Frequently Asked Questions
Special Committee on London Hydro's Growth Strategy
- Why is there a Special Committee reviewing London Hydro?
- What criteria will be used to evaluate whether there is a better option for London Hydro than leaving it be (status quo)?
- What are the options being considered?
- Will this affect my electricity rates?
- Can we expect the same high level of services and reliability we enjoy today?
- Will London Hydro jobs be affected?
- What will be done to ensure that London doesn’t lose another important head office?
- If London Hydro stays as it is now, what will happen?
- How can I provide my input into this decision?
- Will City Council have to approve any final recommendation?
- Will we wait longer for repairs if London Hydro becomes bigger?
Why is there a Special Committee reviewing London Hydro?
We all want London to continue to grow and compete. A strong and effective electricity distributor is crucial to attracting jobs and investment.
Ontario’s overall electricity distribution sector is changing rapidly. In less than 10 years, we’ve seen the sector consolidate from over 300 individual local distribution companies, to approximately 80. More change is expected.
In light of this, the City of London took the prudent step of initiating a due diligence process to consider how these shifting market forces could affect London Hydro. A Special Committee of London Hydro’s Board was given this mandate, and was also asked to develop recommendations for how to maximize London Hydro’s future value, quality and competitiveness.
What criteria will be used to evaluate whether there is a better option for London Hydro than leaving it be (status quo)?
Council had approved a Shareholder Declaration that sets strict criteria, and ensures that any outcome of this review process doesn’t compromise on important issues, such as:
- Low electricity rates,
- Continued local presence of London Hydro in London, by way of the main headquarters or regional headquarters locacted in London
- Fairness to employees,
- Keeping jobs in London, and
- Protecting the value of the City’s investment in London Hydro, as an asset.
What are the options being considered?
The review process will consider a number of different options, for ultimate evaluation against the criteria set out in the Shareholder Declaration:
- Status Quo: Continuing to retain the current ownership structure of London Hydro, with the City of London as 100% owner.
- Sale: Selling some or all of the equity currently held by the City of London in London Hydro.
- Merger: Combining London Hydro with other utilities to produce a combined ownership structure, or
- Acquisition: Purchasing equity interest in another utility.
Will this affect my electricity rates?
Electricity rates are provincially regulated, and must be approved by the Ontario Energy Board on behalf of the Province of Ontario.
In the long term, the way to keep electricity rates as low as possible is to maximize the efficiency and effectiveness of the local delivery agency, which in this case is London Hydro. One of the primary factors motivating the work of the Board is the desire to keep distribution rates as low as possible, while also protecting the quality and reliability of London Hydro’s services.
Can we expect the same high level of services and reliability we enjoy today?
One of the main objectives of the Board’s work is to protect and continue over time to improve the high-quality service and reliability enjoyed by London Hydro’s customers. No option will be considered that doesn’t include the prospect of same or better value of rates and services for our community.
Will London Hydro jobs be affected?
The City of London has given clear direction to the Board in the form of the shareholder declaration. This requires that:
- All London Hydro employees must be treated fairly and appropriately, and
- The main headquarters or regional headquarters must remain in London.
It is the board’s objective to present an opportunity that will not only protect our exisiting employees’ jobs now and in the future but will enhance employment opportunities with a growing London Hydro. One of our greatest assets is our employees and enhancing their opportunities and future has been an important factor in our board’s consideration from DAY ONE!
What will be done to ensure that London doesn’t lose another important head office?
The issue of retaining London Hydro as a strong London-based presence is central to the work being done by the Board. In fact, the Committee retained Professor Conklin from London’s University of Western Ontario to study this very issue, and his analysis set the value to London’s economy at around $70 million dollars over the next 5 years. Since one of the key motivating factors behind this review is to encourage future growth and economic health in London, any option that would have such a strong negative economic impact would not be considered or recommended by the Board.
If London Hydro stays as it is now, what will happen?
According to the analysis done thus far by a number of consultants, there will be a continued trend toward amalgamation, mergers and other consolidations in Ontario’s local electricity distribution sector. Very few such transactions have happened so far in Southwestern Ontario, but it’s unlikely that the status quo will be maintained. The advice of consultants including Navigant and Desjardins raises the point that there is a certain degree of risk involved in being ‘last mover’ in that scenario.
How can I provide my input into this decision?
A special meeting of the Board of Control will be held at 4:30 p.m. on Thursday, September 18, 2008, in the Theatre Room, at the London Convention Centre, 300 York Street, where Londoners will have an opportunity to comment and/or ask questions to the Board of Control regarding future options for London Hydro. You can send questions or comments on this process to viewpoint@londonhydro.com as your feedback will be gathered and incorporated into the consultation process.
Will City Council have to approve any final recommendation?
Absolutely. Before any final recommendation of the Board could be adopted, Council would have to agree and vote accordingly, and any recommended change would have to be ratified by the Ontario Energy Board.
Will we wait longer for repairs if London Hydro becomes bigger?
One of the main objectives motivating the Board’s work is to protect and continue over time to improve the high-quality service and reliability enjoyed by London Hydro’s customers. This would include our maintenance and restoration services.
