City enters talks to merge Guelph Hydro with Alectra Utilities

The City of Guelph has entered merger talks that would see Guelph Hydro become part of Alectra Utilities.

City council will make a final decision on Dec. 13.

Alectra is a merger of the former utilities of Mississauga, Hamilton, Brampton, St. Catharines and the utility that served part of York Region and Simcoe. Its biggest shareholders are the City of Mississauga and the City of Vaughan.

It serves roughly 1 million residential and business customers. Guelph Hydro would add 55,000 customers from the city and Rockwood.

The city says a merger would help avoid rate increases, provide bigger dividends to the city and increase the ability to research and implement new and green technologies.

If a merger goes through, it would also lead to the establishment of an operations centre in Guelph for the area as well as a Green Energy and Technology Centre that would focus on the development and testing of those new technologies.

“This is an exciting moment for our city,” said Mayor Cam Guthrie at an announcement Wednesday at City Hall announcing the merger negotiations.

“What the analysis clearly shows is that by merging with Alectra, a growing, innovating company, it is the perfect match for Guelph,” the Mayor said.

Brian Bentz, the president and CEO of Alectra, said that utilities have to redesign their business models moving forward, looking for ways to take costs out, be more efficient with service and be more innovative.

“By merging Guelph Hydro and Alectra, we will be in a better position to help our customers take advantage of this new age of energy, emerging technologies, and it will benefit the residents and businesses we serve,” Bentz said.

He said the proposed Green Energy and Technology Centre that would be set up in Guelph would be a “living lab” for innovative and green technology.

It’s not yet known what a merger would mean for the 130 people currently employed by Guelph Hydro. Those jobs will be part of the merger discussions.

Bentz said that there would be efforts made to absorb local workers into the Alectra operations side and that he “absolutely” believes the majority of Guelph Hydro employees will end up working for Alectra.

“In every case that we’ve done this, and we have done this many times, we have done this in a way that engages the employees and we do it almost exclusively through attrition and voluntary packages.

“We expect that we will engage the employees and that there will be a large critical mass of employees right here in the city of Guelph and that the transition will be smooth.”

“We’ve done several transactions in many communities and in every case we have a local, regional presence,” Bentz said.

City of Guelph CAO Derek Thompson, who is leading those discussions for the city, said the city has heard “loud and clear” from the public that it wants local jobs maintained.

“We have a commitment for a Southwest Operations Centre (in Guelph). Part of the negotiations taking place will get to the detail around the security of jobs,” Thompson said.

The city has spent the past year exploring the options for Guelph. A merger was seen as the best option, over selling the utility, maintaining the status quo or acquiring other utilities.

According to the city, the benefits of a merger include:

- better distribution rates than would be possible without a merger

- avoiding of rate increases expected in 2021 and 2026

- “downward pressure” on rates for at least 10 years

- more reliable service

- an increased focus on innovation

The city plans further public engagement prior to the Dec. 13 council vote on the merger.