Good afternoon Guelph!
I want to thank everyone who have called, emailed, asked questions or posted comments on a social media, stopped me on the street, came to open houses, picked up a flyer at the Farmers’ Market or the mall, or took a survey about the proposed Guelph Hydro-Alectra merger. There’s been a lot of great interactions and a willingness to further understand the answers.
After more than a year of collecting your input and conducting industry research and analysis, Guelph City Council voted to begin merger negotiations last month.
Like any business negotiation, we’re discussing sensitive operational and financial information on both sides of the table. While the specific details are being finalized, we do know, for a fact, that Guelph will benefit from rates that are better than they’d be if Guelph Hydro remained on its own, continued, reliable service from local crews, more resources to invest in local infrastructure and innovation, and a new Green Energy & Technology Centre.
If you’re really interested in the facts about a Guelph Hydro-Alectra merger – keep reading the seven outlined below! As always you can learn more, ask questions and post comments on the official website for the project energizingtomorrow.ca.
#1. Comparing historical rate increases does not tell the story:
Electric utilities are not all the same. Some have aging assets while others have brand new infrastructure. Some cities are growing faster than others. Some areas have had big storms that caused a lot of damage, and each utility may have a different history of labour relations.
Electricity distribution rates are based on these and other factors. Rates are not necessarily a reflection of a utility being run well (or not). Any analysis and comparison requires more than a simple comparison of recent rate increases.
An enormous amount of analysis has gone into confirming that a Guelph Hydro-Alectra merger is beneficial to both utilities and—most importantly to me—to Guelph Hydro customers, this community, and the City of Guelph as shareholder of Guelph Hydro.
#2. Savings for everyone in Guelph:
Our electricity bills won’t go down after a merger, but they’ll go up less than they would if Guelph Hydro continued operating alone.
Even before we experience savings from consolidating our business operations, Guelph and Rockwood customers will avoid an estimated 5% distribution rate increase in 2021, and another estimate 5% increase in 2026.
We know, in the short term, the merger partners would make significant investments to consolidate business systems and operations.
After the merger, savings can be used to increase dividends to the City. After that, as savings continue year after year, they can be used to put more downward pressure on distribution rates.
The Ontario Energy Board (OEB) gives merged utilities 10 years to recover transition costs, and start saving money. The OEB also sets a threshold and, if a merger reduces costs even more than expected, the OEB ensures ratepayers share in any savings above that threshold.
#3. Rates for businesses in Guelph:
We’re listening to our community, and we’ve heard questions about a merger’s effect on small businesses.
Guelph Hydro’s business rates are already about 39 % lower than Alectra’s average rates. Our rates wouldn’t automatically go up after a merger. The Ontario Energy Board is unlikely to approve sudden or significant rate increases that could harm businesses. We expect the OEB would permit Guelph to operate as a separate rate zone, and commercial distribution rates in Guelph would continue to be lower than the average commercial distribution rates for Alectra, until rates can be harmonized without adversely affecting commercial customers in Guelph and Rockwood.
Remember that a merger would have to be approved by the Ontario Energy Board, according to the principle that there will be no harm to ratepayers.
As we negotiate the specific terms of a merger, we’ll keep sharing information about distribution rates for customers in Guelph and Rockwood.
#4. Customer service and response times:
We heard from the community that customer service is important. Service reliability and outage response times will be as good or better than they are now.
After a merger, local crews will continue to respond to local calls, while gaining access to a much larger team of skilled workers during storms or emergencies.
Alectra’s focus on technology and innovation would help modernize customer service systems, and offer more self-service options, mobile apps and other technologies that provide customers with greater control over their energy use.
#5. Who owns Alectra:
Alectra is a publicly-owned utility formed earlier this year with the merger of Enersource, Horizon Utilities, PowerStream – and the subsequent joint purchase of Hydro One Brampton.
The cities of Barrie, Hamilton, Markham, Mississauga, St. Catharines, and Vaughan, through their respective holding companies, and Ontario Municipal Employee Retirement System (OMERS) are joint owners of Alectra.
- City of Mississauga (27.90%)
- City of Vaughan (20.84%)
- City of Hamilton (18.15%)
- City of Markham (15.72%)
- City of Barrie (9.43%)
- City of St. Catharines (4.85%)
- OMERS Infrastructure (3.10%)
Following a merger, Guelph would join this list of municipal shareholders. We would continue to have an important say over hydro decisions affecting our community and we will continue to receive annual dividends we can re-invest towards community initiatives.
People are an enormous consideration in a merger. We care very much about the people who work at our local hydro distribution utility.
Guelph Hydro employs about 130 people. The jobs of about 70 per cent of those people would be unaffected by the merger. That’s because operations-type positions would remain unchanged, and they would stay here in Guelph.
About 30 per cent of the positions at Guelph Hydro could be subject to change. But of those, we expect several to be addressed through attrition, early retirement, or voluntary separation. Of the remainder, some positions could be affected. And that’s not a small thing. But I want people to know that Guelph Hydro employees will be treated equitably and with respect.
And let’s not forget that Guelph stands to benefit by becoming a southwestern Ontario operations hub, and creating a new Green Energy & Technology Centre.
#7. Have your say:
If you are genuinely interested in knowing the facts about the proposed merger, please visit energizingtomorrow.ca to learn more, ask your questions, post your comments or take the survey.
There’s more to come! Guelph Hydro and Alectra are discussing the financial, legal and operational details, and you can read the council report on Thursday, November 30.
We want to hear from you! Guelph City Council will hear delegations and make our final decision about the proposed merger during an open meeting as the shareholder of Guelph Hydro on December 13, 2017.
To speak to Guelph City Council during the meeting, please register by Friday, December 8, 2017.
Learn more. Ask us anything.
Take care, thanks for reading and sharing these 7 facts!