Sparks flew, tempers flared and opinions were shared at a public meeting Thursday night regarding the potential sale of the distribution arm of Orillia Power to Hydro One.
That sale did not pass the ‘no-harm’ test and was denied by the Ontario Energy Board (OEB) last month. Orillia Power and Hydro One are appealing that decision.
About 70 people attended the forum at city hall that started with a half-hour power-point presentation and video from Orillia Mayor Steve Clarke that detailed background information, components of the complicated deal and what it might mean for the city.
During the public portion of what turned out to be a three-hour meeting, almost two-dozen people spoke. Several were vehemently opposed, several were staunchly in favour and some were there to ask questions and better understand the deal and the appeal process.
Long-time public power advocate Frank Kehoe spoke several times – speakers were given five minutes to speak and a second opportunity after everyone had a chance to have their say.
The former Town of Orillia alderman and Orillia Water Light and Power commissioner revisited the roots of power in Orillia and stressed he had received a legal opinion that this city council could not sell part of the utility without having a referendum.
In the final, thundering moments of his last rant, just before Clarke turned off his microphone after asking him several times to cease, Kehoe exhorted council to have a referendum.
“Why doesn’t council put it back to the people and have the people vote on the situation?” he asked, saying councillors were “circumventing” democracy. “Where do you figure that you as a council can override (the previous referenda)?”
“You’re elected to protect the people’s interest and you should damn well do that. If not, resign from council,” he said.
Following that, council had their say. Ward 1 Coun. Sarah Valiquette-Thompson said Kehoe deserved an answer to an earlier question when he asked if Hydro One had provided any guarantees it would build anything. Hydro One, pending OEB approval of the sale, has said it would build a back-up Ontario grid control centre/integrated systems operation centre (ISOC), a regional operations centre and a warehouse at the Horne Park in west Orillia.
“He wanted a guarantee (related) to the ISOC build,” said Valiquette-Thompson. “So, if the OEB does approve the deal, do we have a guarantee that they will build within a certain time frame?”
City CAO Gayle Jackson said the city has “entered into a facility implementation agreement” with Hydro One. “That did not form part of the share purchase agreement filed with OEB,” she noted. “With that there are provisions within that agreement (details of which have not been made public). It does indicate there are three builds.”
Jackson noted Hydro One has already purchased 16 acres for the ISOC building and paid about $3 million for the land. Hydro One has also completed engineering and design work and has submitted a site-plan agreement to the city.
However, they need the OEB to “fund the actual build,” she said. “They do not have that as of yet.”
Jackson said the need for a back-up ISOC has been documented by the OEB. “In terms of an absolute guarantee … no, we do not have an absolute guarantee that that building will, in fact, be built.”
If the deal is not consummated, Hydro One has an option to sell the property back to the city for market value.
Coun. Mason Ainsworth almost short-circuited, temporarily, the public portion of the forum. He alleged the power-point presentation included “false information” and asked his colleagues to support a bid to allow council to discuss that and to clarify those elements prior to questions from the public. That was not successful.
After the public forum, he reiterated those concerns. He asked who provided the information for the slides, he questioned the number of jobs that could result and he said a slide that indicated power rates “will be lower” under a deal with Hydro One contradicted other information.
Jackson replied information for the slides came from “a combination of employees from the City of Orillia and Orillia Power based on agreements in place and information in place.”
Orillia Power CEO Grant Hipgrave, who earlier had given a detailed presentation on distribution and rates, emphasized the deal with Hydro One assured a 1% decrease in rates for the first five years, increases solely tied to inflation the next five years and noted Hydro One has guaranteed that rates in Year 11 and beyond would not be above “status quo” Orillia Power rates.
“There is no way rates are going to be higher in those 10 years … and beyond,” said Hipgrave of rates under the Hydro One deal.
Clarke noted he has been careful to say “up to 300” jobs and said that number is dependent on what is actually built – something that is not set in stone.
Coun. Ted Emond, a member of the negotiating team that stickhandled the deal, said it’s impossible to quantify the actual number because there are many moving parts. He said since negotiations began in 2015, Hydro One has suggested that because their primary grid control centre in Barrie is aging, they may build their primary facility in Orillia.
He said Hydro One must get approval from its board once final decisions are made and the OEB then has to step up with the money. He said “that complexity” means there is “no ability to negotiate a guarantee.”
Emond noted the city has received a legal opinion that they do not require a referendum to sell the distribution component of the utility. He also told Kehoe that only men voted in the previous referenda – a reminder that it was a different era and a different time.
He said many want a return to that era, when Orillia had the third-lowest cost of electricity in the province. At that point, Orillia generated about 25% of its own electricity and melded that with power from the grid.
Back then, 30 years ago, Emond was mayor. He said those rates were a source of pride and attracted many industries to town.
“However, in the year 2000, the province of Ontario said, ‘Orillia, you can no longer do that. You can continue to generate electricity but you can’t use it in Orillia, you have to sell it to the province. You can continue to distribute electricity but you have to buy electricity from the province.'
“All of a sudden, our electricity rates went up. The cost of power in this province has gone up hugely,” he conceded. “But that has nothing to do with decisions made in Orillia, had nothing to do with decisions made by Hydro One. It was decisions made by the Province of Ontario to get rid of coal plants, to subsidize green energy. Remember, we’re dealing only with the distribution costs. The other decisions are far outside the control of Orillia Power and far outside control of Hydro One.”
At the end of the meeting, council voted to include an information pamphlet about the potential deal in a future mailing of Orillia Power bills to Orillia Power customers.
Greg Gee, chair of Orillia Power’s board of directors, said there is no time limit on when the OEB must rule on the appeal. There is also uncertainty over what happens after the OEB makes its decision. They could ask the city to re-file their application, for example. The city could also take the matter to divisional court.
