The companies said that the agreement submitted to the regulator represents a full settlement agreed by all parties and is in line with the public interest to provide net benefits to the Oregon customers of Avista.

Hydro One president and CEO Mayo Schmidt said: “This is yet another key milestone as we navigate the path toward completing this transaction.

“Once complete, this merger of two leading institutions will generate tremendous value for our organization, as well as our shareholders, employees and customers. We are very pleased by the progress we have been able to achieve in cooperation with all parties involved.”

Ontario-based electricity distributor Hydro One had entered into a merger agreement with the US-based Avista in last July. Their combination is expected to create a major company in regulated electricity and natural gas business in North America, with combined assets of over $25.4bn.

The settlement agreement filed in Oregon is made up of financial and non-financial commitments, among others. Under the settlement agreement, Oregon customers are expected to get immediate financial benefits through rate credits that would come into effect at the completion of the merger.

Hydro One said that the settlement agreement also comes with additional safeguards that ensure the continued financial well-being of Avista.

The Canadian firm said that settlement agreements filed in Oregon, Washington, Idaho and Alaska along with commitments in Montana, if approved, would take the overall financial commitment to nearly $78.6m.

Avista chairman and CEO Scott L. Morris said: “This settlement agreement is a positive next step in the process to finalize our partnership with Hydro One, for the benefit of our customers in Oregon and all of our stakeholders.

“With the broad support of all of the parties in Oregon, we believe the settlement agreement meets the standard for approval in Oregon and affirms the commitments we’ve made to continue to operate as we do today, with local decision-making and increased community support.”

Earlier this year, the Hydro One and Avista merger was approved by the US Federal Energy Regulatory Commission (FERC). It was followed by last month’s antitrust clearance following the expiry of the 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.