Guelph City Council voted December in favour of a merger between Guelph Hydro Electric Systems and Alectra Inc.
The City of Guelph would receive a 4.63 per cent ownership interest in Alectra, and one permanent seat on Alectra’s Board of Directors. As part owner of a larger municipally-owned utility, the City of Guelph is expected to receive higher annual dividends to invest in local infrastructure, programs, and services. In addition, Guelph Hydro’s current location will be home to Alectra’s Southwest Ontario operations hub, and a new Green Energy & Technology Centre (GRE&T Centre).
If the merger proceeds, next year, on top of its regular dividend, Guelph Hydro would pay the City of Guelph a special dividend of $18.5 million, which can be reinvested in the local community. Over the next 20 years, the city is expected to receive $10 million more in dividend payments than it would if Guelph Hydro continued operating alone.
After the merger, according to published statements, customers in Guelph and Rockwood will avoid an estimated 5 per cent distribution rate increase in 2021, and another estimated 5 per cent increase in 2026, “while Alectra maintains or exceeds current service standards.”
As part of developing the GRE&T Centre, Alectra plans to invest $5 million to renovate parts of Guelph Hydro’s current headquarters for demonstration areas, laboratories or showrooms, and another $3 million a year to fund pilot projects, demonstrations, salaries, administration, marketing and partnerships.