SOURCE: PowerStream Inc.

PowerStream

November 16, 2015 17:44 ET

PowerStream Merger Press Conference

MARKHAM, ON--(Marketwired - November 16, 2015) -

WHAT:
In advance of Markham Council's vote this Thursday night, PowerStream will hold a press conference to highlight and communicate the significant customer benefits associated with a proposal to merge PowerStream with Enersource and Horizon Utilities and to jointly acquire Hydro One Brampton.
Additional background information can be found below.

WHO:
Frank Scarpitti, Mayor of the City of Markham and PowerStream Board Vice-Chair
Maurizio Bevilacqua, Mayor of the City of Vaughan and PowerStream Board Chair
Jeff Lehman, Mayor of the City of Barrie and PowerStream Board Member
Brian Bentz, President & CEO, PowerStream

WHEN:
Tuesday, November 17, 2015 at 11:00 a.m.

WHERE:
PowerStream South Operations Centre
80 Addiscott Court, Markham, L6G 1A6

Photo/Interview Opportunities:

  • Frank Scarpitti, Mayor of the City of Markham and PowerStream Board Vice-Chair
  • Maurizio Bevilacqua, Mayor of the City of Vaughan and PowerStream Board Chair
  • Jeff Lehman, Mayor of the City of Barrie and PowerStream Board Member
  • Brian Bentz, President & CEO, PowerStream

Additional Background Information

Markham Council is currently considering a proposal to merge PowerStream with Enersource and Horizon Utilities, and to jointly acquire Hydro One Brampton. Following extensive due diligence, this proposal has already received approval from six shareholders including five municipal councils (Vaughan, Barrie, Mississauga, Hamilton, and St. Catharines) and one pension fund (Borealis -- part of OMERS Pension Fund, which has a 10% stake in Enersource). Markham Council is the final shareholder to vote on the proposed transaction at its meeting on November 19th.

Have Your Say:

Members of the public who wish to provide their support for decreasing the upward pressure on electricity distribution rates can do so on the City of Markham website at:

http://www2.markham.ca/Markham/aspc/survey/PowerStreamMerger/IF-MCP-Feedback.asp

Background:

Utility companies that have undergone mergers have historically been very successful in finding efficiencies and lowering costs, resulting in better service for all concerned. Markham's own experience with mergers has demonstrated this since 2004, with the original forming of PowerStream, and again in 2009, with the merger of PowerStream and Barrie Hydro. The latter reduced distribution costs for Markham customers by $20 per year.

The consolidated utility, if created, will serve over 900,000 customers in 18 municipalities across Ontario. Over the next 25 years, these customers will save approximately $1 billion dollars on their electricity bills directly as a result of greater efficiencies and increased effectiveness of delivering services. The utility, while still smaller than Toronto Hydro and many North American equivalents, will be better positioned to manage operations more efficiently and will be structured to deliver innovative and cost-effective energy solutions customers are demanding.

Bottom Line: The proposed merger provides PowerStream with a viable platform for growth, positions the company to be competitive and to be able to respond to an increasingly complex energy landscape, and is in the best interest of customers and shareholders.

The following financial benefits have been identified according to independent analysis conducted by Navigant Consulting1:

Customer Benefits of this Merger:

  • Savings for Markham residents and businesses average approximately $3.3 million per year in the first 10 years, and $7 million per year thereafter
  • Over 25 years, average Markham household saves approximately $24 to $30 per year or one month of distribution charges per year
  • Equal or improved service levels (merger partners will be able to support each other in emergency response times)
  • All existing service centres will be maintained

Shareholder Benefits of this Merger:

  • Maintains existing municipal ownership, just more shareholders of a larger business
  • No single controlling shareholder, just as there currently is no single controlling shareholder of PowerStream
  • Navigant estimates that the transaction will create between $52 million and $75 million of shareholder value for Markham
  • The expected return on investment for the PowerStream shareholders on the Hydro One Brampton acquisition is 7.7%

Sample Savings for Markham Commercial and Industrial Customers

  • Industrial Customer: Annual Savings of $26,000 or a 19% reduction in the distribution charges
  • Commercial Customer: Annual Savings of $8,100 or a 16% reduction in the distribution charges

1http://www2.markham.ca/markham/ccbs/indexfile/Agendas/2015/General/gc151111/20151111%20Navigant%20-%20Markham%20General%20Committee.pdf

  • Municipal, University, School and Hospital (MUSH) Sector Customer: Annual Savings of $10,300 or a 17% reduction charges

Community Benefits of this Merger:

  • Three companies based in three separate communities:
    • Utility head office in Hamilton
    • Corporate head office in Mississauga
    • Sustainability and Innovation head office in Vaughan
  • Existing operations service centres, ideally located, will continue to serve communities from: Hamilton, St. Catharines, Mississauga, Brampton, Barrie, Markham and Vaughan

Summary of Merger Specifics:

  • Affordability/Local Competiveness
    • Mitigate future rate increases - residents and businesses
  • Municipal Revenue
    • Provide enhanced utility dividend revenues to municipal shareholders to fund other community initiatives
  • Stronger Company
    • Financial Resources - more strength and resilience
    • Human Resources - better training and wider opportunities
    • Technology & Innovation - more investment in future

The Companies

PowerStream Holdings Inc. is a municipally-owned energy company providing power and related services to more than 375,000 customers primarily residing or owning a business in communities located immediately north of Toronto and in Central Ontario. It is jointly owned by the Cities of Barrie, Markham and Vaughan through their respective holding companies, Barrie Hydro Holdings Inc., Markham Enterprises Corporation and Vaughan Holdings Inc.

Enersource Corporation serves over 200,000 residential and commercial customers across Mississauga. Ninety percent of Enersource Corporation is owned by the City of Mississauga, and 10 percent is owned by BPC Energy Corporation (Borealis), which is part of the Ontario Municipal Employees Retirement System (OMERS). It is a diversified energy and technologies company that serves customers through the distribution of electricity and the delivery of services related to the design, operation and maintenance of electrical systems.

Horizon Utilities Corporation provides electricity and related utility services to over 242,000 customers in Hamilton and St. Catharines. Horizon Utilities is wholly owned by Horizon Holdings Inc., a company jointly owned by the cities of Hamilton and St. Catharines through their holding companies Hamilton Utilities Corporation and St. Catharines Hydro Inc.

Hydro One Brampton Networks Inc. has more than 150,000 residential, commercial and industrial customers and serves an area of 300 square kilometers.

PowerStream is a community-owned energy company, providing power and related services to more than 375,000 customers residing or owning a business in communities located immediately north of Toronto and in Central Ontario. It is jointly owned by the Cities of Barrie, Markham and Vaughan.

Contact Information

  • Media Contact:

    Eric Fagen
    VP, Corporate Communications
    PowerStream Inc.
    Media Line (24/7): 905-532-4400
    Email: news@PowerStream.ca