City to vote on PDI sale op­tions Mon­day

The Peterborough Examiner - - LOCAL - JOELLE KO­VACH EX­AM­INER STAFF WRITER joelle.ko­[email protected]­ter­bor­ough­daily.com

The city’s elec­tri­cal dis­tri­bu­tion sys­tem hasn’t yet been sold to Hy­dro One, but city coun­cil is ex­pected to vote a fi­nal time Mon­day to con­sider two op­tions for use of the ex­pected pro­ceeds: in­vest in a bank port­fo­lio or in­vest in the city-owned re­new­able en­ergy com­pany.

The city is ex­pect­ing to sell Peter­bor­ough Dis­tri­bu­tion Inc. (PDI) late in 2020.

While the sale price for PDI is $105 mil­lion, the city can ex­pect to net some­where be­tween $50 mil­lion and $55 mil­lion af­ter fees and debts are paid.

At a meet­ing Nov. 12, coun­cil­lors gave pre­lim­i­nary ap­proval to staff to fur­ther ex­am­ine the two pro­posed op­tions, ask the pub­lic to weigh in and then of­fer a fi­nal rec­om­men­da­tion in March.

On Mon­day at a city coun­cil meet­ing, a rat­i­fi­ca­tion vote for this plan is on the agenda.

The deal to sell PDI to Hy­dro One in­cludes the wires, poles and trans­form­ers of Peter­bor­ough Util­i­ties, which de­liv­ers elec­tric­ity to 37,000 cus­tomers in Peter­bor­ough, Lake­field and Nor­wood.

City staff an­tic­i­pates the deal will be ap­proved soon by the On­tario En­ergy Board (OEB), which is the province’s elec­tric­ity and nat­u­ral gas reg­u­la­tor. The OEB is hold­ing an oral hear­ing on the deal Dec. 2 to 4 in Toronto.

The pre­vi­ous coun­cil ap­proved the sale in late 2016 af­ter Hy­dro One said it wanted to buy PDI.

The board of the in­vest­ment com­pany that gov­erns PDI, City of Peter­bor­ough Hold­ings Inc. (CoPHI) ad­vised coun­cil at the time that re­place­ment of PDI’s ag­ing in­fra­struc­ture would cost so much it would soon threaten the dis­tri­bu­tion sys­tem’s vi­a­bil­ity — and so the city was bet­ter to sell.

PDI is a branch of Peter­bor­ough Util­i­ties Inc., which was founded 105 years ago.

Coun­cil’s de­ci­sion to sell it wasn’t pop­u­lar with the pub­lic. Many res­i­dents said at pub­lic meet­ings they didn’t want the city to lose con­trol of the as­set be­cause elec­tric­ity rates could in­crease (although the city’s con­sul­tant said rate in­creases won’t hap­pen).

Mean­while, city coun­cil has never de­bated what ex­actly to do with the pro­ceeds of the sale.

One op­tion is to put the $50 mil­lion to $55 mil­lion into a bank port­fo­lio and not touch the cap­i­tal — just use the in­ter­est, which the pre­vi­ous coun­cil ex­pected to be $3 mil­lion an­nu­ally, to pay for con­struc­tion projects.

A re­cent city staff re­port sug­gests us­ing any in­ter­est to fi­nance projects that might stem from coun­cil’s re­cent dec­la­ra­tion of a cli­mate emer­gency.

That idea was dis­cussed briefly at a meet­ing on Wed­nes­day of the city’s new ad­vi­sory board on en­vi­ron­men­tal mat­ters, made up of eight cit­i­zens with ex­per­tise in en­vi­ron­men­tal­ism. Com­mit­tee mem­ber Dana Jor­dan said she liked the idea of PDI sale pro­ceeds po­ten­tially fund­ing projects to curb cli­mate change, and said per­haps it should be rec­om­mended to coun­cil.

The other op­tion is in­vest­ing in CoPHI, the city-owned com­pany that op­er­ates elec­tric­ity and wa­ter dis­tri­bu­tion sys­tems lo­cally.

CoPHI also de­vel­ops and op­er­ates re­new­able hy­dro and so­lar gen­er­a­tion fa­cil­i­ties and pays re­turns to the city ($5.7 mil­lion in div­i­dends is ex­pected to come to the city this year).

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