Ontario Energy Minister, Hamilton Mayor promote HUC merger as beneficial to customers

News Apr 21, 2015 by Kevin Werner Hamilton Mountain News

 Ontario’s electricity rates will continue to rise, but proposed mergers involving utilities such as Hamilton’s Horizon Utilities Corporation will cushion the increases, says Energy Minister Bob Chiarelli.

In an interview April 20 while in Hamilton to help announce a $12-million pipeline project by Air Liquide connecting ArcelorMittal, Chiarelli said electrical rates will continue to climb and the only way to reduce those hikes is to allow for more mergers among utilities.

“Rates will continue to increase,” said Chiarelli. “That’s why we are working hard to mitigate (the increases). That’s why these mergers are so important. That is part of mitigating rates.”

Chiarelli was champion the proposed amalgamation of Horizon Utilities with PowerStream Holdings, Hydro Brampton and Enersource Corp. announced last week by the province that if approved by all shareholders, would create the second largest distribution corporation in the province with about 1 million customers.

“Will this help customers? Yes,” said Chiarelli. “It will have better service, it will help mitigate rate increases. These are good reasons.”

Chiarelli’s support for the merger came on the same day that the Ontario Energy Board announced rate increases April 20 that will see the peak rate jump to 16 cents kWh from 14 cents kWh effective May 1. Off-peak power rates will see a slight nudge upwards to 8 cents from 7.7 cents, and mid-peak rates will rise to 12.2 cents from 11.4 cents.

A typical household will see a $5.71 or 4.6 per cent jump in their monthly hydro bill.

Ontario’s hydro rates is the second highest in Canada behind P.E.I. , a figure that Chiarelli challenged when he said the province is in “the middle of the pack” when it comes to rate increases among Canadian provinces and portions in the United States.

“We are close to the middle of the pack in terms of where the rates are,” said Chiarelli. “They are not (at an acceptable level).”

The proposed merger for Horizon Utilities Corp. will be the third amalgamation for the corporation since 2000 when HUC was originally formed from the surrounding suburban utilities. Horizon also merged with St. Catharines Hydro in 2005. There had also been discussions about a possible merger with Guelph, but the deal was scuttled.

Max Cananzi, chief executive officer and president of HUC said there were “significant benefits” that came from both mergers.

He said that “early indications” suggest the four-utility merger will provide “significant customer benefits” according to a draft business case document HUC will be presenting to councillors sometime in June. He said the merger will “relieve” some of the rate pressure homeowners are currently feeling.

“So far we are encouraged,” said Cananzi.

But Chiarelli and HUC officials acknowledge there will be job losses as the merger takes place, with most of the reductions occurring through attrition.

“The job losses will occur over time in terms of more efficiencies,” said Chiarelli.

Hamilton councillors, the sole shareholder of Horizon Utilities, will be contemplating a notice of motion from Ward 4 councillor Sam Merulla that requests the city keep the corporation in public hands.

Chiarelli acknowledges each utility, which is publicly owned, needs to get approval from its shareholders for the merger to take place. For the merger to work, say officials, all four utilities must be involved.

“If the shareholders do not want to do it, if that happens we can accept it because we respect the democratic aspect of this process,” said Chiarelli. “I’m not going to second guess what Hamilton city council is going to do.”

Hamilton Mayor Fred Eisenberger said so far he backs Horizon joining the merger.

“There is a general sense mergers in the past have been successful,” said Eisenberger. “(They) have provided cost avoidance and downward pressure on rates. The way forward is clearly mergers and creating those conditions for efficiencies, and cost reductions.”

Still, Eisenberger says there remain questions about control and governance of the new entity that council needs to review.

“These are all public entities,” said Eisenberger. “Municipalities are all shareholders in the utilities. That is not going to change. That gives me some confidence.”

 

 

Ontario Energy Minister, Hamilton Mayor promote HUC merger as beneficial to customers

News Apr 21, 2015 by Kevin Werner Hamilton Mountain News

 Ontario’s electricity rates will continue to rise, but proposed mergers involving utilities such as Hamilton’s Horizon Utilities Corporation will cushion the increases, says Energy Minister Bob Chiarelli.

In an interview April 20 while in Hamilton to help announce a $12-million pipeline project by Air Liquide connecting ArcelorMittal, Chiarelli said electrical rates will continue to climb and the only way to reduce those hikes is to allow for more mergers among utilities.

“Rates will continue to increase,” said Chiarelli. “That’s why we are working hard to mitigate (the increases). That’s why these mergers are so important. That is part of mitigating rates.”

Chiarelli was champion the proposed amalgamation of Horizon Utilities with PowerStream Holdings, Hydro Brampton and Enersource Corp. announced last week by the province that if approved by all shareholders, would create the second largest distribution corporation in the province with about 1 million customers.

“Will this help customers? Yes,” said Chiarelli. “It will have better service, it will help mitigate rate increases. These are good reasons.”

Chiarelli’s support for the merger came on the same day that the Ontario Energy Board announced rate increases April 20 that will see the peak rate jump to 16 cents kWh from 14 cents kWh effective May 1. Off-peak power rates will see a slight nudge upwards to 8 cents from 7.7 cents, and mid-peak rates will rise to 12.2 cents from 11.4 cents.

A typical household will see a $5.71 or 4.6 per cent jump in their monthly hydro bill.

Ontario’s hydro rates is the second highest in Canada behind P.E.I. , a figure that Chiarelli challenged when he said the province is in “the middle of the pack” when it comes to rate increases among Canadian provinces and portions in the United States.

“We are close to the middle of the pack in terms of where the rates are,” said Chiarelli. “They are not (at an acceptable level).”

