The Guelph Hydro merger with Alectra is aimed at 13-city councillors poised to give the $300 million utility away

By Gerry Barker

November 30, 2017

At a recent closed-session council meeting there was a memorandum of agreement signed between city council either Alectra Utilities or Alectra Inc..

Only one councillor voted against it. We are not prepared to reveal the name but we can say it was not the councillor who voted against the motion. Because of the threat that a councillor revealing the result of any decision made in closed-session, that individual could be charged under the code of conduct placed on members of council.

Yes folks, this is supposed to be a transparent, open and democratic civic government.

The shocker is that council went ahead and voted for a deal of which they knew little. They voted on the recommendation of the Strategies and Options Committee (SOC) composed of five non-elected members. Council was not involved in direct negotiations and will be informed of the final agreement Thursday, November 30.

Shearing the sheep

Who are they? Sheep ready to be sheared?

So, several people have wondered what is the rush to approve this on December 13.

Here are some of the reasons:

Alectra wants this utility because it is well run and strategically located for its expansion plans into southwestern Ontario. And, they’re getting it for an undisclosed share of the Alectra profits. This is the most unbelievable one-sided deal in the city’s history.

Alectra get a $300 million power distribution system for a super minority share of Alectra’s profits.

And the majority of council apparently agrees to this?

The concern is that a new government in Ontario will make a number of changes in the generation and distribution of power. The Progressive Conservatives have already announced they will cut power rates by 12 per cent on top of the Wynne government’s cut of power costs by 25 per cent. If this keeps up, electricity will be free.

Wrap it up

Alectra wants it wrapped up before the June 7, 2018 provincial election because there may be changes in the merging of Local Community Distribution systems (LCD).

Presumably, the merger would rid the city of Guelph Municipal Holdings Inc’s hard liabilities including the two District Energy pumps in the Sleeman Centre and the Hanlon Business Park and their contracts. That’s an $11.4 million wasteful project.

There are a number of questions that have been raised concerning the benefits to Guelph citizens, the decision-making history that was mostly conducted in closed-session. Each councillor received a copy of the questions sent last week, but no response.

The result is a total lack of financial details of the merger.

No information was provided regarding the performance of the members of the Alectra consortium. Don’t you think that should be a concern of city council? How is this working for Barrie, Simcoe County, Markham, Vaughan, Mississauga, Hamilton, Brampton, and St. Catharines?

Don’t you think that knowledge of Alectra operations would be an important part of the decision about to give away a $300 million asset?

One that didn’t work out

Here is one experience of what happened when Alectra tried to take over an LCD

Collus power was a 50/50 ownership split between Collingwood and Alectra. Collingwood decided to sell their 50% and Alectra submitted a bid. They did not win, part of the reason being that dividends were not paid as promised.

And Council wants to merge Guelph Hydro with Alectra based on this report? More to the point, apparently Alectra is known to buy LCD’s or in this case failed to buy the other half of Collus because they failed to pay the promised dividends.

So, why don’t they just buy Guelph Hydro?

The omission of the facts of such a merger, including increased customer service charges that allegedly doubled, once the LCD candidate joins the Alectra group. Also, the impact of increasing distribution costs throughout the system that Alectra can levy its retail customers at will.

Ah! The unintended consequences of promises made but not fulfilled. Once the deal is approved, Guelph’s 55,000 Hydro customers have no recourse to bail out of the deal and no control over the increased costs they will have to pay.

The impact on so many Guelph Hydro services to its customers seems to be ignored by council.

Again if you don’t know the impact costs why are you buying into the deal?

Yet, despite this lack of important merger information to which the stakeholders were entitled, their representatives went ahead and voted to give Guelph Hydro away. If the vote on the memorandum of agreement stands up December 13, they will formally approve the merger without informing their constituents of the real reasons why and explain the benefits to customers. Our only hope is that the people rise up and protest to their councillors.

Just Ask Us Anything

The selling of this crock is a sick joke. “Just Ask us Anything” promotion on the website, energizingtomorrow.ca was deliberately designed not to provide answers because the people answering it didn’t know anything about the actual details of the merger.

All the materials linked to the promotion of the deal were carefully scripted to ensure the real details did not leak out.

It was a lie and city council allowed it to happen. It abused the public trust and if it is approved there will be a price to pay next year.

The wisest choice council should made is to defer the final decision until the owners of Guelph Hydro are informed of the details and are equipped to approve or disapprove the merger.

