Interim president: Hydro monetization “offside”
OPUC, Veridian and Whitby Hydro merer investigation nearing the halfway point
Ivanno Labricciosa, the interim CEO of the Oshawa Power and Utilities Corporation seen here at the utility’s open house in late June, says that a possible merger between the city-owned power provider, Whitby Hydro and Veridian is not the precursor to a sale.
By Joel Wittnebel/The Oshawa Express
In the report from the Ontario Ombudsman that declared a December meeting by the city as illegal, there is a portion that has slipped under the radar.
Slipped into Paul Dube’s report, which eventually concluded Oshawa city council broke the law by closing an education and training session with the OPUC from the public on Dec. 17, there is mention that during the OPUC’s presentation to council, the option to “monetize” a portion of the eventual merged company was discussed.
At that meeting, the merger discussions were hidden behind a non-dislosure agreement and only included Oshawa’s power utility and Veridian. Yet Dube, who had access to the audio recording of the meeting, notes the presenter explained how a portion of the merged company could be monetized.
“The partner…outlined a proposed corporate governance structure for the combined utility and presented monetization options for selling a portion of the combined utility,” Dube writes.
“He discussed the pros and cons of different types of investors (e.g. strategic partners versus financial partners) and advised that municipal shareholders would be able to maintain current dividend levels even if they decided to monetize a portion of the combined utility.”
The report also details that the idea was questioned by an unidentified city councillor.
“The councillor made several comments that, part way through, were rephrased as a question. For instance, the councillor asked whether the monetization option could be seen in Oshawa as a sale to the private sector, unless a very controlled and limited amount of OPUC was sold. The councillor said this would need to be considered going forward,” the report reads.
The Oshawa Express attempted to obtain a copy of the audio recordings of the meeting, but were informed they would not be provided as the meeting, though deemed illegal, was not public.
“The fact remains that the meeting was held in closed session which limits my ability to release confidential materials related to the meeting,” writes city clerk Sandra Kranc in an emailed response.
“If you wish to pursue this matter, I suggest submitting a Freedom of Information request.
The Express filed said request on July 22, but did not receive any response before press deadline.
Ivanno Labricciosa, the OPUC’s interim CEO, was not in attendance at the December meeting and says he knows nothing of the monetization aspect.
“My sense around anything related to the monetization, it appears to be somewhat offside,” he says.
“In terms of being able to say we don’t have a mandate to sell, in fact, that’s one of the concepts. People don’t want this thing sold.”
Since the announcement on April 29 of a possible merger between the three public utilities, there has been public outcry that the merger is merely smoke and mirrors to hide a future sale. It is something Labricciosa says is not true.
“There’s a lot of people that think this is a proxy for a sale, this is leading to a sale, or this is a sale. That can’t be further from the truth, at least in terms of the stuff I’m working on,” he says. “We’re not trying to hide anything.”
Merger nears the halfway point
Beginning with the signing of the memorandum of understanding on April 29 between the three organizations, Labricciosa says the trio has been busy investigating all aspects related to a merger, with each holding their own public information sessions to inform residents. The OPUC held its first open house at the Jubilee Pavillion on June 16.
Currently, Labricciosa says work is underway on the business case that will be presented to council, which will include costs, savings and a visualization of what a merged utility would look like.
“Ultimately, that’s kind of what’s going to end up in front of council in terms of the hard numbers, the hard facts in terms of how it looks coming together,” he says.
“We’re still trying to put together how that will appear in front of council in a public process, in terms of being able to walk people through a very deep and complex issue.”
In respect to an expected completion, the CEO says they are past the one-third mark and approaching the halfway point of the investigation.
“I think that’s a fair statement,” he says of his prediction.
“We’re far enough along that things are framing up reasonably well.”