NEWS RELEASE
CITY OF BARRIE COUNCIL
*************************
Last night, the City of Barrie Council approved a transaction that, if completed, will see PowerStream merge with two utilities and jointly purchase the shares of another.
The proposed merged company would provide service to over 900,000 customers in the Greater Golden Horseshoe Area including York Region, Simcoe County, Peel Region, Hamilton and St. Catharines.
Based on the number of customers served, the merged entity would be the second largest electric utility in Ontario and fifth largest in Canada.
“This new company will be one of the most exciting and innovative utilities in the country, as well as one of the largest,” said Mayor Jeff Lehman. “I believe it will be extremely well positioned to respond to community needs – everything from handling emergencies, to the growth of the tech sector, to micro-grids and local generation—by virtue of its scale and ownership. If successful this company can be an example of how cities can collaborate to address technological and economic change through innovative municipal utilities.”
Although Barrie’s City Council has now approved the transaction, the proposed merger still requires the approval of the other two PowerStream shareholder municipalities (Markham and Vaughan) and Horizon Utilities (Hamilton and St. Catharines), before it can proceed.
The municipal shareholder for Enersource (Mississauga) approved the transaction last week.
The transaction also includes the three utilities purchasing Hydro One Brampton from the Ontario government.
From an ownership perspective, there would be no single controlling interest in a new, larger utility and all municipal shareholders would have proportional representation on the company’s Board of Directors.
Council supported the proposal because it recognizes significant benefits for residents and the City of Barrie including:
Reduced Upward Pressure on Customer Distribution Rates
• The merger is expected to reduce the upward pressure on distribution rates through reduced costs over 25 years, which is projected to save customers, on average, $40 annually.
Improved Financial Returns to Shareholders
• Steady and growing dividend stream at a higher level than the current arrangement; dividends for the City of Barrie are expected to increase in the first 10 years post- transaction by a total of $28M.
Stronger Platform for Growth in the Future
• Much larger utility with a bigger geographic footprint, more diversification and greater capital resources and opportunities to finance expansion.
Better Position to Provide Input on Government Policy
• Merged utility will be in a key position of leadership and will better able to provide input on government and regulatory energy policy for the benefit of customers and shareholders.
Should the proposal be approved by all shareholders, it will proceed to the Ontario Energy Board for final review and approval.
PowerStream is a product of several mergers and acquisitions that have seen the utility achieve synergies, which have enabled the company to provide its customers with distribution rates that are among the lowest in Ontario and earn greater dividends for its municipal shareholders.
PowerStream was created in 2004 as a result of the merger of Hydro Vaughan, Markham Hydro and Richmond Hill Hydro.
In 2005, the utility purchased the assets of Aurora Hydro Connections from the Town of Aurora and then merged in 2009 with Barrie Hydro.
In 2012, PowerStream formed a strategic partnership with the Town of Collingwood in the ownership and operation of Collus PowerStream.
*************************
