Barrie Hydro’s president and CEO says customers can expect to pay less for their power if a proposed merger goes through with an electricity giant centred south of the city.
Barrie City Council, lone shareholder in Barrie Hydro Holdings Inc., announced this week that it has authorized that company to enter into Letter of Intent (LOI) to amalgamate Barrie Hydro Distribution Inc. with PowerStream Inc., jointly owned by the City of Vaughan and the Town of Markham.
Mark Henderson could give Simcoe.com neither a time frame for the start of negotiations – the goal is to have the talks wrapped up and the ink on the page by the end of August – nor a figure for money changing hands, but was able to point up significant benefits for Barrie Hydro subscribers.
“We believe the potential coming together of Barrie Hydro with PowerStream will result in reduced rates for customers, as we realize economies of scale related to the operations of our respective utilities. Those benefits will accrue over a period of time,” Henderson added.
Employees would also be provided with more opportunities as part of a larger organization, he said, the “direction of the industry” would be influenced, and Barrie Hydro would also acquire “expertise in the areas of conservation and Smart Metering”, the latter of which PowerStream has helped to pioneer.
On the table for negotiation are such issues as distribution rates for residential and general service subscribers; dividend payments to shareholders; operating costs and financial stability and service reliability.
The objective of the anticipated merger would be to have one head office and a minimum of two administrative centres, one of which would be located here in Barrie.
Henderson also says this move towards consolidation among utilities represents the wave of the future.
“Our situation is not unique. A variety of options are being considered,” by utilities across the province. What’s more, Henderson says, “there are examples in Ontario utilities under multi-municipality ownership that have provided benefits – among them, dividend streams to shareholders, rate reductions to subscribers, and opportunities to employees.”
Barrie Hydro Distribution Inc. is Ontario’s 12th largest local distribution company (LDC), with more than 68,000 customers in seven service areas. PowerStream is the third largest LDC, providing service to more than 237,000 residential and business customers in Aurora, Markham, Richmond Hill and Vaughan.
A merger with PowerStream would create the province’s second largest LDC.
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