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Guelph Hydro merger would include one-time $18.5 million dividend to city

Total of 60 Guelph Hydro jobs would be lost through attrition and relocation in deal to be voted on by council Dec. 13
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The city will receive a one-time dividend of $18.5 million should it choose to merge Guelph Hydro with Alectra.

Guelph City Council will hold a final vote on the merger on Dec. 13.

The city released a report on details of a proposed merger on Friday.

“The final report and recommendations for City Council give me confidence that this is the right direction for our city to take. Guelph residents and businesses will save money, and the City will receive higher dividends we can use to support local infrastructure, programs and services,” said city CAO Derrick Thomson in a news release.

“The report answers a lot of the questions we’ve been hearing from our community about electricity distribution rates, service reliability, the city’s dividend, our share in the merged company, and jobs,” said Derrick Thomson, chief administrative officer for the City of Guelph, in a city news release.

If approved, the deal is expected to close Jan. 1, 2019.

The full 231-page report can be found here.

Report highlights:

- Guelph gets a one-time payout of $18.5 million on top of its annual dividend.

- Guelph would own 4.63 per cent of Alectra.

- Guelph's Envida Community Energy assets would be included in the merger.

- the city’s annual dividends would increase significantly as opposed to if it continues full ownership of Guelph Hydro.

- Guelph gets one seat on Alectra’s board of directors.

- Electricity distribution rates will rise, but not as much as they will if the city keeps full ownership of Guelph Hydro.

- Guelph and Rockwood customers would avoid an estimated five per cent distribution rate increase in 2021, and another estimated five per cent increase in 2026.

- Guelph would be the site of an Alectra Green Energy & Technology Centre to research and integrate new energy technology. It would employ eight to 10 people.

- Guelph Hydro’s current location would become a Southwest Operations Centre for at least 10 years.

- Alectra would employ 60 less people in Guelph than Guelph Hydro's current 130 employees. Thirty positions are expected to disappear through attrition, voluntary retirement or voluntary separation, “whenever possible.” Another 30 woul dbe offered jobs in other locations.

- Another 30 would be offered jobs in other locations within the company, most in 2020 and 2022.

- the Ontario Energy Board would have to be satisfied that the merger would not cause harm to consumers with respect to price and adequacy, reliability and quality of electricity service before it approved the merger.

 




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