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City votes in favour of merging Guelph Hydro with Alectra

14-month process ends with 10-3 vote in favour of merging the city-owned utility

Guelph City Council has voted in favour of merging city-owned Guelph Hydro with Alectra.

Council voted 10-3 in favour of the merger at the end of a six-and-a-half hour meeting that stretched into Thursday morning.

Voting against the merger were councillors James Gordon, Phil Allt and Bob Bell.

The merger still has to be finalized and approved by the Ontario Energy Board, a process that will take about a year.

As part of the deal the city gets a 4.63 per cent ownership stake in Alectra, a utility owned by six municipalities that represents 15 communities, including Mississauga, St. Catharines, Hamilton and Barrie.

Guelph will also get one seat on Alectra’s 13-member board of directors and a one-time $18.5 million dividend (money that is already in the Guelph Hydro bank account on reserve for capital projects).

Mayor Cam Guthrie said if Guelph failed to take advantage of this opportunity it could find itself in a situation down the road where it was saying “what about us!” and be passed over for some of the benefits it will now reap, including an operations centre and a technology innovation centre.

“Our own hydro board voted unanimously to do this,” Guthrie pointed out.

City consultant Ron Clark said that if the city chose to pause the process there was a good chance it would end the process with Alectra.

“This is ‘The Deal,’” MacDonald said prior to the vote.

The city undertook a 14-month process to look at the various options, which included merging with other municipalities, selling the utility or maintaining the status quo.

Proponents say it will lead to more control over hydro rates, increased access to new technology and better annual dividends.

Opponents saw it as losing control of a well-run and profitable asset and lost jobs for some Guelph Hydro workers.

Some councillors would rather have seen Guelph merge with smaller utilities and maintain a greater share of ownership.

Even councilors that voted in favour of the merger were torn.

“My head says to merge but my heart has always said not to merge,” Billings said.

Delegates included the Mayor of Barrie, Jeff Lehman, a city that previously went through a merger and is now part of Alectra, and Alectra President and CEO Brian Bentz

“How big do you want to get?” Coun. James Gordon asked Bentz.

“I don’t have a number,” Bentz replied. “I think we have a good scale at one million customers. But if there were other utilities, particularly in the GTA, who were interested in becoming part of Alectra I think we would owe it to our shareholders to look at it.”

City of Guelph General Manager of Corporate Communications and Customer Service Tara Sprigg said during a presentation that kicked off the meeting that community response to a potential merger was moderate.

“One can infer that there’s not a strong sentiment for or against a merger,” Sprigg said.

That wasn’t the case for the 29 delegates who spoke at the meeting:

Richard Puccini: “Put the sale option back on the table,” Puccini said, adding that a merger would see Guelph surrender 95.37 per cent of control of its asset.

Ron East (Council of Canadians): “If the Alectra merger goes through, it will be the largest asset sell-off in the history of Guelph,” said East. “Guelph will have little or no say in its own future.”

Steve Dyck (President of Guelph Solar): “Guelph has been too eager to move this deal forward.”

Donna Jennison: “Much of the information presented about a proposed merger has been marketing,” said Jennison. “I would like Guelph to consider other options and bring them to the people of Guelph.”

Dan Bertens (Guelph Hydro employee and union rep): “Is Alectra a bad company? No. Is it the right partner for Gueph? Absolutely not.”

Mark Goldberg: “The business model is broken and the asset value is at risk because of it,” said Goldberg, a member of the city’s Strategies and Options Committee. “The only option, really, is to merge …. Alectra is not only the best, it is the perfect partner for a merger.”

Mike Nagy: Said there is a “manufactured sense of urgency” surrounding the proposed merger. “Bigger is not always better. It’s just an old marketing slogan.”

Gerry Barker: “Defer it. Let’s step back and take an opportunity to get the truth. We don’t have the truth.”

Brian Manninger: “We are being bulldozed into a merger that may not be our best option.”

Todd Ernst (Greater Toronto Airports Authority): “They (Alectra) have performed brilliantly.”

Rosanna Broderick (former HR director at Brampton Hydro, current Alectra employee): “Throughout the process we were treated with respect and inclusion.”

Janice Folk-Dawson (Guelph and District Labour Council): “We are being sold a deal that we don’t have all the answers for.”

Krista Perry (Guelph Hydro employee): “I ask you, what’s the rush? …. We can operate independently until more suitable partners are ready.”

John Camelleri (Power Workers’ Union): “As a company, Alectra is progressive. Alectra looks out for its members.”

Barry Ward (City of Barrie councillor): “It’s worked out fine for Barrie.”

Jeff Lehman (Mayor of Barrie): “The choice that we made to give up majority control … brings nothing but benefits for our residents. Bigger is better for us. That’s been our experience.”

Brian Bentz (President and CEO of Alectra): “To me, it’s about strategic positioning. It’s about having the right partners. It’s about believing the right thing in times of change. Together we’re stronger.”