, or in the Fortis Model (in which a target firm remains a standalone entity).

An example of this last structure is Hydro One’s acquisition of Avista Corp., which was announced last year. Mergers and acquisitions in the utility sector are subject to regulatory approval, and different jurisdictions apply different standards. The Washington Utilities and Transportation Commission applies a net benefit standard—to meet such a standard, companies typically commit to things like rate credits, retaining the target’s headquarters, and maintaining charitable giving.

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