London Hydro’s next step will be on the agenda at London City Hall on Monday.
City staff are recommending London hire a consultant to assist with an asset review of London Hydro. They say a consultant would provide extensive analysis of the financial, legal, social and environmental considerations regarding a potential sale, merger, or amalgamation of the electric utility.
The call for the review comes weeks after London Hydro officials said they were in talks over a possible merger.
Their merger target was St. Thomas Energy, which recently finalized a deal to merge with Entegrus, based in Chatham-Kent.
The staff report, which will be reviewed by the Strategic Priorities and Policy Committee on Monday, said staff have received correspondence from several interested parties about the review process as a result of efforts from a member of council, who was not identified.
The cost associated with the advice is estimated to be upwards of $30,000.
“It might sound like a lot, but realize this is a $300-million asset, and so that bit of intelligence can make a huge difference in how London does moving forward,” said Ward 1 Coun. Michael van Holst.
If a consultant is retained, city staff would report back with information and recommendations for committee and council consideration in October.
The consultant would be tasked with answering the following questions:
- Will companies like London Hydro exist in the future?
- How do you maximize existing assets?
- What does the consumer expect?
- What partnerships could be made outside of the utility sector?
Not everyone on council is convinced. Ward six Coun. Phil Squire tweeted Sunday asking why the city would have to hire a consultant when London Hydro has its own board and experts.
The city of London is the sole shareholder in London Hydro.
Over the past 16 years the utility has performed very well for the city. London’s equity value in the utility has grown from $96 million to more than $148 million over that time span.
Van Holst predicts there will not be a London Hydro in the future, but rather a regional utility that he hopes London would be the centre of.
“I think it’s a really good idea to keep an open mind and see what’s there, because I have colleagues who said no way that would sell that, I said that in my campaign, but that was also based on not as intimate an understanding what the regulated environment is like for us,” said van Holst.
London Hydro is the 7th largest utility in the province and has given a $10-million dividend to city council the last two years.
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