London Hydro urged to merge

Tuesday, April 7th, 2009

Students paying for hydro should expect to see some changes over the next 12 months.

In a 70-page report made by a Toronto consulting firm, London Hydro was strongly urged to merge or acquire other utilities to avoid raising utility rates.

London Hydro currently provides electricity for the city and surrounding area, and is backed by the City of London.

As the only shareholder, the city will ultimately decide whether to buy, sell or maintain the electric company.

London Board of Control member and Deputy Mayor Tom Gosnell said London Hydro must act now to avoid future declines in revenue and service.

“We have seen other utility corporations merge, and the results are encouraging,” he said.

Other members of the board take a different stance on the issue.

“If it ain’t broke, don’t fix it,” London Controller Gina Barber urged, adding London Hydro has been both profitable and efficient in years past.

“We shouldn’t mess around with people’s access to energy.”

When asked how a merger would affect the rates of end customers, Gosnell replied it is difficult to predict. “The intent is to protect the public from rising rates, but there are risks involved.”

“[Due to inflation], rates will rise no matter what,” Barber added.

Utilities across Ontario are being bought and sold in record numbers, as the provincial government has offered a “tax window” until October 2008. Utilities who choose to conglomerate during this time will not have to pay sales taxes.

With tax incentives in place, the government aims to reduce the number of Ontario utilities from 90 to about six, Barber said.

Nancy Hutton, director of communications at London Hydro, said London Hydro is examining all the options available. “As of yet, nothing is definite,” she said.

Gosnell predicted a decision would be reached within the next six months.

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