Guelph city council heard delegations and deliberated during a six-hour council meeting, but managed to approve the merger of Guelph Hydro with utility company Alectra just before 1 a.m. Thursday.
The marathon meeting saw about 30 delegations, most of whom were against joining Alectra, but that did not sway council who voted 10-3 in favour of the merge.
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“You elect us to make these big decisions — bold, hard decisions with the information to be fully informed to do so. We did that,” said Mayor Cam Guthrie in an interview with CJOY News following the decision.
“It’s about all of us that did a really great job in asking the tough, tough questions, both behind the scenes and in front of the scenes to make sure that we were going to be making the best decisions for the citizens and businesses in town.”
Alectra was formed by the merger of three municipally-owned utilities: Enersource, Horizon Utilities and Powerstream. The formation was completed with the acquisition of Brampton Hydro.
The company is governed by a board of directors made up of 13 members representing the municipalities and other shareholders.
With Guelph on-board, the city would receive a 4.63 per cent stake in Alectra and one permanent seat on their board of directors.
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Guelph would also receive a one-time dividend of $18.5 million prior to the deal closing and then ongoing annual dividends equal to 60 per cent of Alectra’s net income.
Those annual dividends are projected to be $10.1 million more over 20 years than they would be if Guelph maintained full ownership over the utility.
Guelph Hydro’s current location will be home to Alectra’s southwest Ontario operations hub and new Green Energy and Technology (GRE&T) Centre.
“I feel very passionately that this is the right decision for the community,” said Alectra president and CEO Brian Bentz. “The business case is strong and it’s been articulated, but to me, in the end, it’s always about vision and values.”
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Some Guelph Hydro employees spoke at the meeting and voiced their concerns about the deal that would see 130 positions reduced down to 70 in Guelph.
Thirty positions would be cut through attrition, voluntary retirement or voluntary separation, and another 30 would be offered jobs in other locations.
“Are we willing to throw away 60 good-paying, long-term, full-time jobs in the community for the power of the possibility,” asked Colleen Pearse, who said she was speaking on behalf of Guelph Hydro union members with IBEW Local 636. “This proposed merger is nothing more than the breaking apart of a well-run, successful, local company for future promises.”
Unit chair for IBEW Local 636, Dan Bertens accused the city of downplaying the future of those 60 expendable positions at Guelph Hydro.
“When job loss is brought up, it is brushed off by the fact that eight to 10 undisclosed positions will be created through the GRE&T Centre. This is hardly comforting,” he said.
Many delegates wanted council to hold off on the merge and to look at other options or do more research on Alectra, but the city’s consultants said this was not an option and would cast doubt on the deal as a whole.
“A delay on Guelph’s side wouldn’t just mean uncertainty and additional expense for Guelph, it would be that for Alectra as well,” said Ron Clark, legal adviser for Guelph Municipal Holdings Inc.
“The deal in front of us is ‘the’ deal, there is no other deal and that’s [the] deal that’s already gone forward in terms of the Alectra internal process. I don’t know Alectra would want to continue that process.”
When it came down to the decision, some councillors still had mixed feelings.
Ward 4 Coun. Christine Billings said in her 13 years on council, the merger was the hardest issue for her, before voting in favour of it.
Minutes before voting, Ward 5 Coun. Leanne Piper said she was still unsure, but voted to approve it as well.
For others, the choice wasn’t very difficult.
Ward 6 Coun. Karl Wettstein said this was the easiest choice he has had to make in the 40 years he’s been in management, while Coun. Bob Bell said he made his decisions months ago and voted to reject the merger.
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As for Mayor Guthrie, he said the meeting was more about confirmation of what he had already felt.
“We were presented with a business case that really spoke to me, that confirmed that the status quo option is not in the best interest of the citizens or businesses in Guelph and a merger was the right thing to do with many, many benefits,” Guthrie said.
Along with Bell, Coun. Phil Allt and Coun. James Gordon voted to reject the merger.
A merger application will be submitted to the Ontario Energy Board for approval and the OEB is expected to make its decision in fall 2018.
With board approval, the merged company could begin operating on Jan. 1, 2019.