Exploring options for Guelph Hydro

Guelph’s Strategies and Options Committee is exploring opportunities to ensure we get the most value from Guelph’s energy assets—to benefit our city, the community, and Guelph Hydro customers.

Why?

Provincial policies are changing. New technologies are emerging. We want to make sure Guelph Hydro is prepared for the future.

Guelph Hydro service

There will be no changes to your electricity service at this stage

Hydro rates

There will be no changes to rates at this stage

Jobs at Guelph Hydro

There will be no impact on jobs at this stage

Technology is changing

Advances in energy technology are making it harder for small and mid-sized utilities like Guelph Hydro to offer competitive electricity prices and services. Typically, larger utilities are in a better position to improve local services and infrastructure because they spread the cost of these investments over more customers.

Customers across Ontario expect modern, affordable electricity services like:

  • electric vehicle charging stations
  • small, local, renewable generation
  • home automation
  • smart-grid technology
  • advanced energy management systems

Utilities are changing too

With utilities across Ontario consolidating their businesses, now is the time to consider the future of Guelph Hydro. We’re exploring how potential mergers with one or more publicly-owned utilities would compare to maintaining full ownership of Guelph Hydro.

Based on what we’ve seen in other communities, a merger with other public utility companies could:

  • reduce duplication
  • improve efficiency
  • enhance electricity services
  • help manage costs

What we know so far

City Council has already decided not to sell Guelph Hydro, or buy other utility companies.

We had preliminary discussions with 14 publicly-owned electricity utilities in the area. Some seem like a better fit than others at this point, but the number of potential merger partners could change as we learn more about each company.

Potential partners deserve an opportunity to consult with their customers, employees, shareholders and political leaders before making public announcements about potential changes.

If we find a suitable partner(s), and if City Council decides to enter into formal merger negotiations, we will share more specific information in the fall.

Let’s talk about local control

While collecting input during the first phase of the process, we heard local control was important to the community and City Council.

We’re using community-supported decision-making criteria to assess potential merger partners. We’re also considering each company’s share of ownership, shareholder arrangements, governance, and core values.

Control could mean owning the majority of shares in the company. In a merger with multiple partners, control could also mean no party owns more than 50 percent of the company. A shareholders’ agreement would establish the rights and obligations of each partner, and explain how decisions are made.

Local electricity rates and services

If City Council decides to pursue a merger, we expect to be able to announce more specific financial and operational details in late 2017/early 2018.

When you pay your Guelph Hydro bill, 80 percent of the money is used to pay electricity generators, transmitters, and provincial government agencies. These charges are related to the amount of electricity you use, and Guelph Hydro has limited control over them.

Guelph Hydro keeps 20 percent of your payment to cover the cost of distributing electricity here in our community. Guelph Hydro manages these distribution charges carefully, and proposed changes to distribution charges must be approved by the Ontario Energy Board.

Learn more about the charges on your electricity bill

Ontario Energy Board requirements

Any plan to buy, sell or merge electricity utility assets must be approved by the Ontario Energy Board. Any plan to buy sell or merge electricity utility assets must be approved by the Ontario Energy Board. That means the proposal must show it will not have an adverse effect on ratepayers based on the Board’s statutory objectives:

  1. To protect the interests of consumers with respect to prices and the adequacy, reliability, and quality of electricity service.
  2. To promote economic efficiency and cost effectiveness in the generation, transmission, distribution, sale and demand management of electricity and to facilitate the maintenance of a financially viable electricity industry.
  3. To promote electricity conservation and demand management in a manner consistent with the policies of the Government of Ontario, including having regard to the consumer’s economic circumstances.
  4. To facilitate the implementation of a smart grid in Ontario.
  5. To promote the use and generation of electricity from renewable energy sources in a manner consistent with the policies of the Government of Ontario, including the timely expansion or reinforcement of transmission systems and distribution systems to accommodate the connection of renewable energy generation facilities.

Learn more about the Ontario Energy Board No Harm Test in the Handbook to Electricity Distributor and Transmitter Consolidations

Guelph’s decision-making criteria

In addition to meeting to board’s requirements, we’re considering what’s most important for Guelph Hydro customers and the community.

Learn more about our decision-making criteria, and tell us what matters most to you.

The decision-makers

The Strategies and Options Committee will make its recommendation to Guelph City Council who has the authority to make decisions about the future of Guelph Hydro.

Learn more about the organizations involved

Phase 1

complete

Explore options: buy, sell, merge or maintain full ownership

Begin community engagement

Present findings Guelph City Council

Phase 2

March to Fall 2017

Scan industry for potential merger partners: publicly-owned utility companies

Engage merger candidates

Develop preliminary business cases and financial analyses

Outline impact on shareholders ratepayers

Discuss governance models

Compare to maintaining full ownership

Make recommendation to City Council

Phase 3

Fall to winter

If Council decides to pursue a merger:

Enter into memorandum of understanding

Announce the parties involved

Begin exclusive negotiations

Continue community engagement

Conduct financial, legal, operational and regulatory due diligence

Develop merger and shareholder agreements

Finalize rate impact

Make recommendation to City Council

Phase 4

Winter 2017 to 2018

If City Council approves the transaction:

Submit a Merger, Acquisition, Amalgamation and Divestiture Application to the Ontario Energy Board

Develop implementation plan

Establish leadership and governance

The process is complete upon Ontario Energy Board approval

Quick Facts

Everything you need to know about our goals, process, and timelines for exploring options for Guelph Hydro.

Your Voice Matters

We want to hear from you as we explore opportunities for Guelph Hydro.

Current Landscape

See how many Ontario municipalities are making changes to their electricity distribution companies.