City Council to discuss more research into possible Guelph Hydro mergers

Key Facts

Guelph City Council meeting
June 13, 2017 at 6:30 p.m.
City Hall, Council Chambers
1 Carden Street, Guelph

Community delegations are invited to register by June 9 at 10 a.m.
519-837-5603
clerks@guelph.ca
register online at guelph.ca/delegations

Media release

Guelph, Ont., June 2, 2017 – On June 13, Guelph City Council will decide whether to continue researching potential mergers between Guelph Hydro and other publicly-owned local electricity distribution companies.

In February, City Council directed the Strategies and Options Committee to continue exploring opportunities to merge Guelph Hydro with other publicly-owned utilities and compare those opportunities to maintaining full ownership of the City’s electricity distribution company.

Since then, the committee hired financial and legal consultants to scan the marketplace and consider which utilities, if any, could be suitable merger partners.

The committee had preliminary discussions with 14 local utility companies to learn how a potential merger could affect Guelph Hydro’s operations, financial position, infrastructure, ownership structure, organizational culture, and local electricity distribution rates.

In addition to using community-supported decision-making criteria to assess potential merger partners,  the committee is considering each company’s share of ownership, shareholder arrangements, governance, and core values.

The Strategies and Options Committee is seeking Council approval to conduct more in-depth research and analysis, compare potential mergers with maintaining full ownership of Guelph Hydro and make a recommendation in the fall.

“We’re still in the exploratory phase of the process. If we find a suitable partner, and if City Council decides to enter into formal negotiations, we’ll share that information in the fall,” said Derrick Thomson, Co-chair of the Strategies and Options Committee, and Chief Administrative Officer at the City of Guelph.

People can learn more about the process, ask questions, and submit comments at energizingtomorrow.ca or email energizingtomorrow@guelph.ca.

About the process

Phase 1 (Complete)

Explore options. Begin community consultation, present findings and recommendations to Guelph City Council in early 2017

Phase 2 (March to June)

Scan the industry for potential merger partners. Consider publicly-owned utility companies likely to provide value to Guelph Hydro customers, the City and the community.

(June to fall)

If City Council votes to explore further: engage specific targets, develop a preliminary business case and financial analysis, outline impact on shareholders and ratepayers, discuss governance, compare to maintaining full ownership and make a recommendation to City Council. Continue community education and engagement activities.

Phase 3 (fall to winter)

If Council decides to pursue a merger: enter into a formal agreement to begin exclusive negotiations; announce the parties involved’ continue community engagement; conduct financial, legal, operational and regulatory due diligence; develop merger and shareholder agreements; finalize rate impact, and make a recommendation to City Council.

Phase 4 (late 2017 to 2018)

If City Council approves the transaction: submit a Mergers, Acquisitions, Amalgamations and Divestitures application to the Ontario Energy Board for approval, develop an implementation plan and establish leadership and governance of the new utility. Upon OEB approval the transaction would close and the merger would be given full legal effect.

Ontario’s changing electricity landscape

Across Ontario, cities are exploring options to ensure they get the best value from their local electricity distribution companies. Since 1996, cities have been consolidating their electric utility companies to reduce duplication and manage costs.

Advances in energy technology are making it harder for small and mid-sized utilities like Guelph Hydro to offer modern, competitive electricity prices and services. As more people generate their own electricity, choose electric vehicles, and use smart-home technologies, the role of Guelph’s local electricity utility must evolve. Residents and businesses in Guelph and Rockwood expect modern, competitive electricity prices and services similar to those available in other, larger cities.

Guelph Hydro is a healthy utility company with a solid reputation. City Council appointed the Strategies and Options Committee to explore ways to ensure customers in Guelph and Rockwood continue receiving excellent electricity service and value from their local electricity distribution company.

Resources

Media contact

Tara Sprigg,  General Manager, Corporate Communications
City of Guelph
519-822-1260 extension 2610
tara.sprigg@guelph.ca