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Oshawa power merger is dead

By Joel Wittnebel/The Oshawa Express

After nearly a year of deliberations, the Oshawa Power and Utilities Corporation has backed out of possible merger talks with the Whitby Hydro Commission and Veridian Corporation.

In a release shared by the OPUC on March 1, the local utility says the three CEOs have agreed that the OPUC will be “amicably withdrawing from further merger discussions,” and that Whitby and Veridian would be moving forward without their Oshawa counterparts.

“It was an informative process and one that we were pleased to participate in together with our partners,” states Ivanno Labricciosa, OPUC president and CEO in a news release.

“We conducted a thorough review of the potential merger and, for us, it was in the best interest of our customers and shareholders to withdraw at this time.”

When reached for further comment, Labricciosa says there isn’t much more to be said as the company remains bound by a confidentiality agreement set out in the original memorandum of understanding signed between the three parties.

“It’s not fair to comment on an ongoing process,” he tells The Express, noting that Whitby and Veridian remain in talks about a possible merger between the two utilities.

The process has been ongoing since April 2016, when it was announced that the trio was entering into an MOU to investigate the possibilities of joining together. The announcment followed a trend that, over the last three decades, has seen municipally-owned hydro utilities buying into the old adage of united we stand. In 1989, Ontario consisted of a patchwork of 317 different municipal utilities. By 2009, that number dropped to 220, and now sits at around 70.

In recent years, provincial literature such as the 2012 Ontario Distribution Sector Panel Review and the Advisory Council on Government Assets in 2015 pushed the benefits of utility consolidations.

After the announcement of the merger investigation, Mayor John Henry and council noted that the first time they had heard of the potential union was in a meeting prior to the announcement. However, an Ontario Ombudsman report surrounding a closed education and training session with the OPUC in December 2015 showed that, in fact, council was aware and asking questions about the merger months prior to the April announcement.

The omudsman’s report created a backlash from members of the public, who turned out at a Unifor town hall meeting this past December to talk about hydro rates, but discussion more often then not turned back to the OPUC’s potential merger and its impact on rates.

The dissatisfaction was also noted in an OPUC phone survey, the results of which were shared with council at their final meeting of 2016 attached with the power company’s third quarter report.

Of the 10,000 calls across the six municipalities affected by the merger, 2,300 were completed.

Of those, 320 were in Oshawa and nearly half of them (46 per cent) were in opposition to the merger. It was also noted that 30 per cent of respondents were not even aware of the merger.

“They’ve done the right thing,” says Gord Vickers with the Public Power Coalition, a group of local activists who were very vocal with their dissent throughout the merger process.

“It seems they’ve respected the wishes of the people of Oshawa.”

And while this process may be over, Vickers says that the organization is looking to continue to help other local municipal groups who may be facing similar mergers with their locally-owned utilities.