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BREAKING NEWS: OEB nixes deal between Orillia Power and Hydro One

Mayor Steve Clarke says 'it's not over' and says council will weigh its options
Power line

UPDATED

The Ontario Energy Board (OEB) has nixed a potential deal that would have seen the City of Orillia sell the distribution arm of Orillia Power to Hydro One as part of a large, multi-faceted deal.

“It’s a decision we weren’t expecting that’s for sure,” Orillia Mayor Steve Clarke told OrilliaMatters Thursday evening. “Yes, I was surprised.”

He said the city received the decision at about 4:30 p.m. “It’s a big document and we need to take a couple of days to review it and then come up with what the next steps might be,” said Clarke, noting he couldn’t say, at this point, why the OEB did not approve the deal.

While disappointed and surprised, the mayor said the deal might not be dead.

“From my perspective, it’s fair to say, it’s not over,” he said. “This council ran on economic development and job creation and I believe it’s a tremendous opportunity we don’t want to miss.”

He said the city will seek legal advice and counsel from experts: “We need to get educated from those in the know regarding our options.”

The city was approached by Hydro One in 2016 and agreed to sell the distribution arm of Orillia Power to the massive provincial entity for $26.35 million, which officials estimated was double its value. As part of the deal, Hydro One agreed to assume the $10 million in debt Orillia Power had amassed and said it would protect the 36 affected jobs – for one year.

As part of the pact, Hydro One agreed to purchase up to 36 acres at the Horne Business Park where, if the deal was green-lighted, it would build an integrated systems operation centre. Hydro One said two other buildings – a warehouse and regional operation centre – would be built there regardless of the outcome of negotiations.

Three city councillors – Mason Ainsworth, Rob Kloostra and Sarah Valiquette-Thompson – were not in favour of the deal.

Coun. Mason Ainsworth told OrilliaMatters tonight: “I respect the past decision of council. But as the record shows, I voted against this deal and it seems the OEB did the same.”

Kloostra said he was surprised but elated. "It's a win for the little guy," he said while on vacation in the Caribbean. "I never thought it should be sold."

Valiquette-Thompson said she was concerned by what she felt was a lack of public engagement during the process.

“It troubled me to no end the lack of public consultation on one of the biggest transactions in city history. (I was) shocked we didn’t give public more opportunity to weigh in.”

She said she is pleased the OEB has put the brakes on the plan. “I’m very happy for the people today – the people who used their voices and (I am) relieved the OEB decided with the people.”

When the city announced it had consummated this deal, many believed the OEB would simply rubber-stamp the pact. However, in August, the OEB issued a procedural order that “holds the decision in abeyance” until it rules on the Hydro One distribution rate application. “The OEB has determined that Hydro One should defend its cost allocation proposal in its distribution rate application prior to the OEB determining if the Orillia acquisition is likely to cause harm to any of its current customers,” the order stated.

Essentially, the OEB was concerned the acquisition would translate into higher costs to Orillia citizens. In its order, the OEB noted that when Hydro One acquired other utilities (such as Woodstock, Haldimand and Norfolk), there were “large distribution rate increases for some customers ... once the deferred rebasing period elapses.”


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Dave Dawson

About the Author: Dave Dawson

Dave Dawson is community editor of OrilliaMatters.com
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