The proposed merger for Horizon Utilities Corp. will be the third amalgamation for the corporation since 2000 when HUC was originally formed from the surrounding suburban utilities. Horizon also merged with St. Catharines Hydro in 2005. There had also been discussions about a possible merger with Guelph, but the deal was scuttled.

Max Cananzi, chief executive officer and president of HUC said there were “significant benefits” that came from both mergers.

He said that “early indications” suggest the four-utility merger will provide “significant customer benefits” according to a draft business case document HUC will be presenting to councillors sometime in June. He said the merger will “relieve” some of the rate pressure homeowners are currently feeling.

“So far we are encouraged,” said Cananzi.

But Chiarelli and HUC officials acknowledge there will be job losses as the merger takes place, with most of the reductions occurring through attrition.

“The job losses will occur over time in terms of more efficiencies,” said Chiarelli.

Hamilton councillors, the sole shareholder of Horizon Utilities, will be contemplating a notice of motion from Ward 4 councillor Sam Merulla that requests the city keep the corporation in public hands.

Chiarelli acknowledges each utility, which is publicly owned, needs to get approval from its shareholders for the merger to take place. For the merger to work, say officials, all four utilities must be involved.

“If the shareholders do not want to do it, if that happens we can accept it because we respect the democratic aspect of this process,” said Chiarelli. “I’m not going to second guess what Hamilton city council is going to do.”

Hamilton Mayor Fred Eisenberger said so far he backs Horizon joining the merger.

“There is a general sense mergers in the past have been successful,” said Eisenberger. “(They) have provided cost avoidance and downward pressure on rates. The way forward is clearly mergers and creating those conditions for efficiencies, and cost reductions.”

Still, Eisenberger says there remain questions about control and governance of the new entity that council needs to review.

“These are all public entities,” said Eisenberger. “Municipalities are all shareholders in the utilities. That is not going to change. That gives me some confidence.”

 

 

Ontario Energy Minister, Hamilton Mayor promote HUC merger as beneficial to customers

News Apr 21, 2015 by Kevin Werner Hamilton Mountain News

 Ontario’s electricity rates will continue to rise, but proposed mergers involving utilities such as Hamilton’s Horizon Utilities Corporation will cushion the increases, says Energy Minister Bob Chiarelli.

In an interview April 20 while in Hamilton to help announce a $12-million pipeline project by Air Liquide connecting ArcelorMittal, Chiarelli said electrical rates will continue to climb and the only way to reduce those hikes is to allow for more mergers among utilities.

“Rates will continue to increase,” said Chiarelli. “That’s why we are working hard to mitigate (the increases). That’s why these mergers are so important. That is part of mitigating rates.”

Chiarelli was champion the proposed amalgamation of Horizon Utilities with PowerStream Holdings, Hydro Brampton and Enersource Corp. announced last week by the province that if approved by all shareholders, would create the second largest distribution corporation in the province with about 1 million customers.

“Will this help customers? Yes,” said Chiarelli. “It will have better service, it will help mitigate rate increases. These are good reasons.”

Chiarelli’s support for the merger came on the same day that the Ontario Energy Board announced rate increases April 20 that will see the peak rate jump to 16 cents kWh from 14 cents kWh effective May 1. Off-peak power rates will see a slight nudge upwards to 8 cents from 7.7 cents, and mid-peak rates will rise to 12.2 cents from 11.4 cents.

A typical household will see a $5.71 or 4.6 per cent jump in their monthly hydro bill.

Ontario’s hydro rates is the second highest in Canada behind P.E.I. , a figure that Chiarelli challenged when he said the province is in “the middle of the pack” when it comes to rate increases among Canadian provinces and portions in the United States.

“We are close to the middle of the pack in terms of where the rates are,” said Chiarelli. “They are not (at an acceptable level).”

The proposed merger for Horizon Utilities Corp. will be the third amalgamation for the corporation since 2000 when HUC was originally formed from the surrounding suburban utilities. Horizon also merged with St. Catharines Hydro in 2005. There had also been discussions about a possible merger with Guelph, but the deal was scuttled.

Max Cananzi, chief executive officer and president of HUC said there were “significant benefits” that came from both mergers.

He said that “early indications” suggest the four-utility merger will provide “significant customer benefits” according to a draft business case document HUC will be presenting to councillors sometime in June. He said the merger will “relieve” some of the rate pressure homeowners are currently feeling.

“So far we are encouraged,” said Cananzi.

But Chiarelli and HUC officials acknowledge there will be job losses as the merger takes place, with most of the reductions occurring through attrition.

“The job losses will occur over time in terms of more efficiencies,” said Chiarelli.

Hamilton councillors, the sole shareholder of Horizon Utilities, will be contemplating a notice of motion from Ward 4 councillor Sam Merulla that requests the city keep the corporation in public hands.

Chiarelli acknowledges each utility, which is publicly owned, needs to get approval from its shareholders for the merger to take place. For the merger to work, say officials, all four utilities must be involved.

“If the shareholders do not want to do it, if that happens we can accept it because we respect the democratic aspect of this process,” said Chiarelli. “I’m not going to second guess what Hamilton city council is going to do.”

Hamilton Mayor Fred Eisenberger said so far he backs Horizon joining the merger.

“There is a general sense mergers in the past have been successful,” said Eisenberger. “(They) have provided cost avoidance and downward pressure on rates. The way forward is clearly mergers and creating those conditions for efficiencies, and cost reductions.”

Still, Eisenberger says there remain questions about control and governance of the new entity that council needs to review.

“These are all public entities,” said Eisenberger. “Municipalities are all shareholders in the utilities. That is not going to change. That gives me some confidence.”