Dive Brief:

• Washington state regulators are seeking more information regarding the proposed sale of Avista, which serves more than 240,000 electric and nearly 153,000 natural gas customers in eastern Washington.

• The request by the Washington Utilities and Transportation Commission (UTC) followed the sudden dismissal of the CEO and the entire board of Hydro One, which proposed the $6.7 billion acquisition of Avista last July.

• The UTC wants Avista to address how the management changes will affect the merger, especially in light of the settlement filed in March regarding financial protections that would help insulate Avista from Hydro One financial risks.

Dive Insight:

The newly elected premier of Ontario, Doug Ford, kept his campaign promise and forced the retirement of Hydro One's CEO and board of directors.

Hydro One, which provides power to the Province of Ontario, went public in 2015, but the Ontario government retained a 47% stake.

CEO Mayo Schmidt was paid $6.2 million a year, earning him the moniker "$6-million man" that Ford used as "a political punch line that he rode right into the Premier's office," according to the Globe & Mail.

What the management changes will mean for Hydro One is not clear, but it did create enough uncertainty to get the attention of regulators in Washington State where Avista is based.

The merger of Hydro One and Avista has been viewed as a way for the Canadian company to gain access to the U.S. market.

Avista is one of the smaller U.S. investor-owned utilities, but it could be a start in trying to catch up with other Canadian companies, such as Emera, Fortis and Brookfield, that already have a presence in the U.S. market. However, the merger attracted controversy from the start. The leader of the Progressive Conservative party, a right-of-center opposition party in Ontario's provincial parliament, criticized Hydro One for using ratepayer money to buy foreign companies.

Both Hydro One and Avista say they are still moving forward with the deal, but regulators in Washington, Idaho and Oregon still have to approve it. And, as indicated by Washington's information request, the prospect of government interference in Hydro One raises potential concerns about the company's financial viability.

The departures resulted in a 4% slide in Hydro One's share price and a 3% drop in Avista's shares.

Separately, the Montana Public Service Commission approved the Avista-Hydro One deal last week, but attached conditions aimed at preventing the early closure of the Colstrip coal-fired plant. Avista owns a 15% stake in units 3 and 4 of Colstrip.