Councillors vote in favour of Guelph Hydro merger
City council votes 10-3 to merge city-owned utility with Alectra

GuelphMercury.com
Dec. 14, 2017
Graeme McNaughton 

After more than six hours of delegations, questions and comments, Guelph councillors have voted in favour of merging Guelph Hydro with Alectra.

The vote, which did not come until well after midnight Thursday, finished 10-3, with Councillors Bob Bell, Phil Allt and James Gordon voting against.

With comments closing out the meeting, many councillors spoke about their initial reluctance to a merger, but came around to supporting it once they saw the facts on the table. One big concern was that Guelph Hydro joining the Alectra fold was the first step towards privatization.

However, based on the information provided by staff, most put that concern aside.

“This is the exact opposite of privatization,” Councillor Dan Gibson, who initially voted against exploring a merger earlier this year, said.

“Stronger together is often used as a catch phrase during campaigns, but I agree with it.”

Mayor Cam Guthrie said his support for the merger came from a concern that, should it not be done, Guelph could be in a position down the road where it needs to seek a larger partner for its electricity-generation needs and be left out in the cold.

“And then we’re putting up our, saying what about us, and then it’s too late. Then that center is somewhere else, and we lost our opportunity,” the mayor said, adding that the merger is, in the long run, a move to protect jobs.

Before calling the vote on the merger, Guthrie quoted author Roy T. Bennett: “Do what is right, not what is easy nor what is popular.”

However, the information put forward by staff and consultants was not enough to sway all councillors.

“I very rarely believe that bigger is better,” Bell said, adding he would have preferred to have seen Guelph Hydro merge with a smaller utility or utilities like those in Waterloo Region.

“I would much prefer to merge with someone of an equal size, and that was my hope, and I think smaller companies, smaller entities innovate much better than larger ones do.”

With council now approving the merger, Alectra will work with Guelph Hydro, GMHI and the city’s solicitor on a merger participation agreement (MPA), with any potential issues being resolved without returning to council.

This deal is expected to be completed by February. When that happens, GMHI and Alectra would be legally obligated to merge, subject to the terms of that agreement.

After this, GMHI and Alectra would make Mergers, Acquisitions, Amalgamations and Divestitures (MAADs) application to the Ontario Energy Board (OEB). According to the staff report, that application would be made in March 2018, with approval coming by the fall.

After the OEB gives its thumbs up, the merger would be closed. It is anticipated that the closing would happen on the first day of 2019. Until that is done, Guelph Hydro would operate as it had before, subject to any obligations it has under the MPA with Alectra.

A full house

City hall was packed for the marathon session of council, with the merger being the sole item on the agenda.

The delegation list, sitting at more than 30 names long, featured names ranging from the president of Alectra to the mayor of Barrie to the head of the Greater Toronto Airport Authority recommending the merger.

“Bigger has been better for us. Mergers work,” Mayor Jeff Lehman of Barrie said.

Lehman also pointed to IBM’s $90-million data center in the city, saying the company chose Barrie as one of the major needs for it was a reliable source of power, and the city had that.

Barrie is no stranger to merged utilities. In 2009, Barrie Hydro merged with Powerstream, which provided power to Markham and Vaughan. Powerstream was one of the three companies that joined forces to form Alectra.

Also speaking in favour of the delegation was Rossana Broderick, who was a human resources director with Brampton Hydro, the company bought out by Alectra late last year. She currently works for Alectra as the director of change management and communications – a position created after her previous employer was bought out.

“Many of my friends and coworkers from Brampton have robust careers at Alectra, and our careers are better off,” she said.

“Our customers and community remained priority number one.”

Broderick said the fears and concerns of her coworkers when the purchase was first announced, such as layoffs or a lower standing in the company, did not come to fruition.

“What I have seen over the last year is that my Brampton coworkers and friends are better off than they were in the past,” she said.

However, the vast majority were people listing their grievances against such a move.

Dan Bertens, the unit chair for Guelph Hydro with IBEW Local 636, the union representing the utility’s workers, said that based on the city’s communications during the process, the end goal of merging with Alectra had already been decided.

“The city is trying to sell this merger to the city of Guelph, not giving them an unobstructed look,” Bertens said of the city’s various communications, be it through social media or elsewhere, since the prospective merger with Alectra was announced in October, later adding that the survey questions that showed a public support of the deal were worded with the intent of getting that sort of response.

Bertens also questioned why the city was trying to rush this deal, with less than two weeks between the staff report on the merger being made public and the meeting deciding the fate of a merger.

“The citizens of Guelph had just 12 days to go through a 245-page document,” he said.

“Where is the transparency there?”

Other delegates questioned why a merger with Alectra was explored, as opposed to smaller neighbouring utilities, such as those to the west in Waterloo Region.

One delegate, Rosemary Peddie, called the overall process too secretive, and questioned why only Alectra as a merger partner was announced while other prospective partners were kept out of the pubic eye.

“If this merger is really going to benefit Guelph, why was it so secretive?” she said.

“At the very least, we should have been told who the other utilities under consideration were.”

Speaking with the Mercury Tribune earlier this month, Derrick Thomson, the city’s chief administrative officer, said the names of the other prospective merger partners were being kept confidential due to the information that was shared between the utilities – some of it being proprietary – during the exploratory phase of the merger process.

Isseiah Berhane, who works for Guelph Hydro, said the staff report was dishonest, saying that its claims of improved customer service were unfounded. He pointed to the claim that Alectra would bring with it a 24/7 customer support centre – however, Berhane says Guelph Hydro is already staffed around the clock and will respond to calls at all hours.

Berhane also criticized the report’s assertion that, due to Alectra’s size, there would be increased resources to restore power during major storms. However, with Guelph being close to other centers that would likely be hit by the same weather, Berhane says the city could be forced to take a back seat while more densely populated Alectra areas, such as Mississauga or Hamilton, are given priority.