Orillia Mayor Steve Clarke told OrilliaMatters this morning the city is appealing the decision of the Ontario Energy Board (OEB) that nixed a potential deal between the municipality, Orillia Power and Hydro One.
He apologized for confusion around the process.
“The city did not recently agree to appeal,” he stressed. “Council approved an agreement in 2016 to start a process of divestment of the (distribution arm of Orillia Power) and the West Ridge build-out. We are committed to follow that process.”
He said an “appeal is part of the process” and did not require or necessitate further deliberation at the council table.
When asked why this was not articulated in the days following the “surprising” April 12 decision, when the mayor told the media the city would be “exploring their options,” Clarke conceded he should have been clearer.
“What I should have said is that we are looking at where we go from here and looking into the direction we would take.”
The mayor said once the appeal is officially filed – it must be filed within 20 days of the OEB ruling (by May 2) – the appeal documents would become public and he would be able, at that point, to discuss the basis of the appeal. “Until then, I cannot say any more,” he said.
The three members of council who voted against the original deal – Mason Ainsworth, Sarah Valiquette-Thompson and Rob Kloostra – had been hoping the city would not appeal. They threw their support behind a rally in the council chambers Monday night where several citizens spoke against the deal.
The trio are frustrated the city has spent about $1 million in legal fees, to date, related to the deal. Ainsworth said “that is a huge amount of money – especially since the decision has been turned down by the OEB.”
He said an appeal would “waste” more money. “If council were, for instance, to go down the road of an appeal, how much more would that cost?” Ainsworth asked. “Usually when you appeal a decision, it costs a lot of money. Is this going to cost more millions down the road? Where do we draw that line?”
On April 12, the OEB, in a move that surprised many, rejected a potential deal that would have seen the City of Orillia sell the distribution arm of Orillia Power to Hydro One. The OEB, in a 23-page decision, said, in essence, the deal did not pass its no-harm test and would have led, over time, to higher rates for Orillia’s electricity customers.
The deal provided rate certainly for 10 years – 1% discount in each of the first five years and increases tied to inflation for the next five years. It’s important to note 20-25% of a person’s bill is related to the distribution cost; the rest is out of the local utility’s control.
The city was first approached by Hydro One in 2015 and, over time, agreed to sell the distribution arm of Orillia Power 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 that would create many jobs. The mayor has said the deal would be “transformative” for the city.
