By Joel Wittnebel, The Oshawa Express (May 19) – A group of concerned residents is saying the citizens of Oshawa should have the final say when it comes to any potential merger decision regarding the OPUC.
Last month, the Oshawa Power and Utilities Corporation announced it had signed into a memorandum of understanding with the Whitby Hyrdo Electric Company and the Veridian Corporation regarding explorations of a merger.
However, members of the Public Power Coalition and the retirees chapter of Unifor Local 222 are claiming things are not what they appear, saying they are “disturbed” with what has transpired to this point and that the utilities are merely using the merger “keyword” to hide the fact that this is a sale.
Despite the OPUC’s claims that there will be public meetings to discuss the potential merger with the public, Gord Vickers with the Public Power Coalition says it seems a decision has already been made.
“The mayor and the CEO already seem to be in favour of a merger without even consulting with the public,” Vickers says. “The public has to be made aware. I think they’ve tried to calm everybody’s fears of a merger. This is a sale.”
It’s something that Oshawa Mayor John Henry denies, claiming there is an “absolute difference” between a merger and a sale.
“This isn’t about selling the business and walking away from it. This is about merging like businesses, creating synergies and opportunities to increase your dividend to manage your costs,” he says.
“This isn’t doing what the province has done, we’re not selling our utility. This isn’t going out and going to the market and looking for money for our utility as they did with Hydro One. This is an entirely different process.”
It’s a process that could take some time, Henry adds. However, according to the recently released memorandum of understanding between the three organizations, the data to inform any potential decision is set to be gathered by the end of this year.
Vickers, however, says the public should be given the chance to vote in a referendum on the possibility of a merger beforehand.
Henry suggests it may be a little early to talk of such arrangements.
“They’re entitled to do what they choose to do…but in the meantime, before you create turmoil, or a challenge, maybe what we need to do is have the answers,” Henry says.
Vickers says he believes the idea hasn’t surfaced at council because city hall perhaps already knows the answer. When the sale of Hydro One began last year, the Public Power Coalition surveyed the citizens of Oshawa and found 89 per cent did not support the sale of the hydro system.
“We have an excellent public utility,” Vickers says.
“We have (one of) the lower rates in Ontario – why would we take a chance of being with Veridian and the rest of them?”
The same was said by fellow member Robert Goheen, who questions the value the OPUC will be left with following any potential merger.
“That doesn’t mean that the OPUC or Oshawa is going to have a greater asset at the end of the day…it’s actually going to have less of an asset for us because we have less control,” he says.
Details around any future shareholder arrangements or company value have been diverted by the OPUC, saying it is too early to answer such questions.
Acccording to Atul Mahajan, OPUC’s CEO, arrangements for public meetings are currently in the works, with the three organizations working to coordinate dates.
“We’ve got to respect our partners,” he says. “It’s got to be coordinated and we’ve got to be in synch.”
Currently, Mahajan says the OPUC is working as much as possible with its own staff to gather the information, but the MOU stipulates that the organizations are able to obtain a consultant to assist.
While no budget has been shared, it is written in the MOU that any costs will be born 50 per cent by Veridian, 27 percent by the OPUC and 23 percent by Whitby Hydro.
How did we get here?
It’s a question many residents have been asking, and one that has a complicated answer.
Seemingly out of the blue on April 28, the OPUC announced the MOU and explorations of a potential merger.
At the time, Henry said the OPUC’s board was well within its mandate to look into such possibilities.
However, a closer look at the shareholder agreement between the city OPUC suggests that perhaps things should have been brought to council.
The agreement details the types of decisions the OPUC would need council’s permission for, such as; changing the company’s name or change the types of shares or amend bylaws.
Also listed under the “Statutory Approval Rights” section is the ability to “amalgamate with any other corporation,” which would require council approval.
Additionally, under the section of “Additional Approval Rights” is a second clause dealing with mergers, which suggests permission would need to be given from council to even enter into such discussions.
The section suggests the OPUC would need approval to “enter into any transaction, including the acquisition or sale of assets, mergers, amalgamations or other agreements which would result in a material change to the business of the corporation.”
However, according to Mahajan, this segment does not include discussions or MOUs.
“A transaction is not a discussion or an MOU,” he says. “It means a definitive transaction.”
Further, he adds the approval would need to be given following the exploration phase, which is currently underway.
“After we’ve explored the benefits and we’ve got an opportunity to reach an agreement, that’s when we’ve got to go to the shareholder for approval,” he says.
However, Vickers suggests that it was council’s December 2015 education and training session with the OPUC to discuss “local distribution company trends” – currently under investigation by the Ontario Ombudsman following a complaint that it was closed improperly to the public – that a nod was given to the OPUC regarding merger talks.
“I suspect that was the start of the OPUC and the merger with Veridian and the rest and how to go about it,” he says.
The results of the ombudsman’s report have not yet been made public.
It’s another claim that Mayor Henry denies.
“The December meeting gave us an idea of what was going on in the province,” he says, noting councillors and himself were first made aware of the MOU the day prior to its release when they were invited to a meeting outside city hall by the OPUC.
“There was an information meeting held and everyone was individually invited to go and hear the information that was being provided prior to the message going out.”
For Larry Ladd with the Public Power Coalition, Oshawa council owes it to residents to ask for their opinion, and says councillors shouldn’t be taking a back seat on this issue.
“The city is the owner of it. You would think that the owner, if there’s a merger or sale, or a combination of both, that that would be led first by your council,” he says.
Vickers has much stronger words for his municipal leaders.
“I think that if they continue…the mayor and the council, I think they have a death wish politically.”