LIVE BLOG: City Council Meeting for February 15, 2017

The future of Guelph Hydro will begin to be decided at tonight’s Special City Council as Shareholder of Guelph Municipal Holdings Inc. Meeting. You can click here for the amended agenda from City Hall, and you can click here to read Politico’s preview of tonight’s meeting. For the complete blow-by-blow of tonight’s council meeting, you can follow me on Twitter, or follow along below via Storify.

Guelph City Council Meeting – February 15, 2017

The Special City Council as Shareholder of Guelph Municipal Holdings Inc. Meeting begins at 6 pm

  1. Mayor Guthrie is calling the meeting to order now.
  2. First up os the presentation from the Strategies and Options Committee. DCAO Scott Stewart is beginning.
  3. SOC is made up of Derrick Thomson, Pankaj Sardana, Bob Bell, Mark Goldberg of Innovation Guelph & Richard Puccini of Dillon Consulting.
  4. Note the absence of Derrick Thomson. He was supposed to present, and he’s on SOC…
  5. Looking forward to advocating to move forward to phase 2 and getting deep further analysis on the two options #guelph @guelphchamber https://t.co/9qtiDzCNi5

    Looking forward to advocating to move forward to phase 2 and getting deep further analysis on the two options #guelph @GuelphChamber pic.twitter.com/9qtiDzCNi5
  6. Bob Bell (the other one) is going to walk through the “Why now?” question.
  7. Got positive feedback regarding Guelph Hydro overall in public consultation. “If it ain’t broke, why fix it?”
  8. This isn’t about fixing something in the short term says Bell, it’s about positioning GHESI for the future.
  9. “This is about being proactive, not reactive,” says Bell. There’s no predetermined outcomes either.
  10. The SOC committee feels it makes sense to be ahead of the curve for options, says Bell. It’s a favourable climate, several LEC doing same
  11. High hydro prices are putting a lot of pressure across all points of the supply chain, says Bell.
  12. Energy automation though smart phones an example of the new dynamic in the energy sector.
  13. A more sophisticated business coming, not just “polls and wires” says Bell.
  14. Pressure on rates and infrastructure from self-generation too.
  15. “We’re doing this from a position of strength. A well-run, well-respected utility” says Bell. “Question isn’t to change but how and when.”
  16. Pankaj Sardana, CEO, Guelph Hydro, up next. Says there’s no conversations or negations currently on the table.
  17. “We may not be able to address all the changes in Ontario’s energy sector,” but GHESI will cont. delivering electricity safe & reliable.
  18. Full ownership = no cash outlay. “We carry on,” says Pardana.
  19. On the other hands, rates may go up and GHESI may not be able offer a wider range of services.
  20. GHESI would have to “pay quite a premium” to buy another utility. Not one of the options SOC is recommending.
  21. The positives/negatives for selling, which is one option that SOC is recommending. https://t.co/IYWy8o4wct

    The positives/negatives for selling, which is one option that SOC is recommending. pic.twitter.com/IYWy8o4wct
  22. Any transaction (i.e. not keeping things same) have to meet the “no harm test” of the Ontario Energy Board, which still has approval.
  23. Three areas focus on value for customers, value for the community, and value for the City.
  24. Sardana says they want to treat 130 films at GHESI with respect, their jobs are at stake too.
  25. Top concerns: frustration at current rates in ON, and concerns about the impact a potential transaction could have on rates.
  26. People also want to ensure Guelph Hydro’s positive track record of efficient and reliable service is preserved.
  27. A “notable segment” believed green energy development and conservation were important considerations.
  28. Stewart is back, and we're going over what's in this chart. https://t.co/BPzbRPwqVr

