Hamilton votes to merge Horizon with other hydro providers

CBC.ca
Oct. 31, 2015
By Samatha Craggs

It was far from unanimous, but after a marathon 12-hour meeting, Hamilton city council has voted to merge Horizon Utilities with three other companies.

City councillors voted 10-4 to pursue a Horizon merger with PowerStream Holdings Inc., the new Enersource holding corporation and Hydro One Brampton. Markham council still has to approve the plan, as does the Ontario Energy Board.

Hamilton councillors, who form the Hamilton Utilities Corporation shareholders, debated until about 10 p.m. on Friday after presentations from staff, city advisors and Horizon. Those in favour touted the projected savings a merger would mean for local ratepayers of about $1.30 per month in the first 10 years and about $4 per month afterward. It will also bring higher dividends to the city.

Those against the merger, such as Coun. Sam Merulla of Ward 4, worried about the loss of control. Hamilton is a nearly 80-per cent shareholder of Horizon right now, with St. Catharines making up the balance. It will own 18.15 per cent of the new utility, currently called MergeCo.

"The only guarantee we have is the fact that we lose control," he said this week.

If it goes through, the power share will be as follows:

• Enersource Corporation (with Mississauga owning 27.9 per cent) will hold 31 per cent ownership.
• Vaughan: 20.84 per cent.
• Hamilton: 18.15.
• Markham: 15.72.
• Barrie: 9.43.
• St. Catharines: 4.85.

On a 13-person board, Hamilton would have two representatives, Mississauga three, Vaughan three, Markham two and Barrie and St. Catharines one each.

Horizon says the merger will have the following benefits:

• Right now, it says, Hamilton's dividend payment is expected to rise from $13 million to $16.8 million per year on average over the next 24 years.
• Customers will see, on average, a reduction in distribution charges on their bills of about $40 per year.
• An injection of nearly $11 million in new money - rate savings and dividends - into Hamilton's economy per year on average compared to not merging over the 2016-2039 forecast period.
• Job reductions will be addressed through retirements, attrition and voluntary exits.

Who voted for the merger: Mayor Fred Eisenberger, Aidan Johnson, Jason Farr, Tom Jackson, Terry Whitehead, Doug Conley, Maria Pearson, Brenda Johnson, Robert Pasuta, Judi Partridge

Who voted against it: Matthew Green, Sam Merulla, Chad Collins, Arlene VanderBeek