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Utilities
#1
London Hydro is looking to purchase other hydro providers - specifically, the three in Waterloo Region.

London Hydro asks city to change shareholder agreement so it can grow

Quote:London Hydro wants to expand.

During a presentation to the strategic priorities and policy committee meeting Monday, officials said London is a limited market and so it wants the opportunity to buy smaller utilities in nearby cities.

The local utility wants to look into buying utilities in Cambridge, Kitchener and Waterloo, said CEO Vinay Sharma.

“We are ready for the future. We are ahead of utilities, not only in Ontario, not only in Canada, but in North America,” he said.
My Twitter: @KevinLMaps
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#2
(06-27-2018, 05:11 PM)KevinL Wrote: London Hydro is looking to purchase other hydro providers - specifically, the three in Waterloo Region.

London Hydro asks city to change shareholder agreement so it can grow

Quote:London Hydro wants to expand.

During a presentation to the strategic priorities and policy committee meeting Monday, officials said London is a limited market and so it wants the opportunity to buy smaller utilities in nearby cities.

The local utility wants to look into buying utilities in Cambridge, Kitchener and Waterloo, said CEO Vinay Sharma.

“We are ready for the future. We are ahead of utilities, not only in Ontario, not only in Canada, but in North America,” he said.

I can't speak for Waterloo or Cambridge, but almost certainly Kitchener will tell them to hit the road.

Does London not understand, tho, that the 3 cities are significantly larger than London? You're talking about 370,000 for London vs 500,000 for the trip-cities, not including the townships, which all 3 utilities partially own. Kitchener (Wilmot), Cambridge (North Dumfries) and Waterloo (Woolwich and Wellesley).

I say a better idea is for the tri-cities team up and buy London Hydro, we then could fund our Stage 2 LRT that way, as we know London doesn't have an LRT.
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#3
(06-27-2018, 05:31 PM)jeffster Wrote:
(06-27-2018, 05:11 PM)KevinL Wrote: London Hydro is looking to purchase other hydro providers - specifically, the three in Waterloo Region.

London Hydro asks city to change shareholder agreement so it can grow

I can't speak for Waterloo or Cambridge, but almost certainly Kitchener will tell them to hit the road.

Does London not understand, tho, that the 3 cities are significantly larger than London? You're talking about 370,000 for London vs 500,000 for the trip-cities, not including the townships, which all 3 utilities partially own. Kitchener (Wilmot), Cambridge (North Dumfries) and Waterloo (Woolwich and Wellesley).

I say a better idea is for the tri-cities team up and buy London Hydro, we then could fund our Stage 2 LRT that way, as we know London doesn't have an LRT.
The local utility wants to look into buying utilities in Cambridge, Kitchener and Waterloo, said CEO Vinay Sharma.

“We are ready for the future. We are ahead of utilities, not only in Ontario, not only in Canada, but in North America,” he said.

Sounds to me like Vinay Sharma has been living in a vacuum.(is London that far off the grid?)  Why would we give up our utilities and the profits that are utilized to offset budgets here.  There would be a lot of resistance to our leaders if they even considered this plan I suspect.
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#4
Governments really like to sell of long-term assets for short-term budgetary gains.
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#5
(06-27-2018, 08:22 PM)jamincan Wrote: Governments really like to sell of long-term assets for short-term budgetary gains.

Oh!?! This could pay for Stage 2 of the LRT!!!

Though I am 100% sure that Kitchener would never give up their hydro, and I doubt its residents would ever want to give it up either.

Almost seems to be a certain amount of ignorance with the idea of buy the utilities, like, how much does London think they'd have to pay?

Though, I suppose it might become a popular idea if "If we sell the utilities to the City of London, for $x billion dollar, it will pay for the LRT plus this, this and that.

That being said, users in both Cambridge and Kitchener pay less than users in London. Something to keep in mind for those residents, your bills would go up.

Of course, I really don't see this as ever happening, so really a moot point, IMHO.
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#6
They might not have a choice. If the in-coming provincial government and he-who-shall-not-named decide this will be one of their "efficiencies" forced amalgamation of utilities may happen whether the individual utilities want it or if it makes fiscal sense.
Everyone move to the back of the bus and we all get home faster.
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#7
(06-27-2018, 09:52 PM)Pheidippides Wrote: They might not have a choice. If the in-coming provincial government and he-who-shall-not-named decide this will be one of their "efficiencies" forced amalgamation of utilities may happen whether the individual utilities want it or if it makes fiscal sense.

That's not how it works. It has nothing to do with efficiency as the services they provide wouldn't benefit from any sort of amalgamation.

This is really a small handful of individuals smoking too much you-know-what and having dreams of becoming really large. You could bet that if the City of London did buy any utility, that money would funnel in London, not anywhere else.

Complicating the matter too that London Hydro also runs the water utility in London. I really see this an issue of 'fast cash' and hopefully our politicians are smart enough not to get involved with any sort of sell, no matter how good it looks on paper. And as I mentioned before, Cambridge and Kitchener manage their systems very well, compared to London anyway. Waterloo, perhaps they could benefit with Waterloo North Hydro merging as it isn't managed as well.
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#8
I agree that it is unlikely that the local utilities would be receptive to such a venture and I realize they are really well managed (especially K-W), but if it were to happen it would have nothing to do with actual efficiencies, hence the quotation marks around the words. That doesn't mean that some sort of merger won't be forced upon them even if just for the optics of looking out for "the people" and trying to keep a promise of lower hydro rates.
Everyone move to the back of the bus and we all get home faster.
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#9
I don't think the province actually has any ability to dictate mergers to utilities.

