Hydro merger will boost savings, Chiarelli says during Barrie visit

Simcoe.com
April 30, 2015
Laurie Watt

Bigger means better for electricity customers, Energy Minister Bob Chiarelli says.

And Ontario is encouraging local distribution companies large and small to get together to cut operating costs and deliver those savings to customers.

“We have over 70 local distribution companies, of which most serve under 200,000 customers. California has four LDCs with 10 times the population. Over $1 billion in savings would accrue to taxpayers if consolidation activities were to significantly unfold,” he said.

As a result of an asset optimization study, the Ontario government is proposing selling a Hydro One Brampton to a new local distribution company that will include PowerStream and two other companies — one owned by Mississauga, the other by Hamilton and St. Catharines.

The proposed merger would create a company that would serve one million customers and make it Ontario’s second largest LDC.

“This merger represents one of the largest consolidation efficiencies and will have benefits to ratepayers and municipal shareholders,” Chiarelli said.

Barrie Hydro itself was the result of mergers, as the local utility acquired smaller companies that serve Penetanguishene, Thornton and New Tottenham.

And in 2008 when Ontario encouraged mergers in 2008 by offering a tax holiday, Barrie Hydro negotiated its merger with PowerStream, owned by Vaughan and Markham.

Chiarelli said the proposed PowerStream merger with Enersource, Horizon and Hydro One Brampton will save money.

“Taxpayers will benefit from being part of a large company with increased growth potential and lower costs, which result in higher dividends,” he said.

The new company would adopt a new brand, which is yet to be determined.