Guelph City Council approves Guelph Hydro merger with Alectra

Ellen Cools
December 18, 2017
By
December 18, 2017 — Guelph City Council has voted in favour of a merger between Guelph Hydro Electric Systems and Alectra Inc.

The City of Guelph will receive a 4.63% ownership interest in Alectra and one permanent seat on Alectra’s Board of Directors. As part owner of a larger municipally-owned utility, the City of Guelph is expected to receive higher annual dividends to invest in local infrastructure, programs and services, says Alectra.

Guelph Hydro’s current location will be home to Alectra’s Southwest Ontario operations hub, and a new Green Energy & Technology Centre (GRE&T Centre).

“The Guelph Hydro-Alectra merger will ensure customers continue to experience excellent service, while fostering more innovation and value in the community. Alectra is one of the most innovative utilities in the industry. As a result of the merger, Alectra will establish a new Green Energy & Technology Centre, which will develop new technologies and attract investments to Guelph,” said Norm Loberg, chair, Alectra Inc.

Next year, on top of its regular dividend, Guelph Hydro would pay the City of Guelph a special dividend of $18.5 million, which can be reinvested in the local community, says Alectra.

Over the next 20 years, the City is expected to receive $10 million more in dividend payments than it would if Guelph Hydro continued operating alone.

Customers in Guelph and Rockwood will avoid an estimated 5% distribution rate increase in 2021, and another estimated 5% increase in 2026, the organizations say.

As part of developing the GEE&T Centre, Alectra will invest $5 million to renovate parts of Guelph Hydro’s current headquarters for demonstration areas, laboratories or showrooms, and another $3 million year to fund pilot projects, demonstrations, salaries, administration, marketing and partnerships.

Guelph Hydro employs about 130 people. About 70 positions will remain in Guelph. Individuals occupying about 30 positions will be offered relocation opportunities starting in 2010, with most occurring in 2020 and 2022. Another 30 positions are expected to be addressed through normal attrition, retirement and other voluntary initiatives when possible. The GEE&T Centre would employ eight to 10 people.  

As a next step, a merger application will be submitted to the Ontario Energy Board for approval. Among other things, the approval process will ensure the merger does not have an adverse effect on ratepayers based on the board’s No Harm Test. The Ontario Energy Board is expected to make its decision in fall 2018. With board approval, the merged company could begin operating on January 1, 2019.

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