Horizon looks for city to support merger deal

Thespec.com
Sept. 29, 2015
By Mark McNeil

Horizon Utilities officials will argue at a city committee meeting Wednesday that bigger is better in the hydro business as they seek endorsement of a deal that would quadruple its assets.

The company created when Hamilton Hydro and St. Catharines Hydro merged in 2005 wants to merge again - this time with utilities in Mississauga, Barrie, Markham and Vaughan. The plan would also include acquiring Hydro One Brampton.

If the deal goes through, it would make the new company - with a name yet to be determined - the largest municipally owned utility in the province, in terms of customer numbers. It would be the second largest using total assets as a yardstick, behind Toronto Hydro.

Horizon president Max Cananzi will argue to members of the general issues committee Wednesday that the merger would lead to efficiencies by allowing a consolidation of billing systems, call centres and other arms of the operation. The cost savings would mitigate future rate increases for residents and businesses as well as leading to greater dividends for the city that will remain a major shareholder, he said.

Among other approvals, the City of Hamilton would have to agree to the deal because the city owns nearly 80 per cent of Horizon's shares.

But at least one councillor has problems with the plan. Sam Merulla says the move would lead to a loss of control for the city. "I believe this is the most significant decision that council will make this term."

Cananzi spoke to The Spectator's editorial board Tuesday, saying the company forecasts the merger would lead to 5.9 per cent lower average annual rates over the next 25 years. On average, he said, customers would save about $40 per year with the merger.

The new company would have its corporate headquarters in Mississauga, but Hamilton would retain the main administration facility on John Street North looking after 960,000 customers compared to the 242,000 it has now. As well, the company would continue to operate its service centre on Nebo Road. The Horizon call centre would remain in St. Catharines.

Cananzi says there would be some job reductions, but officials have not figured out how many.

Job cuts, he says, would be "through retirements, normal attrition and voluntary exits to the greatest extent possible." The losses would be shared equally through the different divisions.

He says there would be no changes to service staffing and service response time will stay the same.