Utility merger approved
The councils of Vaughan, Markham and Barrie have agreed to create the province’s second largest electricity distribution powerhouse by joining forces.
The union of PowerStream and Barrie Hydro Distribution, which still needs approval by the Ontario Energy Board, will save the combined utility more than $5 million per year, a report prepared by KPMG suggests.
The report concluded a merger of the two public power distributors — Vaughan and Markham own PowerStream and Barrie owns Barrie Hydro — could net multimillion-dollar annual savings through combining assets and achieving greater economies of scale.
“Vaughan and Markham realized tremendous benefits following the 2004 merger of the three utilities which created PowerStream,” Mayor Linda Jackson said in a statement. “It stands to reason that the three partnering municipalities in this venture will eventually experience similar benefits.”
Under the merger agreement, the City of Vaughan will own 45.3 percent of the merged utility, the Town of Markham will own 34.2 percent and the City of Barrie will control 20.5 percent.
“Merging Barrie Hydro and PowerStream is the right deal at the right time for all three of our municipalities,” Markham mayor and PowerStream vice-chair Frank Scarpitti said in a statement. “I am confident that the shareholder benefits outlined in the business case will be achieved and in some areas even exceeded.”
The combined utility will be headquartered in Vaughan and maintain at least two operation and administration centres, including one in Barrie.
A new 13-member board of directors will be named, with Vaughan controlling six seats, Markham four and Barrie three.
Both Barrie Hydro and PowerStream say labour concerns — including job security, relocation of positions and seniority rights — have been dealt with and no union workers or management staff will lose their jobs as a direct result of the merger.
Vaughan Today In print: October 10, 2008, page 6 Online: October 14, 2008 [link]