Markham vote clears way for energy merger
Deal could save residents $24 to $30 per year: report
Markham council has voted to endorse a multimillion-dollar deal that will see the creation of the province’s second largest electrical distribution company, which will serve almost a million customers in six municipalities.
At a marathon council meeting that started Thursday evening and ended early Friday, a deeply divided Markham council voted 7-6 to accept the plan to merge its local distribution company, PowerStream, with two others and invest up to $47.3 million to acquire another, then form MergeCo.
“I am going to support the merger,” said regional Councillor Jim Jones, who broke the long-standing tie vote, while admitting he met with the provincial Energy Minister Bob Chiarelli two weeks ago to discuss the merger. “I am not a destroyer of deals; I’d like to think of myself as a builder.”
In April, the province announced a plan to have PowerStream, Enersource and Horizon Utilities merge and acquire Hydro One Brampton for $607 million. The merger required support from all parties. Barrie, Vaughan, Mississauga, Hamilton and St. Catharines had endorsed the deal earlier in the fall. Markham was the last vote remaining.
“I am pleased that each of the municipalities involved was able to recognize these benefits and the value that this new company will bring to electricity consumers,” Chiarelli said in a statement Friday.
“We will now proceed towards completion of the merger agreement and the associated application to the Ontario Energy Board for the cre- ation of the new company.”
Markham councillors and staff had been mulling the decision for months, but despite dozens of incamera meetings had failed to come to a consensus.
“We have to ask why have all the other cities approved this deal unanimously,” said pro-merger Councillor Colin Campbell, who added that even small savings would be well received by taxpayers. “If we say no, we will have others who say Markham doesn’t reach for the top . . . and won’t want to do business with us.”
Most of those opposed said it just wasn’t good enough for customers.
“If we say no, we will have others who say Markham doesn’t reach for the top.”
COUNCILLOR COLIN CAMPBELL
“From what I have learned, this is a huge and confusing deal,” said deputy mayor Jack Heath, who sits on the PowerStream board. “And I don’t think it brings enough benefit for the citizens of Markham.”
Among the concerns of some councillors were that Markham will be giving up its 34-per-cent stake in PowerStream for a 15-per-cent stake in MergeCo and that the city would have to possibly take on debt to invest up to $47.3 million to acquire Hydro One Brampton.
According to estimates in a city staff report, the merger means the average resident will save $24 to $30 per year, with the first significant savings occurring in 2021. Businesses will likely see significantly more savings down the road.
The approved merger now requires approval from the Ontario Energy Board. The estimated closing date is March 31.