London Hydro is looking to restructure in a bid to market technology it’s developed across North America.
Right now, it’s not allowed to sell its innovative usage tracking and customer billing technologies for water, gas, and hydro because it is a regulated entity.
“What that means is that our cost, our revenue, our rate, our services standards — everything is supervised by the Ontario Energy Board regulator,” CEO Vinay Sharma explained.
“A non-regulated affiliate will not be under that umbrella and they’ll be free to sell and have private contracts with anybody in North America.”
Sharma says the technology would allow for someone to deal with just one company when paying water, gas, and hydro.
“You don’t have to be a London Hydro, Union Gas, or City of London water department customers. You can be a private company’s customer and on the back end they will look after all of your utilities.”
If the city approves a restructuring, it would allow London Hydro Inc. (LHI) to create a new corporation, London Hydro Distribution Inc. (LHDI). Through an asset purchase agreement between LHI and LHDI, the regulated portion of the business would transfer to LDHI while LHI would then be able to enter into agreements to market its technologies and applications.
According to Sharma, even conservative market share estimates are very promising.
“In Ontario itself, just Ontario market, we have sized it. A five per cent take-up would result in about $3- to $4-million in revenue every year.”
The revenue would be on top of what London Hydro earns as a regulated entity and could result in the company raising its dividend to the City of London, its sole shareholder.
London’s Strategic Priorities and Policy Committee voted on Monday to request that city staff report back on any potential risks and liability issues the city would face if it approves the restructuring.
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