Peterborough Distribution sold to Hydro One for $105 million.
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Peterborough Distribution Inc. Sale to Hydro One delivers a $105 million deal pending Ontario Energy Board approval, a 1% distribution rate cut, five-year rate freeze, job protections, and a new operations centre and fleet facility.
Inside the Issue
A $105M acquisition of PDI by Hydro One, with OEB review, rate freeze, job protections, and a new operations centre.
OEB approval required before closing.
$105M sale; 1% cut and 5-year distribution rate freeze.
Next 5 years infl.-capped; earnings sharing from year 11.
New regional operations and fleet facility in Peterborough; staff protections.
The City of Peterborough said Wednesday it has agreed to sell Peterborough Distribution Inc. to Hydro One for $105 million, amid a period when Hydro One shares fell after leadership changes.
The deal requires approval from the Ontario Energy Board before it can proceed.
According to the city, the deal includes a one per cent distribution rate reduction and a five-year freeze in distribution rates for customers, plus:
- A second five-year period with distribution rate increases limited to inflation and an earnings sharing mechanism to offset rates in year 11 and onward
- Protections for PDI employees with employees receiving employment offers to move to Hydro One
- A sale price of $105 million
- An agreement to develop a regional operations centre and new fleet maintenance facility in Peterborough
“Hydro One was unique in its ability to offer new investment and job creation in our community through the addition of a new operations centre to serve customers throughout the broader region,” Mayor Daryl Bennett said.
“We’re surrounded by Hydro One territory — in fact, we already have Hydro One customers within the City of Peterborough and new subdivisions will be in Hydro One territory. Hydro One will be able to create efficiencies by better utilizing its existing infrastructure, benefiting customers and supporting growth.”
The sale comes after months of negotiations amid investor concerns about Hydro One’s uncertainties. At one point, it looked like the sale wouldn’t go through, after it was announced that Hydro One had walked away from the bargaining table.
City council approved the sale of PDI in December 2016, despite a strong public opposition and debate over proposals to make hydro public again among some parties.
Elsewhere in Canada, political decisions around utilities have also sparked debate, as seen when Manitoba Hydro faced controversy over policy shifts.
