It had been almost a year since I attended the first “Breezy Brothers” breakfast, a now weekly town hall at Breezy Corners, and what was once a single large table of concerned citizens had now turned into three. Perhaps it was the subject matter. With all the present concern about hydro, perhaps the timing worked out that the people were eager to hear from the CEO of Guelph Hydro Pankaj Sardana on a Thursday morning.
Sardana said that hydro has entered “a time that’s best described as a period of massive change.” The City is exploring the possibility of either selling, merging, or keeping Guelph Hydro exactly the way it is. According to Sardana, they’ve already discounted the possibility of Guelph buying up other smaller utilities, as the premiums right now are rather high.
So why is Guelph Hydro restructuring now? “There are a lot of technological changes coming at us,” said Sardana. The key will be when someone figures out ways to take power generated one place and transport it to somewhere the load is needed. “If you can store it, that’s the Holy Grail,” he added. “It’s cheaper to store a kilowatt per hour than produce it.”
More important then that though is conservation. “Guelph has far exceeded its targets for conservation in this province,” Sardana said. What didn’t work so well was re-capture, the two District Energy projects that became the source of so much outrage and controversy. “Honestly, I wish we could have done that,” said Sardana who added that there just wasn’t the heat load to make it viable.
Getting into the questions from the 40 or so citizens that were in attendance, Sardana was asked about executive compensation. “No one in the management team has an employment agreement,” Sardana said. In other words, there’s no golden parachute for him if Guelph Hydro is sold. However, that’s not to say that the opportunities in selling Guelph Hydro aren’t golden…
“This is a very valuable asset for the city, but we don’t want to put numbers before the city right now,” Sardana explained. “Is there a rush to do this right now? Maybe, maybe not, but the value isn’t going away.”
That though kind of hit a raw chord to some of the people present. “As an owner of Guelph Hydro, I say we get rid of the third option,” said one man referring to the option to sell. “No one is sitting on $200 million ready to buy Guelph Hydro, it will likely be sold to an international conglomerate or the teacher’s pension fund.”
“I question the political motives of putting this on the agenda now,” said another man.
Although merger would be preferable amongst the crowd, Sardana said that there would also have to be strings attached. “A merger has to be with like-minded utilities,” he said. “We would want to partner with people who think the same way as us.”
Even finding another like-minded utility to merge with is not the only consideration for a merger. For example, would it make sense to merge with Brant or Waterloo Region Hydro? No, that’s a huge area to cover and there’s not much opportunity for consolidating services and infrastructure, where the cost savings in a merger come from. Much more lucrative for savings potential is working with other area providers on bulk buying items like software and equipment, which Guelph Hydro is presently doing.
At one point Cllr Allt stepped in to try and steer the conversation away from politics, which is not Sardana’s purview. Sardana phrased his priorities this way: “What makes sense to you when you get your monthly bill?” he asked. “Can you turn on your lights for a reasonable rate? Can we still do that in 10 years?”
“We’re a strong company, we’ve got a clean balance sheet, and we make about $5 million per year,” Sardana added.
Coming up, the initial phase of the re-structuring will come back to council in a special meeting on Wednesday February 15, and public input is still being asked for at the special website set up by the city. As for next week’s Breezy Breakfast town hall, Deputy CAOs Colleen Clack and Scott Stewart will be there, to be followed the next week by Muhammed Sayyed from the Muslim Society of Guelph.