Opinion: Is the Proposed Merger of Guelph Hydro ad Electra the Real Deal?

November 30, 2017

Guelph council will be voting soon on the proposed merger with Alectra Utilities. So who or what is Alectra, and does the Guelph Council know enough about them? Here are some issues related to Alectra and the proposed merger that have been discovered discovered:

Alectra is the second-largest utility in North America, second only to the Los Angeles utility, and it distributes electricity throughout areas north and west of Toronto. That includes Barrie, Hamilton, St. Catharines, Brampton, Mississauga, Alliston, Beeton, Bradford West Gwillimbury, Penetanguishene, Thornton, Tottenham, Aurora, Markham, Richmond Hill and Vaughan.

This amounts to about one million customers, compared to only 55,000 for Guelph.

Will Guelph have a say in any decision-making by this utility, given that we represent only about 5.5 per cent of the customers of this large company, or will this be akin to what the late Pierre Trudeau referred to as “a mouse in bed with an elephant”?

In fact, this so-called merger looks more like a takeover than a genuine joining of equal partners.

In addition, according to Wikipedia, it is governed by a “13-member board of directors representing the municipalities and other shareholders, which owned its predecessor companies.”

“Municipal representatives make up 12 of those directors, consisting of three directors from Mississauga, three from Vaughan, two from Hamilton, two from Markham, one from Barrie, and one from St. Catharines.”

What are the odds of Guelph getting a representative on its board of directors, given that our population is currently lower than any of the other board member municipalities?

How will Guelph’s voice be heard, if we do not have representation on the board, and even if we do get one seat, that is only one of 13, something that amounts to a total relinquishment of local control.

Who are the “other shareholders, which owned its predecessor companies”? Could they be from the private sector? Is that where the 13th board member originates?

It may be that Alectra is not entirely a public utility; it has been suggested that about 30 per cent may be privately owned.

If that is indeed the case, then this merger may be more of a public-private partnership, something that has been shown, in many cases, to leave the private entity laughing all the way to the bank while the public (taxpayers) are left “holding the bag”, so to speak.

If Alectra does not currently have any private ownership, what guarantees are in place to prevent a sell-off to the private sector in the future?

With regard to hydro rates, the city is not being fully transparent when it says rates will be lowered or held firm, given that distribution rates, the only aspect that Alectra will control, are only 20 per cent of the average hydro bill. Expected skyrocketing hydro rates in the near future will be due to increased costs for nuclear power.

Where is the Community Energy Plan (CEP) in this merger proposal? The CEP received more public input, in the form of workshops, meetings and other forms of public communication, than any other city initiative, and its adoption put Guelph in the forefront of environmental innovation.

Certainly, there is the potential for this merger to advance the CEP but that does not appear to be on the table. Does the city not understand its role in the energy transition (i.e. localization of energy) that other forward-thinking municipalities are embracing?

There is no real guarantee that the proposed “green energy technology centre” will be implemented, and besides, the real problem is not technological, it is a status quo/governance problem, with local governments failing to recognize their role in energy issues.

This whole initiative is being rushed through with a lack of full disclosure and little time for public input. What’s the hurry?

By the time this column appears, the city will have a council report for your perusal, although there will be little, if any, public commentary in that document. Dec. 13 is apparently decision day for this proposal, and this is your only chance to make your voice heard, with registration to the city clerk required by Dec. 8.

Let’s see the details (where the devil is said to lurk) before we commit to what is currently “a pig in a poke”! 

Article by: Maggie Laidlaw

Source: https://www.guelphmercury.com/opinion-story/7969103-is-the-proposed-merger-of-guelph-hydro-and-alectra-the-real-deal-/