Enersource, PowerStream, Horizon, Hydro One Brampton set to flip the switch on massive merger

Continent’s second largest municipal electric company

Bramptonguardian.com
Jan. 16, 2017
By Roger Belgrave

The corporate merger and acquisition that will create North America’s second largest municipally owned electric utility company should be finalized by the end of February.

Monday morning, Ontario’s energy minister and the mayors from six Greater Toronto and Hamilton area cities unveiled the name of the giant utility that will be formed when Enersource, PowerStream and Horizon merge to purchase Hydro One Brampton.

The final amalgamation will be called Alectra, which is a Greek name that means brilliant, explained current PowerStream President and CEO Brian Bentz, who was appointed president and CEO (designate) of the new consolidated utility company.

Mississauga is the majority shareholder of Enersource, Markham, Barrie and Vaughan control PowerStream and Hamilton and St. Catharines are the principle shareholders of Horizon.

The merger and purchase of Hydro One Brampton - which was acquired by the provincial government from the City of Brampton in 2001 - has been some two years in the making.

Last month, the Ontario Energy Board approved the amalgamation and subsequent acquisition of Hydro One Brampton.

As of Feb. 1 the merger will become official and the Hydro One Brampton purchase effective as of Feb. 27.

The resulting utility will be second only to Los Angeles Water and Power in size.

The newly formed electricity distributor is expected to serve almost one million customers in the Greater Toronto and Hamilton area.

“We’re on the cusp of building something very different and very great,” said Bentz during a news conference held at Enersource’s Derry Road offices, now set to become the corporate headquarters for Alectra.

Those behind the massive merger and acquisition believe it will be transformational for Ontario’s electricity sector.

“I hope more municipal leaders across Ontario follow your lead,” said Energy Minister Glenn Thibeault.

The resulting efficiencies and economies of scale will not only translate into lower costs for consumers, he insisted, the municipalities involved will also see increased dividends.

Mississauga expects to see more than $600 million in dividend payments over 25 years and residential customers save an average of $40 a year on energy bills as merger efficiencies are achieved over the next 10 years, said Mississauga Mayor Bonnie Crombie.

Bentz also said the merger would provide the resources and investment capital to be at the forefront of innovation in an energy sector undergoing unprecedented change.

The sale of Hydro One Brampton will bring the provincial government more than $600 million in revenue.

“Ontario will direct all net revenue gains into the Trillium Trust, which will he used to fund transit, transportation and other infrastructure priorities all across Ontario,” said Thibeault.

Despite touting the benefits consumers should see as a result of the merger and purchase, Thibeault admitted the government needed to do more to lower electricity rates.

Critics have said Ontario’s cap and trade policy will increase energy bills and the sale of public assets, like Hydro One Brampton, put the province in a worse financial position by relinquishing steady revenue streams.