Guelph Hydro enters merger negotiations with Alectra
Guelph Hydro and Electra have signed a memorandum of understanding, Mayor Guthrie says
Guelph Hydro has started merger negotiations with Alectra following the announcement of a memorandum of understanding Wednesday afternoon.
The news comes after the utility spent more than a year consulting with stakeholders and customers trying to determine whether it should sell, merge, buy or stand alone.
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In February, city council directed staff to research possible mergers for Guelph Hydro, as well as the option of maintaining full ownership of the public utility.
Guelph Mayor Cam Guthrie said negotiations will continue until the end of the year, and council hopes to ink the final deal on Dec. 13.
"We are not looking at any other partners or any other options in regards to Guelph Hydro," Guthrie told CBC News. "We're very confident that with the analysis that we've done to date that this is probably the way we should go."
Status quo 'not the right path'
He said a merger with Alectra would benefit the city in four ways:
- The utility would continue to have a physical presence in the city.
- Alectra has promised to build a green energy and technology centre in the city, which would create jobs.
- The partnership would increase the city's dividends, which can be invested in other city projects.
- Rates will drop for hydro customers.
The benefit of lower hydro rates has been challenged by industry consultants, who say big utility mergers do not make a great difference to customers.
But Guthrie disagreed and said he is confident a merger with Alectra will make a difference on customer electricity bills.
"What I do know for sure is the status quo ... is probably not the right path for Guelph Hydro to take and puts us at more of a risk of higher rates down the road," he said.
Other municipalities served by Alectra include Mississauga, Hamilton, St. Catharines, Brampton and parts of York Region and Simcoe County.