The Ontario Energy Board approved the sale of the Orillia Power Distribution Corporation to Hydro One on Thursday.
The sale, which is expected to close in the coming months, includes the purchase of all the Orillia Power Distribution Corporation’s (OPDC) shares for $26.35 million, in addition to the assumption of about $14.9 million of debt.
“During such a challenging economic climate due to COVID-19, the Ontario Energy Board’s approval of the sale of OPDC to Hydro One and the significant investments to be made in Orillia as a result of this decision is a beacon of light,” Orillia Mayor Steve Clarke said in a statement.
“The sale of the distribution arm of Orillia Power to Hyrdo One will bring tremendous growth and investment to the city of Orillia.”
The city will retain ownership of the OPDC. After the deal has closed, Hydro One plans to build a provincial warehouse and regional operations centre in Orillia’s Horne Business Park.
“This strong partnership will energize life in the city of Orillia for years to come through our continued investment in exceptional customer service, safe and efficient operations, and community initiatives,” Mark Poweska, Hydro One president and CEO, said in a statement.
Orillia officials say it’s estimated that the Hydro One investments will bring about $200 million to $300 million in near-term economic impact to the city, providing economic development benefits for the community.
“Orillia customers will have a guaranteed one per cent reduction in base distribution rates for the next five years, along with only inflationary increases between years six and 10,” Clarke said in a statement.
“Through successful negotiations, patience and determination, the city was able to meet all of its guiding principles. We have secured a deal that serves the best interests of Orillia, includes significant economic growth, consumer price stability and preserves Orillia Power distribution jobs.”
The OPDC will continue to operate as usual during the transition. OPDC employees will be transferred to Hydro One with similar pension and benefits, along with a one-year location guarantee.