The merger between Guelph Hydro and Alectra Utilities has cleared a crucial hurdle after the deal was approved by the Ontario Energy Board.
The decision was announced late Thursday night.
In its decision, the OEB said the two sides have satisfied a “no harm test” with respect to price, cost-effectiveness and economic efficiency.
“The evidence shows that the underlying cost structures to serve acquired customers following the proposed merger will be no higher than they otherwise would have been,” the OEB said in its decision.
The board said it was confident that existing levels of service will also be maintained.
The approval has now cleared a path for the merged company to begin operation on Jan. 1, 2019. The transaction remains subject to the two sides meeting certain closing conditions, but those were not specified.
The City of Guelph will receive a 4.63 per cent stake in Alectra and one permanent seat on the company’s board of directors.
Guelph will also receive a one-time dividend of $18.5 million prior to the deal closing and then 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 a new Green Energy and Technology Centre.
One of the main concerns surrounds jobs as the deal would see 130 positions reduced 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.
The merger was first approved by council in a 10-3 vote in December 2017 with Coun. Phil Allt, Coun. James Gordon and Coun. Bob Bell rejecting the deal.
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