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Whether or not it was the right answer, the road to merger was rough

It was a long and winding road for the Alectra Merger, but this week's Market Squared notes that the 'public' process left a lot to be desired
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20160201 Guelph City Hall Sign KA
Guelph City Hall file photo. Kenneth Armstrong/GuelphToday

I pause now packing my sleeping bag, toothbrush and healthy snacks for tonight’s city council meeting to share an indictment on this entire process in debating whether or not Guelph Hydro should merge with Alectra Utilities.

It sucked.

Due to a confluence of personal and professional events, I’m writing most of this column in advanced of Wednesday night’s meeting, but not the least of which is because with 32 delegates on the speakers list we’re looking at an evening three hours or more in length before council itself even starts to debate the contentious issue.

And the meeting starts at 6:30.

Now I’m no stranger to long, late night council meetings, but I could have sworn that this was the kind of thing council was trying to avoid with a lot of commentary about making difficult and consequential decisions after the witching hour. Merging our little public utility with the second biggest one in North America seems pretty consequential.

Now the work that staff have done in advance has been fine and expansive. The engagement seems to have been pretty well-executed, but it’s been an engagement with hypotheticals. The full details of the proposed merger were not released until Dec. 1, which means it was hard to get a real read on what people think of a merger when they don’t know what they’re getting. Or giving up for that matter.

And the deal, when revealed, seemed to contravene a lot of great expectations from Guelphites.

Reviewing the engagement notes, there were certain clear areas where Royal City residents were concerned, including local ownership, which goes right out the window as soon as we start talking about this merger.

True, you could read those concerns as meaning the desire for public ownership versus private, and while Alectra is publicly-owned by its member municipalities, there’s a world of difference between owning 100 per cent of Guelph Hydro, and owning four-and-a-half per cent of Alectra.

Guelphites were also concerned about jobs, and the loss of jobs in a merger. Not to worry, they said when the merger was announced, back in October, there’ll be jobs staying right here in Guelph.

Of course, what they didn’t say is how many.

When the merger (now) goes into effect, 30 positions will be almost automatically lost although the hope is that will be through retirement and other forms of attrition. Again, hope.

After that, about 30 Guelph Hydro jobs will move to other places in Alectra’s network, and while people in Guelph working those jobs will have the opportunity to re-locate, they could hardly be described any more as “Guelph jobs.”

Exactly how many workers will remain in Guelph after the merger, is uncertain.

But there’s the Green Energy and Technology Centre, they say. Well, that’s about eight to 10 new jobs, which you will note, without being a mathematician, is no where near the number of jobs that are going to be lost in the merger process. I’m also willing to bet that the necessary skills for the new centre will not be transferable for current Guelph Hydro employees.

On top of that, Alectra’s pledge to keep its "Southwest Operations Centre" in Guelph for a minimum of 10 years. After that, who knows?

Lastly, and this may be a matter of philosophy, aside from public-ownership, I’m not sure what the difference is between merging Guelph Hydro into a larger company, or selling it to one. At the end of the day, Guelph Hydro and its 55,000 customers are absorbed into a chorus of over a million others, and whether its water or intensification, Guelph guards itself pretty well in order to protect its small town flavour, even as we hover around 130,000 people population-wise speaking.

So with all this to consider, it’s either surprising or unsurprising depending on your level of cynicism that the City would cram this vote in between the passing of the budget and the Christmas break. What’s the urgency? Does Alectra become a pumpkin at midnight on New Year’s Eve?

Joking aside, I confess to feeling the pressure as someone who covers city hall, so I can’t imagine how Joe and Jane Q. Public have found the time to wrap their own heads around the nearly 250-page agenda on this one item.

On Open Sources Guelph a few weeks ago, Councillor Karl Wettstein said that dealing with the pressure of many timely issues coming due for a vote is what council is paid for. Fair enough, but council is also supposed to act with the advice and consent of their constituents, many of whom are probably still trying to sort out the implications of the new budget, or the implications on their own budget after Christmas.

But let’s assume that this is the best deal for Guelph. Let’s assume that the City worked out the formula and found that the best solution to future issues and concerns with hydro is in merging with Alectra? Can we see that work? Can we see how they worked out the equation and got the final answer?

It’s unlikely. All this negotiating was done behind closed doors over the last couple of months. At Monday’s meeting, council haggled over how much oversight is too much in delegating staff authority to purchase the lands of the Guelph Innovation District from the Province of Ontario. Where was that demand during negotiations with Alectra?

While researching Alectra, I came across a controversy in Collingwood involving Collus PowerStream, one of the founding utilities of Alectra. Because of a previous merger, the Town of Collingwood still owned 50 per cent of PowerStream, and they opted to sell that half to EPCOR, a utility owned by, and based in, the City of Edmonton. Alectra was told that they had 20 days to match the EPCOR offer. They opted to sell their stake back to Collingwood instead.

That process was behind closed doors too, and now a utility company 2,000 miles away is one regulatory board ruling away from owning all of the hydro assets in an Ontario town. A lot of people in Collingwood are mad, and it’s hard to blame since it seems that they’ve been more or less removed from the process. What say can they have in their local electricity needs when people in Mississauga, Hamilton, Brampton, and elsewhere seem to have the control?

In the end, the vote to merge passed by a decisive 10 to 3 margin, and their genuinely seemed to be a lot of struggle among some councillors to push that ‘yes’ button. Meanwhile, a gallery full of people went home disappointed wondering if they were heard, while council assured they had seen how staff solved the equation, and that the math is too sensitive for us to see.

Strange. If Guelph Hydro is publicly-owned, and Alecta is publicly-owned, why is so much being kept under the cover of privilege? “Legal reasons” is basically the answer.

And to get back to the crux of this matter, “What’s the rush?”, it seems that this deal would have turned into a pumpkin after all as just by delaying the vote, the consultants said, Guelph would show that they’re not serious about the deal, and Alectra members that already approved the deal on their end would feel slighted. Talk about being painted into a corner.

So now Guelph Hydro is part of Alectra, and the chips will fall where they may. Again, this may be the right call, but it sure feels like the City dialed the wrong number on this.




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