The Ontario Energy Board (OEB) has approved the sale of all Collus Powerstream shares to EPCOR.
The OEB announced its decision on Thursday (Aug. 30) at 4:15 p.m., and the result of that decision means EPCOR will become the new owner/operator of the town's electrical utility.
“We’re happy and we’re pleased,” said Collingwood CAO Fareed Amin. “It’s obviously good news for the municipality and good news for the ratepayers.”
The town made an application to the OEB to approve two share purchase transactions. First that the town purchase the Collingwood PowerStream shares currently owned by Alectra Utilities. Alectra was formerly called PowerStream and purchased 50 per cent of the Collus shares from the town in 2012. According to the OEB’s decision and order document released today, the town proposed to purchase the 50 per cent shares back from Alectra for $13 million. The town sold the shares to Powerstream in 2012.
Second, the OEB was asked to approve EPCOR’s purchase of all Collus shares effectively making EPCOR the new owner and operator of the electrical distribution company. According to the OEB document, the town is proposing to sell all the shares to EPCOR for $36.8 million, which includes a $25 million cash payment plus the assumption of debt and working capital costs.
According to a press release issued by the town of Collingwood this evening, the terms of the sale include job and location guarantees for Collus PowerStream employees and a contribution of $150,000 toward the Waterfront Master Plan.
The press release further states the town will receive between $12.5 million and $13 million from the sale of its remaining 50 per cent Collus shares.
EPCOR Utilities Inc. started as Edmonton’s municipally-owned power and water utility 125 years ago and has grown to own and operate several electrical distribution networks and water and wastewater treatment facilities in Canada and the United States.
The Ontario Energy Act requires a transmitter or distributor to get approval from the OEB before selling to or amalgamating with another corporation. Collingwood announced it would be pursuing a Collus sale to Epcor on January 30, 2017. Council voted to sell its remaining 50 per cent stake in Collus on October 23, 2017. The OEB application process began later that year.
The OEB applies what it calls a “no harm” test to proposals to sell or amalgamate Ontario electrical distribution or transmission utilities. The test measures the proposal’s ability to protect the interest of customers through prices, reliability, quality of electrical service, cost-effectiveness, economic efficiency and financial viability.
“The OEB is satisfied the proposed transactions meet the ‘no harm’ test and therefore approves both share purchase transactions,” states the OEB’s decision document.
According to Amin, there are still some items to be finalized before EPCOR takes over.
“The closing date and the final sale price will have to be finalized,” said Amin. “The expectation is that it would be finalized … in a couple months. That’s my hope.”
He said the only thing Collingwood residents will notice is a different nameplate on the current Collus PowerStream building and a reduction in their distribution rate.
The OEB also approved a request by EPCOR and the town for a one-per cent reduction in current electricity distribution rates for residential customers and for the reduction to be in effect for the first five years following the sale.
Amin said the town will be entering into a long-term lease agreement with EPCOR for the current Collus PowerStream facility on Stewart Road.
Collus Powerstream currently delivers electricity to 16,864 residential and general service customers in Collingwood, Stayner, Creemore and Thornbury.
To read the full OEB decision, click here.