This merger is important not only for the energy sector, but more importantly, for residents and consumers, Mayor Bonnie Crombie said today during a signing ceremony in that will establish Ontario’s second largest local electric distribution company.
MergeCo is the temporary name for the new utility company that will service Mississauga ratepayers. Its head office will be in Mississauga. Enersource Corporation, Horizon Utilities Corporation and PowerStream Inc. are looking to merge and jointly purchase Hydro One Brampton Networks Inc. from the Ontario Government, with a service territory of approximately 1,800 km.
“This new utility company will provide the residents of Mississauga with cost savings, new efficiencies, and improved customer service, along with safer, reliable and clean electricity,” Mayor Bonnie Crombie said. “It’s a smart merger that’s in line with the Ontario government’s commitment to improve energy delivery and cost savings for consumers,” Mayor Bonnie Crombie added.
Mayor Crombie thanked Enersource CEO Peter Gregg and Chair Norm Loberg “for all their due diligence, hard work and for making today a reality.” Mayor Crombie also applauded Ontario Energy Minister Bob Chiarelli and the Wynne government “for paving the way for this type of consolidation to happen.”
“I am honoured that my Council colleagues unanimously chose me to serve on the Transitional Committee and Board of MergeCo,” Mayor Crombie said. “I will use these new positions to defend the best interest of Mississauga residents and local businesses and to be accountable to local ratepayers,” Mayor Crombie added.
“My job as Mayor – representing almost 800,000 residents – is to protect Mississauga’s investment in this new company. It is important that this new utility company remains accountable to our City’s ratepayers and I will demand this accountability. This is what I have done as a member of the Enersource Board for over a year now.”
The appointment of a President/CEO, board appointments, job function locations and other key developments will be announced in the coming months. There will be no single controlling shareholder interest in the new company, which will ensure the local interests of all communities will continue to be served.
Benefits to Customers
- Lower distribution rates for customers over the long-term than if the status quo was maintained (Customers save $1.1 billion over 25 years).
- Better customer service through enhanced and shared systems.
- Broader range of products and services for customers than is currently available.
- Enhanced customer service through the introduction of innovative technologies that a larger utility can more easily implement.
Benefits to Shareholders
- Increased shareholder value based on net income growth between $220 million and $250 million and a steady and growing dividend stream.
- Increased access to capital for investment in new business opportunities and to improve community economic development.
- Stronger platform for growth due to larger geographical footprint, more diversification, greater capital resources and opportunity for expansion.
- Greater input on energy and regulatory policy for the benefit of customers and shareholders.
Mayor Crombie said “The agreements signed today reflect the merger goals we established from the beginning – best value for customers and optimal returns for municipal shareholders, and returns that can be reinvested into communities.”
“This is truly an opportunity to become a best-in-class utility that serves as a model of consolidation. Now let’s get to work, and deliver real results for the people of our cities,” Mayor Crombie concluded.