By Joelle Kovach, Peterborough Examiner, (Tuesday, February 23, 2016) – The city needs to sell now if it wants to get a good price for its electrical utility, an official told councillors on Monday.
Negotiations have already begun to sell Peterborough Distribution Inc. (PDI), the city-owned hydro distribution company, to Hydro One.
On Monday evening, council voted to start a public consultation that will allow citizens to weigh in on the potential sale. But first, councillors heard why it’s a good idea to sell PDI.
John Stephenson, president and CEO of City of Peterborough Holdings Inc., said PDI is cost-efficient and well-run.
But local utilities have been bought by larger one for years now; there are 72 utilities left in Ontario, down from more than 300 in the late 1990s.
Stephenson said PDI is the 25th largest in the province, and that it generates $1 million a year for the city.
But he expects that $1-million figure to decline – and so will interest from a prospective buyer such as Hydro One.
“I’m not trying to be alarmist, but I think they (opportunities to sell) are shrinking,” he said.
Still, Coun. Keith Riel asked what would happen if the city held onto its utility. Stephenson cautioned against dithering.
“Then someone is going to be telling you what to do with your utility instead of doing what you want with that utility,” he said.
Coun. Diane Therrien asked whether any other local utilities – perhaps in the GTA – would be interested in merging with PDI.
“It’s a partial solution – but it’s not going to get you where you need to be,” Stephenson said.
He said a merger would mean “diluted control” over the utility for the city, with not much in return. (If the city sold PDI, it would get the profits.)
Councillors weren’t expected to debate the issue on Monday. They were hearing what Stephenson and lawyer Mark Rogers had to say about the prospective sale.
Then councillors voted to allow a public consultation to begin. The first step is a public meeting – scheduled for March 3 at Market Hall – where citizens can hear another, similar presentation and then weigh in.
Council gets to ultimately decide whether to sell the utility after hearing from the public about it.
On Monday, the public gallery at council chambers was full of people who’d come to hear about the prospective sale. They didn’t speak to councillors.
But Roy Brady of the Council of Canadians said in an interview that he’s unhappy the province is promoting the idea of local utilities being swallowed up by larger ones as a means of cutting distribution costs.
Meanwhile Queen’s Park sets the hydro rates, Brady points out – and sets those rates high.
“They don’t save money, yet they expect the city to save,” he said.
Lynn Moir Hopkins, a former city councillor, also said in an interview that she doesn’t like the idea of selling PDI.
“We’ll run into problems because the public will lose control (of the utility),” she said. “And they’re empire-building.”
But Coun. Lesley Parnell thanked Stephenson, saying he has the expertise to inform both councillors and the public on this important matter.
She told him she was glad he will be speaking at the public meeting.
“Your presentation was good,” she said. “More people need to hear it.”
The public meeting takes place at 6:30 p.m. on Thursday, March 3 at Market Hall.