The City of Peterborough and Hydro One have reached an agreement for Hydro One’s acquisition of Peterborough Distribution Inc. (PDI) from the City for $105 million plus terms that include distribution rate guarantees for customers as well as a separate agreement for the construction of a new regional operations centre in Peterborough.
The agreements comprising the transaction meet the terms and conditions approved by Council, including:
- A 1% distribution rate reduction and a five-year freeze in distribution rates for customers - A second five-year period with distribution rate increases limited to inflation and an earnings sharing mechanism to offset rates in year 11 and onward - Protections for PDI employees with employees receiving employment offers to move to Hydro One - A sale price of $105 million - An agreement to develop a regional operations centre and new fleet maintenance facility in Peterborough on specified pieces of land to be acquired concurrently with the closing of the acquisition of the assets of PDI following regulatory approvals
The agreements are subject to Ontario Energy Board (OEB) approval. The OEB regulates the province’s energy sector, including setting rules for electricity companies and establishing rates that energy utilities are permitted to charge.
PDI is one part of the Peterborough Utilities group of companies. PDI includes the “poles and wires” business of Peterborough Utilities. City of Peterborough Holdings Inc. retains ownership of the rest of the group of companies, including its water utility, the Riverview Park and Zoo, metering services, and its power generation business.
[UPDATE, March 9th]: Here is what Hydro One says in a press release...
"Hydro One announced today that negotiations on the proposed acquisition of Peterborough Distribution Inc. have ceased as both parties were unable to reach a final agreement.
The role of both parties in these commercial negotiations is to ensure that the end result is an outcome that creates customer and shareholder value. In this particular case, despite the strong offer made to the City of Peterborough, the two parties were unable to achieve that balance.
Hydro One would like to thank Mayor Bennett, the City of Peterborough and members of both negotiating teams and looks forward to continuing its relationship as long-time neighbours and proud members of the Peterborough community."
Hydro One has informed the City and City of Peterborough Holdings Inc. that it is withdrawing from negotiations regarding the sale of Peterborough Distribution Inc., according to a City of Peterborough release.
Hydro One first approached the City in 2014 to express interest in purchasing PDI. City Council responded favourably to the opportunity when Hydro One entered into a letter of intent that included a competitive price, job and benefit guarantees for existing PDI workers, distribution rate and other rate protections for customers, and commitments for new jobs and new investments such as building a new regional Hydro One operations centre in Peterborough. Negotiations have been ongoing for more than two years.
According to a media release from the City, PDI executives continue to monitor the pressures and changes affecting the electricity distribution sector on behalf of its sole shareholder, the Corporation of the City of Peterborough.
PDI says it will continue to deliver exceptional service to its customers, thanks to the organization’s employees and management.