Utility merger and Brampton hydro purchase forecast to bring $600M to Mississauga city coffers
Bramptonguardian.com
April 12, 2016
By Roger Belgrave
The City of Mississauga expects to receive hundreds of millions of dollars from its partnership in an ongoing utility company merger and stake in the purchase of Hydro One Brampton.
Last month, Mississauga Mayor Bonnie Crombie joined mayors from Markham, Vaughan, Barrie, Hamilton and St. Catharines in a ceremonial agreement signing to mark the merger of utility companies Enersource, PowerStream and Horizon.
Mississauga is the majority shareholder of Enersource. Markham is the principle shareholder of PowerStream and Hamilton and St. Catharines own Horizon.
MergeCo is the temporary name of this new utility amalgamation that will be headquartered in Mississauga and has agreed to purchase Hydro One Brampton from the Ontario government for $607 million.
According to Crombie’s office, Mississauga is projected to receive $600 million in dividends over the next 25 years from MergeCo.
The funds will become part of the city’s operating revenues and help reduce the annual burden on municipal property taxpayers, Crombie’s office explained.
In March, the Ontario government executed a Share Purchase Agreement with PowerStream, Enersource, and Horizon.
The merger and purchase are still subject to certain closing conditions, including Competition Bureau and Ontario Energy Board (OEB) approval, expected later in 2016.
The merger will create the second largest electricity distributor in Ontario. It will serve customers in Peel, York, Hamilton, St. Catharines and Simcoe County.
Mississauga council recently approved a $70 million bank loan guarantee to finance the city’s part in the merger.
Hydro One acquired Hydro One Brampton from the City of Brampton in 2001.
MergeCo members have insisted the merger would ultimately push hydro rates down. But there is continued political and public criticism about the Ontario government’s selloff of public assets like Hydro One and Hydro One Brampton.
