Tag Archives: Premier Kayjleen Wynne

Who owns Alectra and why is it in such a hurry to scoop up Guelph Hydro??

By Gerry Barker

November 2, 2017

Corporate documents obtained from the application to invest in Alectra Inc. have been revealed through the Federal government’s Sedar site containing the information of the investors. Five of the six provinces listed in the Alectra Sedar submission are outside Ontario.

The information accompanying the application states that Alectra will become the second largest municipally owned electric distribution system in North America.

Heady stuff. Already Alectra claims it has 1 million customers in Ontario with 44 “investors or municipally owned local power distributions utilities.”

Now this is a private corporation that apparently has attracted investors, controlling power distributions In Ontario. In Guelph’s case, that’s our city council representing the 55,000 Guelph Hydro customers.

Here’s a look into some of the Alectra corporate organizations contained in its May 2017 Sedar report. It appears there is provision for distribution of profits to security holders.

The first figure is the number of participants, the second is the amount invested in Alectra Inc. according to its Sedar applications:

Ontario (44), $455,200,000

British Columbia (1), $100,000,000

Alberta (3), 8,800,000

Manitoba (3), $50,000,000

New Brunswick (1), $7,400,0004

Quebec (9), $53,600,000

That totals, $670 million. The Sedar application states that the number of securities is 675,000 each valued at $1,000.

Fat cat Alectra has eyes on mighty mouse Guelph Hydro

What do all these investors know that has been kept from us?

Apparently the merger details are still being negotiated including Guelph’s share of the profits earned by Alectra Inc. So while there is a memorandum of agreement, the devil is in the details

Is the Guthrie administration trying to force us into a deal with a private corporation with shareholders seeking a profit from their investments? Particularly, are corporate profits generated on the backs of Guelph power customers to benefit out of province Alectra Inc. investors?

This total investment for a company that has been in business for less than ten months is breathtaking in terms of organization, combining cultures of the local Power Distribution systems including Markham, Vaughan, Mississauga, Brampton, Barrie, Hamilton, and St. Catharines. You remember the last two-called Horizon that tried to persuade Guelph to join them in 2008. That didn’t work for some of the same reasons Alectra is selling today.

As of today, there are 41 days left before Guelph city council absorbs the benefits of this merger to the owners of Guelph Hydro. These details are still being negotiated and council faces a deadline on Dec. 13.

The question remains: What’s in this proposal that will benefit the citizens and their city and guarantee safe, reliable distribution of power, just like we have enjoyed for the past 100 years?

Alectra does not answer that question. We say what’s in it for Guelph citizens?

Here are some facts about Alectra that you should know:

In my opinion, if I were on council I would be wary of a group that has been in business for less than a year. The first clue is the close relationship between Powerstream, power distributors for Mississauga and Barrie. These Powerstream executives formed Alectra Utilities. The holding company is Alectra Inc. This corporation when incorporating this year already had a number of power distribution utilities in house in B.C., Alberta, Manitoba. Quebec and New Brunswick.

Ontario has the largest number of what Alectra describes as Investors, with 44 and a capitalization of $455,200,000.

The Alectra Inc. board of directors has 13 members of who five are mayors, Mississauga, Vaughan, Markham, Barrie, Hamilton (aka Horizon includes St. Catharines). The other eight are a carefully chosen directors composed of lawyers, accountants, and executives etc.

It is notable that none of the non-Ontario provincial investors has representation on the Alectra Inc. board. Alectra Inc lists them all on the Sedar application.

Another caution is the Alectra statement that claims it will have the second largest municipally owned power Distribution Company in North America.

Alectra has stated that it now has one million customers in Ontario.

I chuckle when I read this. I’m reminded of that great Naked Gun line when the Detective (Leslie Neilson) charged into this shop where a buxom young woman exclaimed: “Is this a bust?” Neilson replied: “Very impressive.”

It seems premature to agree to a merger with Alectra until at least, we see a first year audited financial statement. It seems to me that Alectra wants to close this deal before it reports its first year results. Particularly when the SOC told council last year that the investigation into merging Guelph Hydro would be complete in the spring of 2018.

Does this have anything to do with the October civic election next year?

Alectra has said it will be developing green power technology and if the deal goes through, will set up a tech hub in Guelph to work on this aspect of its promises.

Why does Alectra state that the technology of not only distributing power is rapidly advancing but that in-home/factory power storage systems will allow self-sufficiency of power to users. Collecting power during daylight and storing it overnight for use the next day.

What is the effect on Ontario’s overbuilt power generating capacity when customers generate and store their own power? Will this make the Guelph power distribution system eventually become redundant? Who picks up the tab in this eventuality? This is a situation that is at least 20 years away, if at all.

Bottom line: This is an over-hyped and irrational decision to end Guelph Hydro, as we know it. It’s like telling William Tell to miss splitting the apple on his son’s head. Okay, so political decisions are not just apples and oranges.

Fact, the technology for home power storage remains expensive with limited battery strength. For example, Tesla, the electric luxury car maker, sells a system that can store power collected from a solar array on the roof virtually taking the owner off the grid. The system must be installed by factory-trained Tesla technicians and costs in U.S. dollars some $18,000 for a basic system.

Perhaps, you might want to delay spending $25,00 C$ on stored Tesla power system in your garage until after Tesla solves its production problems with its new, low-priced model three electric car ($35K USD) a copy.

We learned this information when we visited Florida a couple of years ago. They don’t call it the Sunshine state for nothing so solar panels are producing power at an estimated 90 per cent efficiency rate. However, the northern part of the continent does not have the same amount of sunlight as the southern states so the efficiency is much lower, particularly in the winter months when the days are shorter. Especially when the days are cloudy and not sunny.

Guelph Hydro has detailed performance data on the public buildings in the city that have installed solar panels.

As electricity cannot be stored, the Liberal Government of Ontario has currently installed generating capacity of some 42,000 MW. The highest amount of power needed in the past ten years was 27,000 MW. As a result of poor planning, Ontario’s surplus power is sold at less than cost to neighbouring U.S. states or in some cases given away.

Power generation cannot be turned off with the flip of a switch. You cannot stop the Niagara River, or shut down a Nuclear reactor. It should be noted that 66 per cent of all power generating in Ontario is by only four nuclear energy reactors. One of which is usually down for maintenance and refurbishment.

To get rid of coal-fired generating plants, the former McGuinty government replaced the utility with turbine-wind power and solar panels using renewable energy. All this was built by private corporations who received guaranteed 20-year contracts that paid in most cases, 20 cents per KW hour. That’s about 13 cent greater than hydro and nuclear costs of generating power.

Power generated by wind and sun amounts to a paltry nine percent of all power generating sources and is the most expensive.

And you wonder why your hydropower costs are so high.

Included in the wind turbine deals located chiefly on farmland, the owners also were given bonuses in the form of lower power costs. A whole lot of sweetheart deals all around.

The Wynne Liberal government has pledged to reduce power costs by 25 per cent over five years. Part of the reduction is removal of the 13 per cent HST plus the new Carbon Tax.

The problem is that these reductions have the same effect of going deeper in debt to pay for the power rate reductions, The experts claim that by 2023 power rates will have to increase to pay for Wynne’s five year rate holiday. It appears to be a political move to achieve re-election next June. However, with the Premier’s personal approval rating at 20 per cent it will be a tough sell.

Again, we say: NO SALE




Filed under Between the Lines