That’s the way democracy is supposed to work.

Why should the public care about Alectra’s motives and sense of urgency?

Send in the Clowns

This would have gone a lot smoother if the SOC had fulfilled its mandate and presented the full story concerning the merger. Instead it accepted a contrived presentation designed to influence only 13 councillors. They didn’t care about the citizens who own Guelph Hydro.

Judging by the vote result in signing the memorandum of agreement with Alectra either the councillors were duped by those smooth talking big city boys or they were afraid to make the right decision to protect their constituents.

Is this an adult daycare?

Nobody would blame an elected official for being thoughtful, respectful and honest.

It’s a great responsibility.

But when a councillor decides that the public does not need to know its public business, then our democratic systems crumble.

If you don’t know what you’re buying, why buy it?

NOTE: Sign up to send a petition to Council if you are opposed to this merger. Forward a note asking to be added to the list to gerrybarker76@gmail.com  Please include your name, address and ward for verification only.   Thank you.

NOTE: If you missed thr list of questions asked of council, click on the top of this post for connection: Why is Guelph Hydro merging with Alectra Inc. without answers before council approves it December 13?

 

 

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14 Comments

Filed under Between the Lines

14 responses to “The Guelph Hydro merger with Alectra is aimed at 13-city councillors poised to give the $300 million utility away

  1. Joe Black

    Back to candles and a generator.

  2. Rena

    I am totally amazed at the lack of respect that our Mayor and Council have shown to the taxpayers of Guelph. Hopefully this will be remembered at the next municipal elections.

  3. Guido

    Why o Why are insisting to push this deal down our throats ??

  4. More and more people are becoming aware of the flawed merger deal of Guelph Hydro and Alectra. It is, pure and simple, a give way of our $300 million citizen-owned power distribution system. It is a faulty deal that leaves 55,000 Guelph Hydro customers out of participating in the negotiations.

    If we don’t know the details of this deal, why agree with it?

    The only way we can protect our interests at this point is to contact our city councillors and tell them NO.

  5. DAVID BIRTWISTLE

    “GuelphSpeakers”:Don’t miss Maggie Laidlaw’s excellent, incisive comments in the ‘GUELPH MERCURY TRIBUNE” November 30,2017 edition

  6. Laura

    Does the city intend to use money from the sale of Guelph hydro to purchase the Yorklands otherwise known as the innovation center? See their Dec. planning meeting.
    The city intends to submit a RFP to the minister of infrastructure to purchase the turf grass and the old jail lands the intention is to use upset of $3.5 million from the TAx Rate operating contingency reserve #180 and upset limit of $6.5 million the Water Capital Reserve Fund #152
    I thought the water capital reserve fund was to be used to fix existing pipes, and wells ? I don,t understand the finances per se but they are building a 1.5% risk factor into this?? The city has traditional
    been the major industrial landowner buying the land, servicing and then selling it. Why not jettison the risk and allow the private sector to purchase the land and take the risks?

    • Thanks Spend: Viewers can express their objections to the Guelph Hydro merger proposal with Alectra using this list of members of council. They will be making the decision. If you believe giving our $300 million Guelph Hydro to Alectra is a lousy idea, tell your councillor.

    • Colleen

      To provide a bit of correction to that piece – the 38 jobs potentially lost was incorrect. In the report released today 60 jobs will be lost, or about 46% of existing Guelph Hydro staff. It is predicted about 10 jobs will be created for the great centre – net job loss = 50.

  7. Milton Burns

    In the “real” world rather than in the “la-la land” of municipal politics, it is quite common to seek a fairness opinion. This is professional evaluation by an investment bank as to whether the terms of the merger are fair. The results are available to the public or shareholders.
    In Guelph this is done by members of the Strategic Options Committee, “SOC” none of which have any experience on large mergers. Proof is the secret road they have pursued and the lack of information available to the public. Without knowing the terms of the merger no citizen can decide if it is fair.

  8. Guido

    Milton this is exactly what needs to be done. In todays Tribune the City staff recommends a merger. When I hear this it scares me all to hell. The SOC is not qualified to tell us if it’s in our best interest or not. We need a professional company to give us a neutral opinion on this matter.
    I just heard that there will be a closed council meeting Before the reg. meeting. Why????
    Why merge with a company with NO track record of performance, service or profitability ?

  9. Guido

    I forgot to mention above, this is a snake oil sales pitch, lots of BS no substance.

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