GuelphToday received the following letter to the editor from Guelph Hydro Electric Systems Inc. Board Chair, Jane Armstrong, regarding the recent proposed merger with Alectra.
I am proud to serve as the chair of the board of Guelph Hydro Electric Systems Inc. It’s a great company with a reputation for excellent customer service, reliability and safety.
That reputation is the direct result of our employees. Their skill and dedication have made Guelph Hydro the high-performing and well-respected utility our customers have counted on for more than 100 years.
We’re top-rated among our peers, we’ve made good business decisions, and we’ve managed to stay strong through ice storms, global recessions and decades of changing technologies.
Now, our job is to look ahead and find the best way to keep delivering the modern, reliable electricity programs and services our customers will expect in the years ahead.
The traditional utility business model doesn’t address the changes and challenges we’re facing in the industry. With energy costs increasing, people are finding ways to use less electricity or generating their own.
As a medium – sized utility we are challenged to find the capital and resources to offer new, competitive electricity programs and services and weather the significant changes to our business model that the new reality of our industry will bring. In the next five to ten years we expect major change and we need to take the steps now to position our utility to succeed.
That’s why we’re talking about a merger with Alectra. It’s not an easy conversation, but it is an important one to have.
A merger would mean Guelph owns 4.63 per cent of a large, industry-leading utility, and has a permanent seat on the Alectra Board of Directors. We would participate in top-level decision making, and we’d have more resources to invest in local infrastructure, programs and services.
The city would receive $18.5 million on closing. Over the next 20 years, total dividends payable to the city are projected to be $10 million more than they would be if Guelph Hydro continued operating alone.
Electricity distribution rates wouldn’t go down after a merger, but they wouldn’t go up as much as they would if Guelph Hydro continued operating alone. Guelph and Rockwood customers would avoid a planned and necessary 5 per cent rate increase in 2021 and another 5 per cent increase in 2026.
The new Green Energy and Technology Centre will complement Guelph’s Community Energy Initiative and strengthen Guelph’s position as an energy leader.
To achieve these benefits, we would need to make some changes.
Seventy full-time positions would remain at the Southwest Operations Centre located at our current Guelph Hydro facility, along with eight to 10 new jobs created through the Green Energy and Technology Centre. Thirty existing positions would be reduced, and we believe these can be addressed through normal attrition, retirements and voluntary separation wherever possible.
The gradual reduction of these 30 positions will occur over the next few years through the elimination of role duplication and achieving economies of scale. Change is hard. And we have worked very hard to ensure all of our employees will be treated fairly and with respect. Another 30 positions will be relocated to other opportunities within Alectra.
As Guelph Hydro’s board chair, I have to consider the long-term success of the company, and its ability to deliver value to customers and the community.
This isn’t just about keeping rates as low as possible, or increasing dividends to the shareholder. It’s about sustaining the ability to provide excellent and innovative service to our customers and our community in the long term.
I support a merger with Alectra because I believe this is the best way to make sure the customers we have served for more than 100 years can continue to count on their local utility to deliver the exemplary service and value they’ve become accustomed to and expect.
Chair, Board of Directors
Guelph Hydro Electric Systems Inc.
Jane Armstrong is a life-long resident of Guelph, a partner with the law firm of Vorvis Anderson Gray Armstrong LLP, and chair of the Board of Directors for Guelph Hydro Electric Systems Inc. Ms. Armstrong has served on the boards of several community organizations, including the Downtown Board of Management and the Canadian Red Cross Society. She is a member of the Rotary Club of Guelph and served as its president in 2004-2005. Ms. Armstrong is a former member of the Canadian Human Rights Tribunal Panel and a former chair of the Guelph Police Services Board.