Alectra Utilities officials enters negotiations to merge with Guelph Hydro

HamiltonNews.com
Oct. 18, 2017
Kevin Werner

Nearly a decade after rejecting a proposed merger with Horizon Utilities, Guelph City Council is preparing to vote on another merger, this time with the giant Alectra Utilities.

Eric Fagen, director of external communications for Alectra Utilities, said negotiations will begin “immediately” on merging Guelph Hydro Electric Systems Inc. and Alectra Utilities. Guelph councillors will make the final decision on whether to agree to the merger at their Dec. 13 meeting.

Fagen said issues such as dividends, and the governance structure can’t be discussed publicly as the talks are underway.

Former Horizon Utilities officials have always said they were looking at opportunities expand the utility company after the proposed merger between Horizon and Guelph Hydro was scuttled in 2008 when Guelph politicians voted 8 to 5 against the deal. St. Catharines and Hamilton councils had approved it.

Alectra Utilities officials reiterated their willingness to merge with other utilities earlier this year after the Ontario Energy Board approved its merger.

In 2005 Horizon and St. Catharines Hydro agreed to merge.

In a news release, Guelph officials stated merging its 55,000 customers, which includes Rockwood, with Alectra’s estimated 1 million customers would “help to avoid a rate increase,” provide a larger dividend to the city, would lead to the establishment of an operations centre in Guelph and the creation of a Green Energy and Technical Centre. Guelph Hydro has about 130 employees.

Hamilton councillors approved the merger of Horizon with Enersource, Powerstream and Hydro One Brampton to former Alectra Utilities in Oct. 2015, becoming the second-largest municipally-owned utility in North America behind the Los Angeles Department of Water and Power. It employs about 1,600 people and stretches from Penetanguishene to St. Catharines with a total rate base of about $2.5 billion.

Alectra officials have promised to Hamilton councillors the merged company will be able to cut hydro rates by six per cent over the next 25 years, resulting in savings of about $40 for the average homeowner, and increase the dividends to Hamilton from $13 million to about $16 million.

Under the now merged Alectra Utilities, there are 13 board members, with two from Hamilton, including Mayor Fred Eisenberger and Paul Benson, Enersource has four representatives on the board, the City of Vaughan has three, Markham has two, while Barrie and St. Catharines have one each board member.