Major Simcoe County, York Region electricity distributor Alectra is about to get bigger
The merger could officially take effect in January 2019

Simcoe.com
Jan. 8, 2018
Chris Simon

Alectra appears charged up to grow again.

The utility company that handles electricity distribution for several Simcoe County and York Region communities — and is already the second largest municipally-owned distribution company in North America — is close to acquiring Guelph Hydro Electric Systems. A tentative agreement has been circulating among shareholders for review since last month.

Barrie, which owns 8.78 per cent of Alectra, endorsed the deal Dec. 18.

The company says the acquisition will save customers about .5 to .6 per cent annually, on average, over the next 20 years. Over the next decade, the merger should achieve net aggregate savings of $18 to $26.6 million. About $4.3 million will be saved annually after that. 

“For Alectra, this will help grow dividends through economies of scale and that helps keep our customer power bills lower — that’s also the benefit for Barrie residents since we own nine per cent of Alectra and the dividends are invested in our community,” Barrie Mayor Jeff Lehman said. “Although the impact of this merger is modest, every little bit helps. The exciting part of this merger is that Guelph is a very progressive city with a strong focus on research. Alectra and Guelph together will be putting an emerging technologies lab in Guelph (Alectra was planning on establishing one and Guelph is the ideal place). Guelph has a very strong history of using new technologies to save money and protect the environment.”

That site, called the Green Energy and Technology Centre, would help accelerate and integrate new energy technology into the distribution system. It would be based in Guelph Hydro’s current location.

Barrie’s ownership stake will dip to 8.37 per cent after the merger, while Guelph will receive a 4.63 per cent share of Alectra as part of the deal.

Once the agreement is approved by shareholders — including the municipalities of Barrie, Mississauga, Vaughan, Hamilton, Markham and St. Catharines — it will go to the Ontario Energy Board for approval in the fall. The merger could officially take effect in January 2019.

Lehman said service levels and response times will not be affected by the merger.

Existing Alectra facilities, including Barrie's operations centre, will remain open.

“Alectra and Guelph Hydro are a perfect match and we are looking forward to taking the next steps on this exciting journey with them,” Alectra president and CEO Brian Bentz said in a recent press release. “It will benefit the customers and communities that we serve.”

Alectra was formed by the recent merger of PowerStream, Enersource, Horizon and Hydro One Brampton. It currently serves about one million customers in 15 municipalities spanning 1,800-square-kilometres. In Simcoe County, it covers Alliston, Barrie, Beeton, Bradford, Penetanguishene, Thornton and Tottenham. Aurora, Markham, Richmond Hill and Vaughan use Alectra in York Region.

Guelph Hydro provides service to more than 55,000 customers in Guelph and Rockwood.

“Customers will benefit from downward pressure on rates and our community will benefit from increased dividends that will go toward the municipal services and programs our citizens use every day,” Guelph chief administrative officer Derrick Thomson said.

For more information, visit alectrautilities.com.