BARRIE, MARKHAM & VAUGHAN, ON – The Councils of the Town of Markham, the City of Barrie and the City of Vaughan have all endorsed an agreement which will merge PowerStream, an electricity distribution company jointly owned by the City of Vaughan and the Town of Markham, with Barrie Hydro, a utility owned exclusively by the City of Barrie. The decision to move forward on this utility merger has been in the works for several months.

A business case analysis conducted by KPMG on the proposed merger concluded that efficiencies realized through combining assets and achieving economies of scale would net a new merged entity annual savings in excess of $5 million. The analysis also indicated that a merger will facilitate increases in dividends paid to shareholder municipalities while helping to reduce the upward pressure on customer distribution rates.

The merger agreement, which still requires regulatory approval from the Ontario Energy Board, has the City of Vaughan and the Town of Markham respectively owning 45.3 and 34.2 percent of the merged utility with the City of Barrie having a 20.5 percent share.

The agreement also sets out a governance structure in which certain decisions will require the unanimous consent of all three shareholders. Peter Meffe, Vaughan Councillor and Chair of PowerStream’s Board of Directors, is certain it will assist the municipalities in forging a productive and
mutually beneficial partnership.

“The three municipalities have a common vision for evolving their respective local utilities through this merger into a dynamic and growth-oriented electricity distribution company unlike any other in Ontario," Meffe explained. “As a larger utility, the company will be better able to serve its customers and meet  the challenges of an ever-changing industry.”

Jon Babulic, Chief Administrative Officer at the City of Barrie, agreed with Meffe’s assessment, adding that Barrie is looking forward to working collaboratively with their municipal partners from York Region. “The City of Barrie has always encouraged Barrie Hydro to be proactive in seeking out and securing growth opportunities for the utility,” Babulic said referencing Barrie Hydro’s acquisition of four smaller electric utilities in 2000. “Merging our utility with PowerStream takes this growth strategy to the next logical step.”

Frank Scarpitti, Markham Mayor and Vice Chair of PowerStream’s Board of Directors, commended Council members of the three municipalities for recognizing the benefits each municipality will see from the merger. “Merging Barrie Hydro and PowerStream is the right deal at the right time for all three of our municipalities,” Scarpitti said. “I am confident that the shareholder benefits outlined in the business case will be achieved and in some areas even exceeded.”

Vaughan Mayor Linda Jackson is also positive about the expected benefits from the merger of Barrie Hydro and PowerStream. “Vaughan and Markham realized tremendous benefits following the 2004 merger of the three utilities which created PowerStream,” Jackson said. “It stands to reason that the three partnering municipalities in this venture will eventually experience similar benefits.”

Sandra Yeung Racco, Chair of Vaughan Holdings Inc. (one of PowerStream’s two holding companies along with Markham Enterprise Corporation), and a City of Vaughan Councillor said, “This merger is significant and may well be the largest the electricity industry has seen in recent years.” A thirteen-member board of directors will provide the required governance for the new entity following the merger. The City of Vaughan will be represented by six members on the board of directors with the Town of Markham and the City of Barrie being represented by four and three members respectively. The merger agreement also specifies that there will be one head office in Vaughan and a minimum of two operations/administration centres, one of which will be located in the City of Barrie.

There will also be no layoffs of union or management staff at either PowerStream or Barrie Hydro directly as a result of the merger. Agreements pertaining to a number of key labour issues, including job security, relocation of positions and seniority rights, were previously ratified by the two utilities and their respective unions.

Barrie Hydro is the 12th largest local electricity distribution company in Ontario, serving more than 70,000 customers in seven service areas including Barrie, Penetanguishene, Bradford West Gwillimbury, New Tecumseth, and the Township of Essa (Thornton).

PowerStream is the Province’s third largest power distribution utility with more than 240,000 customers in Aurora, Markham, Richmond Hill and Vaughan. The merger of the two utilities will create the second largest electricity distribution company in Ontario.

Media Contacts:
Barrie
Rebecca James-Reid
Director of Communications &
Intergovernmental Affairs
City of Barrie
Tel: (705) 739-4220 Ext. 4462
Email: Rjames-reid@barrie.ca

Markham
Janet Carnegie
Director, Corporate Communications
& Community Relations
Town of Markham
Tel: (905) 475-4723
Email: jcarnegie@markham.ca

Vaughan
Madeline Zito
Director of Corporate
Communications
City of Vaughan
Tel: (905) 832-8585 Ext. 8077
Email: madeline.zito@vaughan.ca