Talks are reportedly underway that could see Horizon Utilities Enersource Corp. And PowerStream Inc. merge with Hydro One Brampton, a division of the province’s Hydro One transmission and distribution giant. The combined entity would serve roughly 960,000 customers in Mississauga, Hamilton, Brampton and Vaughan. Enersource is 90-per-cent owned by the City of Mississauga with the rest owned by the Ontario Municipal Employees Retirement System, while Powerstream and Horizon are each jointly owned by several Greater Toronto Area municipalities. All three were born from mergers between municipal hydro companies in the past 15 years.
The merger would be the first step in the partial sale of Hydro One, which the province is banking on to deliver billions of dollars needed to fund Premier Kathleen Wynne’s plan to build new transit lines. The government is also looking to float shares in the Crown corporation, starting with an initial public offering of 10 to 15 per cent and followed by subsequent sales that could reduce its stake to less than 50 per cent. Private utilities have been eyeing Hydro One for years, but only with interest in Hydro One’s municipal assets. Nobody wants to take over Hydro One’s sparsely populated rural operations which lose money. There’s also the issue of blending Hydro One rates which are higher than most municipalities. In all likelihood Horizon customers will see some sort of rate hike, if not immediately, probably later on. Offsetting this is a possible cash windfall to Hamilton similar to the cash that was paid to Hamilton when it privatized Horizon, which became the Hamilton future fund.