After more than a year of industry research, a comprehensive financial analysis and community engagement on a potential transaction, Guelph City Council voted today in favour of a merger between Guelph Hydro Electric Systems and Alectra Inc.
The City of Guelph will receive a 4.63 per cent ownership interest in Alectra, and one permanent seat on Alectra’s Board of Directors. As part owner of a larger municipally-owned utility, the City of Guelph is expected to receive higher annual dividends to invest in local infrastructure, programs, and services, and Guelph Hydro’s current location will be home to Alectra’s Southwest Ontario operations hub, and a new Green Energy & Technology Centre (GRE&T Centre).
Next year, on top of its regular dividend, Guelph Hydro would pay the City of Guelph a special dividend of $18.5 million, which can be reinvested in the local community. Over the next 20 years, the City is expected to receive $10 million more in dividend payments than it would if Guelph Hydro continued operating alone.
Customers in Guelph and Rockwood will avoid an estimated 5 per cent distribution rate increase in 2021, and another estimated 5 per cent increase in 2026, while Alectra maintains or exceeds current service standards.
As part of developing the Green Energy & Technology Centre, Alectra will invest $5 million to renovate parts of Guelph Hydro’s current headquarters for demonstration areas, laboratories or showrooms, and another $3 million a year to fund pilot projects, demonstrations, salaries, administration, marketing and partnerships.
Guelph Hydro employs about 130 people. About 70 positions will remain in Guelph. Individuals occupying about 30 positions will be offered relocation opportunities starting in 2019, with most occurring in 2020 and 2022. Another 30 positions are expected to be addressed through normal attrition, retirement and other voluntary initiatives whenever possible. Additionally, the Green Energy & Technology Centre would employ eight to 10 people.
The City encouraged community participation throughout the process, helping inform Guelph City Council’s decision. As a next step, a merger application will be submitted to the Ontario Energy Board for approval. Among other things, the approval process will ensure the merger does not have an adverse effect on ratepayers based on the board’s
No Harm Test. The Ontario Energy Board is expected to make its decision in fall, 2018. With Board approval, the merged company could begin operating on January 1, 2019.
To stay up to date on the Ontario Energy Board approval process, community members can visit
guelph.ca/energy or
guelphhydro.com.
After more than a year of industry research, a comprehensive financial analysis and community engagement on a potential transaction, Guelph City Council voted today in favour of a merger between Guelph Hydro Electric Systems and Alectra Inc.