That said, theoretically you can be more effective managing a larger system than a smaller one as your management overhead will be less. But it would be a fairly small savings, and I don't really see how else this level of scaling-up would make the utilities more efficient. Surely the cost of their purchases of electricity would not drop.

As an aside, I don't know London Hydro at all but higher rates there don't necessarily mean that it's badly run. It's quite possible that they are charging higher rates in order to pay for a higher level of infrastructure repairs, maintenance or upgrades (pretty much with what happened with the hydro costs at the provincial level, the rates shot up because the original rates could not sustain the system's aging infrastructure and capital investments).
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#10
(06-28-2018, 10:10 AM)tomh009 Wrote: I don't think the province actually has any ability to dictate mergers to utilities.

That said, theoretically you can be more effective managing a larger system than a smaller one as your management overhead will be less. But it would be a fairly small savings, and I don't really see how else this level of scaling-up would make the utilities more efficient. Surely the cost of their purchases of electricity would not drop.

As an aside, I don't know London Hydro at all but higher rates there don't necessarily mean that it's badly run. It's quite possible that they are charging higher rates in order to pay for a higher level of infrastructure repairs, maintenance or upgrades (pretty much with what happened with the hydro costs at the provincial level, the rates shot up because the original rates could not sustain the system's aging infrastructure and capital investments).

Sometimes scale makes things more efficient, but not always.  I was under the impression that the Kitchener-Wilmot grid was relatively operationally distinct from the Waterloo-North grid, combining them might have some savings in some types of overhead, but internally, you're going to have to manage the same physical infrastructure distinctions.  Building the whole system together might have been more efficient, but that ship has sailed and we have the infrastructure that exists today...

And bigger systems aren't without cost as well.
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#11
One thing not yet discussed - it seems this move is in response to other recent amalgamations of local hydros. The big case is a utility called Alectra - which now fits much of York Region, Brampton, Mississauga, Hamilton, St. Catherines, and much of Simcoe County under its umbrella.
My Twitter: @KevinLMaps
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#12
(06-28-2018, 12:20 PM)KevinL Wrote: One thing not yet discussed - it seems this move is in response to other recent amalgamations of local hydros. The big case is a utility called Alectra - which now fits much of York Region, Brampton, Mississauga, Hamilton, St. Catherines, and much of Simcoe County under its umbrella.

IIRC, none of those Utilities were publicly owned. I know in fact that Hamilton (Horizon Utilities) wasn't publicly owned, as I used to live in The Hammer.

The thing I do not like about mega corps, is that they have less leniency in dealing with account holders that might be struggling. And cities lack the ability to fix major issues (like an ice storm event) when they come up.

Though it's probably OK if you've been always used to privately owned businesses like this. Your bill MIGHT go down a little, but there will be no money to the coffers for things like community centres or pools, or in Waterloo's case, RIM Park. Not that these businesses don't help, but the cities have little control on how any help is spent.

I'd have no issues with a merger if Kitchener-Wilmot hydro had been already privatized. But that's not the case.

IIRC, only Kingston and Kitchener own all of their utilities.
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#13
(06-28-2018, 12:20 PM)KevinL Wrote: One thing not yet discussed - it seems this move is in response to other recent amalgamations of local hydros. The big case is a utility called Alectra - which now fits much of York Region, Brampton, Mississauga, Hamilton, St. Catherines, and much of Simcoe County under its umbrella.

You are right but, Alectra is a private consortium.  They pay dividends to share holders,  not cities..
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#14
(06-28-2018, 01:06 PM)jeffster Wrote:
(06-28-2018, 12:20 PM)KevinL Wrote: One thing not yet discussed - it seems this move is in response to other recent amalgamations of local hydros. The big case is a utility called Alectra - which now fits much of York Region, Brampton, Mississauga, Hamilton, St. Catherines, and much of Simcoe County under its umbrella.

IIRC, none of those Utilities were publicly owned.  I know in fact that Hamilton (Horizon Utilities) wasn't publicly owned, as I used to live in The Hammer.

The thing I do not like about mega corps, is that they have less leniency in dealing with account holders that might be struggling. And cities lack the ability to fix major issues (like an ice storm event) when they come up.

Though it's probably OK if you've been always used to privately owned businesses like this. Your bill MIGHT go down a little, but there will be no money to the coffers for things like community centres or pools, or in Waterloo's case, RIM Park. Not that these businesses don't help, but the cities have little control on how any help is spent.

I'd have no issues with a merger if Kitchener-Wilmot hydro had been already privatized. But that's not the case.

IIRC, only Kingston and Kitchener own all of their utilities.

Kitchener Utilities turns over their profit to the city of Kitchener.  Another benefit we cant give up..
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#15
All it takes is one group of well lobbied politicians to sell it and then it's gone forever. Sad
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