City announces it will sell local utility to Hydro One after exclusive negotiations which began last fall.
WOODSTOCK -- Woodstock City Councillors voted in favour Wednesday to sell 100 percent of shares in Woodstock Hydro to Hydro One for $46.2 million dollars.
President and CEO of Hydro One, Carmine Marcello was also in attendance for the vote, which was 5-2 in favour of a sale, a vote which was recorded to include Woodstock Mayor Pat Sobeski. Only Councillors Deb Tait and Sandra Talbot opposed the idea of selling the local utility.
One of the pillars of the deal sees Hydro One agreeing to pay the City of Woodstock approximately $29.2 million net after assuming Woodstock Hydro's existing debt.
According to a subsequent release by the city, additional consideration in the transaction includes the transfer of real estate from Woodstock Hydro to the City of Woodstock having a value in excess of $2 million.
Following the meeting, Mayor Pat Sobeski defended the lack of formal discussions with the community around the sale.
"Unlike Haldimand County, which went into an exclusive agreement which they kept quiet, we announced in October that we were in exclusive negotiations with Hydro One. As a result over the past six months, citizens were aware of it, they were talking with councillors about it. As you can see, a couple of different councillors had another point of view, which was raised during the meetings. There were lots of discussions, pro and con, but at the end of the day, when they weighed the package together, councillors felt this was the way to go. Certainly many, many citizens have been contacting councillors over the past six months, so there's been that informal contact that's taking place. We've had certainly both sides in the meetings discussing and taking a look at all the key points."
In October 2013, Council decided to enter into negotiations with Hydro One regarding a potential sale of the local utility. The Ontario Energy Board still has a final say over whether or not the sale can go forward as planned, a process which could take up to six months.
Marcello meanwhile, described following the vote how the deal came together.
'"From Hydro One's perspective, we saw already serving the community, that this was a natural fit and we were able to provide great service and as the mayor has pointed out and council has voted in favour, real value to the community and not just in monetary terms, but economic development and hopefully in the long run, good reliability and service."
After Wednesday's public meeting, Councillor Sandra Talbot reiterated her points to council before the vote was taken, saying while potential for growth with Woodstock Hydro is limited, the decision to sell means an unfortunate day for the City and Woodstock Hydro.
"I went into the negotiations knowing that I was against the sale and I truly believe that by sitting in on those meetings I learned a lot, but at the end of the day, for me and what I thought for the citizens of Woodstock, my decision was to retain Woodstock Hydro. It's not only about the money for me, it's about everything else, we controlled it, we made the decisions, we looked after it, now we've just given that all away."
Councillors also voted in favour of holding a set of public meetings June 16, to which Mayor Pat Sobeski says residents can come and ask questions and look at the entire deal with Hydro One staff in attendance.
Highlights of the Deal:
-Hydro One will apply to the Ontario Energy Board to reduce the electricity distribution rate for Woodstock Hydro customers by 1% and freeze that rate for five years.
-All Woodstock Hydro employees will transfer to Hydro One after the sale and continue to have jobs.
-Hydro One will build a new operations and field business centre in the City of Woodstock over three years as it restructures its regional operations. In addition Hydro One will bring approximately 45 jobs to the City as it consolidates operations centres in the area.
-Certain Woodstock Hydro property including the downtown office/operations facility and four properties with MicroFIT solar installations will be retained by the City of Woodstock.
-Hydro One will lease and continue operations in the 16 Graham Street office during the construction of the new Operations and Business centre.
-Hydro One has been a good corporate citizen and will continue to support a wide array of community events and organizations in the City of Woodstock.
-The total value of the deal is $46.2 million. Hydro One will pay City of Woodstock approximately $29.2 million net after assuming Woodstock Hydro's existing debt.
-A further $4.3 million in cash dividend and adjustments is expected to bring the total proceeds realized to approximately $33.5 million.
-Hydro One will establish an ongoing Woodstock Advisory Committee, including representatives of City Council, to monitor and provide input about customer service and other matters. Hydro One has agreed to maintain customer service and reliability standards consistent with Woodstock Hydro's past performance.
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