THUNDER BAY – Two municipally owned Northwestern Ontario electrical distribution utilities are one step closer towards a merger.
Thunder Bay city council on Monday night voted in favour of amalgamating Thunder Bay Hydro and Kenora Hydro into one yet to be named company.
The proposed merger still needs to be approved by Kenora council, with the matter scheduled to be addressed on Tuesday.
Thunder Bay Hydro chief executive officer Robert Mace said utilities are having increased challenges operating in today’s electricity industry.
“It’s basically getting harder to run and more expensive to run but we all know that there is a lot of pressure to reduce rates. Electricity rates in Ontario are a big issue,” Mace told council.
“A merger is one of the ways we can achieve economies of scale and benefit the utility, the customer and the shareholders while continuing to be responsive to our local customer needs.”
If approved, the amalgamated company would be 90.9 per cent owned by Thunder Bay with Kenora to own the remaining 9.1 per cent.
“The overall goal of this is really to generate efficiencies which put downward pressure on electricity rates in the future,” Mace said.
“Secondary benefits include a better resourced company with the ability to implement new technology and new services. Really for the nature of this transaction, being a merger of municipally owned utilities, we’re still going to remain having local staff accountable for providing excellent customer service to our local customers.”
Mace said the two utilities currently each have their own billing systems, financial systems and regulatory systems, which can all be condensed.
“You’ll see very little difference in Thunder Bay. We’re going to maintain a Thunder Bay office. Thunder Bay will be the head office of the merged company. All of our operations centre staff will remain,” Mace said.
“Kenora has an existing operations centre with crews. We will maintain the crews in Kenora to maintain and build the electricity system and to restore power as needed. The efficiencies we’re looking at generating through this merger are primarily administrative.”
The pending merger would not affect Thunder Bay Utility Services Inc. or Thunder Bay Renewable Power Inc. affiliate companies, which would continue to be completely owned by the Thunder Bay Hydro holding company.