The debate over whether bigger is necessarily better when it comes to Guelph Hydro's future was front and centre in Guelph City Council chambers Tuesday night.
Council, sitting as the sole shareholder of Guelph Municipal Holdings Inc., voted 9-3 to cautiously move forward with exploring whether Guelph Hydro should merge with another utility or retain sole ownership.
The city will now spend $250,000 on the next stage of the process — exploring a preliminary business case and how a governance model might work compared to not merging.
The entire process could cost up to $1.5 million if it proceeds though with a merger. A report is due back in September and council will then decide whether to merge or not in the fall.
Potential partners that have already been identified but which remain confidential.
If a merger is eventually the will of council, it would be finalized mid-2018, just prior to the next municipal election.
"The heavy lifting comes after the preliminary business case if the decision is made to move forward," said Grant Thornton, an advisor retained by the city for the process.
Tuesday night's meeting saw some well-rounded debate and discussion on the merits of a merger as well as retaining full ownership.
Even those voting in favour of moving forward made it clear they want to see some evidence-based material on the pros and cons of merging and not assumptions or theories.
There are currently 65 Local Distribution Companies (LDCs) in the province, down from roughly 300 in 1990.
The province is pushing for more amalgamations and
Economy of scale in dealing with technological changes and challenges on the horizon are seen as the prime benefit of an amalgamation.
"Standing still is not an option," said Coun. Phil Allt, adding that "doing nothing" would be "quite irresponsible" and a "disservice to citizens."
Voting against moving forward with the next phase of a potential merger were councillors Bob Bell, Christine Billings and Van Hellemond. Councillor Mark MacKinnon had to leave the meeting early and didn't vote.
"I don't think the right time to move is now," said
Mayor Cam Guthrie and most other councillors said the city has to at least move forward in looking at its options and gathering more information.
"This is what the citizens of
He said council has done it on other issues in the past, such as District Energy Initiative and city-owned rail line.
"We need to take the next step of exploration," said Coun. Leanne Piper.
"It would be irresponsible to make this decision without taking the next step," said Coun. Karl Wettstein.
Coun. Dan Gibson said it was important that the city maintain its entrepreneurial spirit in any merger.
"I question the assumptions, the basic assumption, that 'is bigger better?' Coun. Mike Salisbury asked following a presentation from the committee looking into the merger possibility.
Guelph Hydro makes money for the city (a dividend of over $1 million to the city last year) and runs very efficiently, council was told.
Retaining ownership means retaining complete control over decisions and direction, several councillors mentioned.
"You're lose your freedom and you're losing your ownership, I believe," said Van Hellemond.
Acting Guelph Hydro CEO Punkaj Sardana said that is one of the questions to look at moving forward.
"Of course we're doing all these things, but can we do it better? We would be remiss if we did not look at the future," Sardana said.
"That's part of the next process - is there an alignment? We're a very well run utility right now . . . how do we get to the next level."
One of the big reasons stated in favour of amalgamation is that it better positions utilities financially for technological changes that are coming in the market. Basically, economy of scale.
Part of the process will be to present council with some case evidence of where amalgamation has or hasn't worked.
"Are there public cases, stories out there, that could be presented? It's important to have some real-life examples," the Mayor told the committee.
Coun. Cathy Downer asked for information on staying as sole owner and, if so, what it would need to do to be ready for the future.
One clear message delivered by several councillors was the need for increased public involvement and the need for language in the materials presented to them to be easily understandable.
Town hall meetings where there is more back-and-forth, rather than presentations, were asked for by Coun. June Hofland.
"I'm hearing it's hard for the public to keep up with it," said Coun. James Gordon. "What the public wants is dialogue."
Added Piper: "I'm still not sure people understand how the energy sector is changing" and why
The city has a web site detailing the current process at www.energizingtomorrow.ca.
