Thunder Bay, ON – Today, a Memorandum of Understanding (MOU) between Thunder Bay Hydro Electricity Distribution Inc. (Thunder Bay Hydro) and Kenora Hydro Electric Corporation Ltd. (Kenora Hydro) has been signed to authorize the exploration of a merger between the two utilities.
“The current technological and regulatory environment offers both opportunities for and challenges to local electricity distribution companies that might be better addressed through an integration of resources,” says Dave Sinclair, President and CEO of Kenora Hydro. “Our two utilities have already worked together in areas such as conservation, back office support and the acquisition of Smart Meter Technology. We share common values and have agreed on some vital common objectives as we explore the possibility of a merger.”
“A number of Ontario LDC’s are currently exploring or undertaking consolidation in order to achieve economies of scale and enhance their capability to serve customers in an industry that continues to become more complex,” points out Robert Mace, President and CEO of Thunder Bay Hydro. “As this complexity continues, larger, better resourced utilities will be better positioned to effectively and efficiently meet the needs of our customers.”
The two utilities will now begin a process of analyzing the potential advantages and feasibility of how their customers, municipal shareholders and other stakeholders might benefit through such a merger. This analysis will include consultation with customers and shareholders in both Kenora and Thunder Bay.
A copy of the MOU will be made available on the websites of both utilities.
Ultimately any recommendation resulting from this analysis to merge the utilities will require the approval of both the Corporation of the City of Kenora and the Corporation of the City of Thunder Bay, who are the municipal shareholders of each company.
Kenora Hydro has 14 employees who are dedicated to the delivery of electricity to its 5,600 customers in the City of Kenora, Ontario. Thunder Bay Hydro has 130 employees who service electrical distribution to over 50,000 customers in the City of Thunder Bay.
Both Local Distribution Companies are located in Northwestern Ontario and are owned by their respective municipalities.
For More Information –
Thunder Bay Hydro
Eileen Dias, Communications and Events Coordinator
Thunder Bay Hydro 807-343-1141
Dave Sinclair, President and CEO
Kenora Hydro Electric Corporation Ltd. 807-467-2075
Objectives of Merge
The Memorandum of Understanding between Thunder Bay Hydro and Kenora Hydro authorizes the evaluation of whether or not to merge the two municipally owned electricity distribution companies. It includes the following objectives of such a merge:
- A merged company will continue to be owned by the Municipal Shareholders.
- The merge would create a Northwestern Ontario based entity with local accountability and ownership. The entity will maintain a physical presence in each of the Parties’ service territories.
- The merge should create opportunities for efficiencies through economies of scale, innovation for the benefit of ratepayers, and competitive advantages in all relevant service territories, while sharing best practices across all facets of the business.
- That Municipal Shareholder value would be maximized now and in the future and that all such shareholders are treated fairly, while preserving asset value.
- The Parties would ensure that the OEB’s “no harm” to ratepayers test is met.
- Customer service levels would need to meet or exceed existing customer service levels of each Party.
- Existing employees would be treated fairly and may benefit from increased employment opportunities.
- The Parties would ensure that the existing focus on employee and public safety is maintained or enhanced.
- The economic development and social and environmental needs of each community would continue to be served.
The full text of the Memorandum of Understanding will be made available through each utility’s website.