Community Counselling & Resource Centre

Hydro One pulls out of negotiations to buy Peterborough Distribution Inc.

March 9th, 2018

Plans for Peterborough to sell its electricity distribution company to Hydro One are off.

According to the City of Peterborough, Hydro One has informed the City and City of Peterborough Holdings Inc. that it is withdrawing from negotiations regarding the sale of Peterborough Distribution Inc. (PDI).

Hydro One approached the City in 2014 to express interest in purchasing PDI. Despite overwhelming public opposition to the proposed sale, in 2016 City Council voted in favour of opening up negotiations to sell the asset.

City CAO Allan Seabrooke says negotiations were ongoing up until last week.

“PDI and City management were surprised and obviously disappointed with the decision,” he says.

They will now have to evaluate what the future holds. He notes Peterborough is equipped to deal with the changing distribution industry on its own.

“It’s been true through negotiations our Peterborough clients wouldn’t have seen any changes and we will continue to do that,” he says.

The initial offer from Hydro One, as accepted by council, was for $105 million, although the net proceeds of the sale would be between $50 and $55 million.  The offer also includes reducing distribution rates for current PDI customers by one per cent, and, if approved by the Ontario Energy Board, freezing them for five years and increasing them only at the rate of inflation in the five years following. Employees of PDI will be guaranteed employment for one year, with a service and location guarantee, and past experience will be recognized for seniority purposes.

Hydro One had planned to locate a new regional operations centre and fleet maintenance garage in Peterborough, which they project would have created 30 jobs in addition to the 70 Hydro One jobs already in City.

John Stephenson, president and CEO of PDI, says for now it's business as usual but with the state of hydro distribution changing in Ontario eventually changes will have to happen.

"A smaller utility will have difficulties," he says, adding "there's nothing today that will be alarming to how we deliver services to ratepayers in our community."

He adds he doesn't know why Hydro One pulled out of the sale, but the issues that could raise Peterborough residents' hydro rates which existed before the sale still exist and are continuing to accelerate.

Mayor Daryl Bennett is disappointed the deal fell through and says it would have been good for the community. However, he was not part of negotiations so is unsure what led to Hydro One’s decision.

Coun. Keith Riel, who was a vocal opponent to the sale and says the deal falling through is vindication for the five councillors who voted against it.

He says for PDI business should continue as usual and put this decision on the backs of citizen activists who fought against the sale.

"This is owned by the citizens of Peterborough," he says.