Complicated, yes; but just how costly?

Mississauga.com
Sept. 17, 2015

Ontarians know all about the potential partial sale of Hydro One. The government’s proposal has caused a firestorm of controversy. Some say the short-term fiscal gain will never outweigh the long-term pain (the loss of a public utility).

We know less about a potential merger of four of our local electricity distribution companies: Enersource, Horizon Utilities, Hydro One Brampton and PowerStream.

Enersource is the old Mississauga Hydro that is partially owned (10 per cent) by Borealis, part of the Ontario Municipal Employees Retirement System.

The purpose of this merger is to use its collective resources - serving almost one million customers in Peel Region, York Region, Barrie/Simcoe County, Hamilton and St. Catharines - to deliver the best in power needs.

The parties involved believe it will benefit customers and the shareholders.

Isn’t that what they always say?

It’s hard for customers - residential and business - groaning from sky-high power rates to envision a scenario where we’ll see instant and long-term benefits from a merger. Concerned citizens can air their beefs when delegations come before local councils. The councils affected will probably make a decision this month.  The proposal will also require Ontario Energy Board approval, and that too, means public input.

Hydro generation and distribution is a complicated matter. This merger is a separate initiative from the partial sale of Hydro One Networks, the utility owned by the province.

And Hydro One Brampton is a separate and distinct company from Hydro One Networks. It is the former Brampton municipal utility, and like Enersource, has been run with a municipal focus.
So why is a merger so important now?

Queen’s Park has created a new set of policies to make consolation of local utilities more attractive. But is creating a larger utility really more efficient? Or is this simply another way of nailing it to the consumer?

The potential partners in the merger it will address long-term market conditions in order to deliver reliable electricity at the lowest-possible price. They hope to do that and provide sustainable dividends to shareholders.

Finding efficiencies gives the proposal added uumph, they say, and some councillors across the province agree, wholeheartedly.

This one-two punch (helping reduce the upward pressure on future distribution rate increases and upping shareholders’ incomes) is what this proposed merger is all about.

Like we said, it’s a complicated issue, and in the end, let’s hope that we don’t be use simple business buzzwords like “finding efficiencies” to hide the fact that this merger will simply cost consumers more money when they get their bill online or in the mail?