Collingwood rejects PowerStream offer for remaining utility shares

simcoe.com
Jan. 6, 2017
By John Edwards

The Town of Collingwood has rejected an offer from PowerStream to purchase the remaining 50 per cent stake in Collus PowerStream.

PowerStream made an offer on Dec. 9 to purchase the remaining shares, with a Jan. 6 deadline for a response from the town.

After an hour-long in-camera session on Jan. 6 at noon, three hours before the deadline closed, council voted 8-1 to reject the offer. Coun. Kevin Lloyd was the only naysayer and chose not to comment on the vote.

Mayor Sandra Cooper couldn’t offer any details on the proposal.

“I can’t give any details on the offer other than today was a deadline and council needed to meet today and get the information of what PowerStream was offering,” she said.

Cooper said the town has received other offers for the shares.

“There is interest in our electricity,” she said.

In 2012, PowerStream paid $8 million in cash, while the town called a $1.7 million promissory note and recapitalized for about $4.3 million, as part of the deal for a 50 per cent stake in Collingwood Utility Services (Collus).

In the agreement between PowerStream and the municipality, both parties have a right-of-first refusal provision and can institute a shotgun clause.

“Either side can pull it at anytime,” she said. “Both partners have that ability to do that.”

Cooper said she is hopeful this is the first step in a negotiation with PowerStream.

“It’s all about negotiation,” she said. “It’s a very detailed process, behind closed doors. It is the customer I am keeping in mind, ensuring there is not a long-term impact on any decision that council makes.”

John Olthuis, PowerStream spokesperson, told Simcoe.com “we have just received notification of the decision and are currently evaluating their decision at this time.”