Guelph Hydro/Alectra Utilities’ merger is legalized theft by shutting down public participation

By Gerry Barker

April 23, 2018

Breaking News: I have just spoken with an official at the Ontario Energy Board acknowledging receipt of  our intervener letter. He explained that if the board decides not to hold an oral hearing, then only those citizens, who have written to intervene by the end of the month, would still be permitted to question a written application before the OEB. The board has announced that any hearing on this merger application may be held within 6 to 12 months. Please send your intervention letter today (either snail or email) to be part of our last opportunity to be participants in the process.

Breaking News: Congratulations to Ray Ferraro, acclaimed as candidate to represent Guelph for the Ontario Progressive Conservative Party in the June 7 provincial election.

Most of my viewers know by now why I am opposed to the Guelph Hydro merger with Alectra Utilities.

I also believe that there was a well-planned assault on the citizens to dump our Hydro to pay off Guelph Municipal Holdings Inc.’s (GMHI) millions of debt.

Think I’m kidding?

This deceptive legacy started in the fall of 2016 with the appointment of the Strategies and Options Committee (SOC) by city council. It was a propitious time as the accounting firm KPMG had completed the audit of GMHI’s finances. The results were not revealed until early January last year.

And it wasn’t a pretty picture as some $60 million in shareholders GMHI equity was worthless. There were other liabilities that created a huge hole in the city’s books. Who were these shareholders? The city council represented the citizen’s of Guelph, owners of Guelph Hydro.

Starting to get the picture?

The SOC had five members none of who were elected to council. The committee performed its duties in closed-sessions with the odd neutral public report to council.

The SOC mandate was to explore and investigate two basic options: The sale of Guelph Hydro and/or merging with a larger power distribution organization.

Now this is important to remember. It is the policy of the Ontario Liberal Government to “recommend” the merger and amalgamation of small to medium sized Local Community Distribution systems to larger privately owned municipal distribution systems. The reason? It was to encourage “efficiencies.”

The reality is the larger power corporations had a field day gobbling up the small community power distributions system often ten cent on the dollar.

Who were these acquirers? This includes Hydro One the semi-privatized Ontario power distribution corporation with only 47 per cent still owned by Ontarians.

Also Alectra Inc. that now controls power distribution systems in Brampton, Vaughan, Richmond Hill, Aurora, Markham, Hamilton, Barrie, St. Catharines, Collingwood, Simcoe county and Mississauga. Add TransCanada Pipelines to the list as the big boys take over the small and medium sized power distribution systems.

In each take over, the OEB had to approve the merger, sale or amalgamation. The deals were all over the map in terms of benefits to the little guys that varied with each proposal and the OEB approved most of the applications.

In fact, a whole new industry developed benefiting the printing industry, legal firms, financial advisors, engineering companies specializing in power generation and distribution, financial institutions, publishers and graphic designers.

The turning point

In February 2017 the SOC, in closed-session, removed the option of selling Guelph Hydro and not to be considered.

It was a sudden decision. Why would the SOC dump the sale option without explanation? In fact it was only revealed after a leak of the SOC decision made behind closed doors.

Ask yourself, why would an acclaimed community power distribution system, with an exemplary record of service, management and profitability fail to be worth at least the $228 million in book value of its assets? Such assets include wires, poles, substations, equipment, real estate, a fully equipped headquarters building plus some $22 million in cash reserves.

This decision followed a shake-up of the personnel of the SOC with Guelph Hydro CEO Pankaj Sardana being replaced by Hydro chair Jane Armstrong, as co-chair of the SOC with Guelph CAO Derrick Thomson.

What we don’t know is why the decision not to sell Guelph Hydro? That information is sealed in the closed session meeting that decided not to consider the sale of Guelph Hydro.

Alectra is no stranger acquiring municipal power systems and paying for ownership. Brampton Hydro One is an example. So, why not Guelph? You want it? Then paying for it seems logical.

The reason is simple. City council wanted the GMHI debt off its books. The only tangible asset of GMHI is Guelph Hydro.

Now you know the rest of the story

Here is a revealing fact as contained in a two-page spread in the Globe and Mail last Saturday. The lengthy investigative piece describes how the Wynne Liberals kept billions of borrowed money off its balance sheet. It is another example of the Liberal’s energy file being bungled in 2017 due to the Fair Hydro Plan to lower power rates.

You probably recall that the Liberals said they would lower Hydro rates by 25 per cent, and hold increases to the rate of inflation for four years. The Ontario Auditor General, Bonnie Lysyk, pointed out that the province had to borrow billions to pay for most of it.

Ms. Lysyk charged that the government used ‘bogus’ accounting to keep the debt off its books.

The similarities are startling comparing the Ontario Liberals juggling the numbers and the merger agreement between Guelph Hydro and Alectra giving Alectra control and title to Guelph Hydro for no cash consideration.

That agreement is now before the Ontario Energy Board (OEB) for approval.

Our last chance to express opposition to this estimated $300 million give away to Alectra, is to write a letter to intervene at an oral hearing of the application before the OEB, later this year.

After today, there are six working days remaining to have your say. The deadline for public participation notification must be postmarked no later than next Monday, April 30. If we don’t respond, the OEB states the hearing will proceed without public participation.

The opportunity to resist, for many legitimate reasons, will be gone without any recourse

There are a number of reasons why we must object to the written application by Guelph Hydro and Alectra.

Let there be no harm done

First, there is the OEB ‘s ruling that there must be “No Harm Done” in the application. Second the degree of secrecy that was used to shut down public participation by city council and the SOC. Third, the timing of the council meeting held December 13. Fourth, the written application to the OEB delivered two months later with no public announcement not made until the first week in April.

If we citizens can force an open hearing of the application, there will be legal support available to advise our opposition.

Finally, this is our last chance to stop the giveaway. For your convenience here is the OEB address and file number.

Ontario Energy Board

300 Yonge St.

27th floor
P.O. Box 2319
Toronto, ON M4P 1E4

April 23, 2018

Re File: EB-2018 –0014




Filed under Between the Lines

4 responses to “Guelph Hydro/Alectra Utilities’ merger is legalized theft by shutting down public participation

  1. Joe Black

    June and October out with the old crooks in with the new .

  2. Glen

    I started to wade thru the 2 page article in the Globe & Mail about the shenanigans of Wynne & her henchmen/women as they muddied the trail of hydro borrowing to keep it off the books. After reading about 1/2 of the article, my eyeballs were discombobulated & my head hurt. If the finances can’t be explained in terms the average taxpayer can follow, how can those at both the civic and provincial levels pushing the numbers on us be trusted?

  3. Guido

    I have objected to the Tribune about their lack of coverage, and they would not print my letter. Let’s hope this can be stalled until the election. Hopefully there will be a more transparent review

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