Collapse of PDI sale to Hydro One could open other doors

When a $105-million sale of public property that took nearly three years to put together suddenly and unexpectedly falls apart there’s a natural desire to know exactly what happened.

Did Peterborough Utilities Inc., which is owned by the city, push Hydro One too hard on the final details of the proposed sale of its “wires and poles” distribution system?

Did Hydro One get cold feet and change its offer? If Hydro One’s departure means that any sale of the local utility company’s distribution arm is dead for all time, then PUI should tell city council and Peterborough taxpayers exactly what happened.

But until the “for sale” sign is officially tossed in the scrap heap for good there is reason to hold off on a public autopsy.

For one thing, another potential buyer is ready to talk.

Veridian Corp. is a regional electricity distribution company owned jointly by the municipalities of Pickering, Ajax, Clarington and Belleville.

After PUI had begun negotiations with Hydro One, Veridian indicated it was also interested. The city declined to listen, partly because talks with Hydro One were well advanced. And maybe because Veridian acknowledged it didn’t have $105 million to spend.

But when the city announced last week that the Hydro One deal was off, Veridian president Michael Angemeer made it clear his company is still interested.

Perhaps other potential buyers will also come forward.

And, perhaps, the sale to Hydro One isn’t dead. Negotiations can end and they can be revived. While that seems unlikely in this case it is not impossible.

Until it is certain PUI is going to keep its poles, wires, substations and transformers, along with the employees that service them and the trucks those employees drive, sharing details of a failed sale would be giving other prospective buyers an edge.

And it seems likely that PUI managers will still want to sell. They have been saying for more than two years that the company, its owner (the City of Peterborough) and its customers (Peterborough residents and businesses) would all be better off with a sale, the sooner the better.

Not everyone agrees.

There was a long and loud public outcry against the sale, based mainly on the argument that the job of getting electricity to people’s homes should not be trusted to a private, profit-oriented business.

(Hydro One was once a public utility but the province has sold a majority stake.)

A near majority of city council joined in the opposition. The sale was approved by the narrowest possible margin, 6-5.

Convincing opponents of the wisdom of a sale to publicly-held Veridian for less money than Hydro One offered would be difficult.

However, PUI management’s arguments for a sale still hold: the distribution arm, known as PDI, has been losing value; the province wants smaller distributors to merge and is offering incentives that could soon disappear; aging poles and wires will soon need expensive replacement.

And some form of partnership with Veridian, rather than an outright sale, might be possible.

What is known for certain is that the Hydro One deal is off.

Everything else about the future of PDI is up in the air.

While that’s the case discussion should focus not on what went wrong with the last deal, but whether a new one should be considered.