3 Ontario Utilities Approach Municipalities for Merger Approval
Over the next few weeks, the proposed merger of three Greater Golden Horseshoe Area electric utilities and joint purchase of a fourth will be presented to municipal shareholders for approval.
The proposed merger of Enersource, Horizon Utilities and PowerStream, and acquisition of the shares of Hydro One Brampton, would create a single new publicly owned company that would serve over 900,000 customers in the Greater Golden Horseshoe Area. The business plan that will be presented to municipal councils prioritizes benefits for customers, shareholders and communities.
Benefits include:
• 5.9% lower average annual customer distribution rates than with maintaining separate utilities, due to costs savings
• $355 million (15%) in operating savings over the first 10 years
• 24% increase in company earnings relative to the status quo, including improved returns for all municipal shareholders which will provide increased revenue for use in their communities
• no single controlling interest. Shareholders of the existing utilities will be the shareholders of the new company
• a stronger platform for growth and the ability to implement new programs for customers resulting from a larger geographical footprint, more diversification, and greater capital resources.
The proposal being presented to municipal councils describes a utility with three head offices in existing locations, each with a strong, local presence. The corporate head office would be located in Mississauga; the utility head office, in Hamilton; and the sustainability and innovation head office, in Vaughan. Six service centres would serve the communities of Barrie, Brampton, Hamilton, Mississauga, Markham, and St. Catharines.
Further details will be released after the proposal has gone before the shareholders of all merger participant companies. Given the multiple municipal shareholders and timing of their respective council meetings, voting by municipal councils is expected to conclude by early October.
