Guelph would own 4.63% of Alectra if hydro merger approved
File photo of hydro lines.
Ryan Flanagan, CTV Kitchener
Published Friday, December 1, 2017 5:33PM EST
Last Updated Monday, December 4, 2017 11:33AM EST
More information is coming to light about what the proposed merger of Guelph Hydro with Alectra would mean for the city, both financially and otherwise.
Guelph Hydro’s board of directors recommends going ahead with the merger, negotiations for which began last month.
City councillors will vote Dec. 13 on whether to approve the merger.
In advance of that meeting, the city has made more information public about the expected effects of the merger.
If the deal goes through, then Guelph Municipal Holdings Inc. – the city-owned corporation which owns Guelph Hydro – would own 4.63 per cent of Alectra. The corporation would also be given one permanent seat on Alectra’s board of directors.
Alectra has said it will keep an “operations centre” at the current Guelph Hydro office for at least 10 years, retaining 70 of the current 130 Guelph Hydro employees. About 30 of the remaining 60 empoyees would be offered chances to work for Alectra outside the city.
Additionally, the utility would create a green energy research centre in Guelph, with as many as 10 new full-time jobs.
On the financial front, city officials say Guelph Hydro would pay the city a special dividend of $18.5 million before the deal closes, and dividends received from Alectra would likely represent $10 million more than what the city would receive if Guelph Hydro continued to operate on its own, over a 20-year span..
While consumer costs for hydro are expected to increase over time under Alectra, city staff believe the increases would be smaller than those seen if Guelph Hydro stuck with its status quo.
Guelph Mayor Cam Guthrie said Friday in a press release that he supports the merger proposal.
Alectra currently handles electricity distribution for communities including Hamilton, Brampton, Mississauga and Barrie.
NOTE: This article initially stated that the dividend from Alectra would be $10 million per year more than the city would receive from Guelph Hydro. It has since been updated with the correct figure of $10 million over 20 years.