By Joelle Kovach, Peterborough Examiner (February 19, 2016) – The city-owned Peterborough Distribution Inc. (PDI) could be sold to Hydro One.
PDI distributes electricity in Peterborough, Lakefield and Norwood. The deal would include PDI only – not the local water or power-generation utilities of the city-owned Peterborough Utilities group.
Mayor Daryl Bennett and city CAO Allan Seabrooke said negotiations with Hydro One have already begun.
But it’s far from a done deal: the public would have to be consulted first, and council would have to approve it.
Furthermore, Bennett says there are many details to work out: a price tag for PDI hasn’t been determined yet, for instance, and it’s unclear how the sale might trim hydro bills.
Seabrooke said there’s no time-frame for a sale; it could take months.
On Monday, councillors will hear a presentation from utility representatives regarding the prospective sale.
But council is not expected to debate the matter. Seabrooke said councillors will vote only on whether to start a public consultation; that would mean a public meeting within a few weeks.
Although hydro rates are set by the Ontario Energy Board, Seabrooke said it’s more efficient for Hydro One to run a local utility – and those cost-savings are passed onto the customer.
That’s why Bennett says the prospective sale of PDI could mean less-expensive hydro bills.
“There’s no downside to it (the potential sale),” he said.
That makes Roy Brady of the Council of Canadians bristle: He sees a downside, all right.
“You’d be selling to a slowly privatizing company – and losing quite a bit of control,” he said.
Brady is referring to the fact that the Ontario government is selling 60% of Hydro One to raise money for construction projects.
In September, council wrote to Queen’s Park to oppose the partial sale of Hydro One. The letter was written at the urging of Coun. Diane Therrien.
She said she finds it “short-sighted” to sell off public utilities, whether it’s PDI or 60% of Hydro One.
Yes, the potential sale of PDI would pay in the short term, she wrote in a statement to The Examiner. But she sees drawbacks.
“Local distribution companies are community assets and revenue generators, and the long-term implications – longer than five years – need to be thoroughly considered,” she wrote to The Examiner on Friday.
Yet the sale of small, local utilities has been happening across the province for years.
Seabrooke points out that there are only 72 local utilities left in Ontario, down from more than 300 in the late 1990s.
In 2012, economist Don Drummond recommended consolidating even further – down to eight regional utilities – as a way of cutting back energy distribution costs for Ontarians.
Selling local utilities is also lucrative for cities.
When Woodstock Hydro was sold to Ontario Hydro last year, for example, the closing price was $46.2 million. (That’s for a utility with 15,000 customers, compared to PDI’s 30,000.)
Woodstock customers also saw a 1% reduction in their distribution rates, and hydro rates were frozen for five years.
Seabrooke said a public meeting would “present the facts” to citizens, and then people could weigh in.
But Brady says there have been consultation processes in the past over controversial decisions such as whether to extend The Parkway. There was much public dissent at those meeting, he said – and it was ignored by council.
“Consultation means ‘Alright you can talk – but we’re not listening.’”