    Stewart is back, and we’re going over what’s in this chart. pic.twitter.com/BPzbRPwqVr
  29. Billings clarifies whether he means Qs for presentation or report. Guthrie asks for Qs on presentation, wants to get to delegates.
  30. Cllr Allt asks about the survey. Wondering about the size of the sample.
  31. 260 respondents provided “a quick read” not meat to be statistically definitive.
  32. Allt asks if any potential buyer or partner raised their head? Sardana says there’s been some “informal” conversations…
  33. “We’re playing hard to get?” asks Allt
    “We’re playing very hard to get,” says Sardana.
  34. Cllr Gibson asks how GHESI is gaging all the pressures on the system and addressing climate change?
  35. Sardana lists numerous means that GHESI is staying on top of the situation.
  36. Board of Directors puts a premium on staying on top of new developments, says (other) Bell.
  37. Gibson asks who is gauging the OEB’s effectiveness?
  38. Sardana: The OEB’s effectiveness is gauged by the province. Thinks they’ve done a good job on keeping GHESI on track.
  39. Gibson asks about the consolidation phase, what happens when a consolidated GHESI gets absorbed into larger entity.
  40. Sardana: I don’t know, but now is the time to see what’s out there.
  41. Sardana: There’s no perfect time, but SOC is asking to explore the possibility.
  42. Cllr MacKinnon asks how much of distribution cost is under our control.
  43. Sardana: That 21% is set by OEB. They set rates and scrutinize other revenue. Whole bill to customer regulated by OEB.
  44. Cllr Downer asks what it will take to retain the utility and keep pace with innovation.
  45. Sardana: We have to keep our finger on the pulse of the industry. Can’t just “kick up our heels.”
  46. We’re now going to delegations. 13 in all. First up: Janice Folk-Dawson on behalf of the Guelph and District Labour Council
  47. Folk-Dawson obviously speaks in favour of keeping GHESI publicly owned.
  48. “It serves the community interests b/c we own it,” says Folk-Dawson. That’s why they don’t gouge us while keeping the lights on.
  49. Folk-Dawson says many local businesses and family farms would be impacted. City would lose millions in dividends and investment.
  50. “The numbers just do not add up,” says Folk-Dawson. Should reject idea like Toronto. Followed by applause.
  51. Folk-Dawson does a mic drop and walks away before council gets to ask questions. She came back though.
  52. Salisbury asks about innovation being the leading edge of privatization. F-D says that a merge cost union jobs at CUPE 1 and CUPE 1000
  53. Miller says Guelph should shirk “shameful neoliberal” trends of privatization.
  54. Miller repeats Folk-Dawson point that blackouts are resolved faster by publicly owned companies than private.
  55. No Qs for Miller, @chamberadvocacy is up next, but Guthrie first asks to keep clapping to a minimum.
  56. Mwanzia takes object to Guthrie asking ppl to stop clapping before he spoke. 😉
  57. Mwanzia says energy policy is “at a critical tipping point”, and endorses report for offer “clear and analytical path forward.”
  58. Mwanzia recommends that council move forward with all 3 recommendations, and that SOC focus on cost, reliability, and competitiveness too
  59. Merging or selling is fraught with potential conflict. Selling makes us tenants and a few will benefit at expense of community, East says.
  60. East making a case for Guelph Hydro getting on the solar revolution.
  61. Guelphites “want to be authors of their own destiny” says East.
  62. Pritchard wanted to see a extra recommendation to pursue the costs of maintaining the status quo.
  63. Pritchard says sale and merger talk has to be sensible, but a lot of people in the community aren’t in favour of the idea.
  64. Donna Jennison is up next. Concerned that merger would make the new utility more attractive for privatization down the road.
  65. Jennison is listing a lot of examples of failed privatization projects in Ontario. Worse service, enormous salaries and corruption, she says
  66. “No convincing overall benefits of P3s” she adds.
  67. Next up, Steve Dyck of Guelph Solar. He’s the halfway point of the delegates.
  68. Dyck says he thinks we should stop now, even though he briefly teased with merger.
  69. Dyck, Hydro One is the worst LDC in Ontario. Not sure how we’ll get better service out of being part of bigger LDC.
  70. Dyck says “defection” is not a high risk to Hydro in the immediate future. There real concern is more usage.
  71. Heard it here first: Dyck says in four years, no more gas-powered being sold.
  72. Dyck doesn’t see a rush to merge, although he admits he’s not an expert. Merging means losing control though.
  73. Gibson asks Dyck about solar status: is it about choice or is it about defection?
  74. Dyck says there’s going to be more use, doesn’t see people getting off the grid b/c winter.
  75. Salisbury asks about Dyck’s experience, does he do public sector, or just private?
  76. Dyck says he does a lot of co-operative work for solar co-ops. Adds that selling GHESI won’t keep rates low for businesses.
  77. Gordon asks about local connections Dyck mentioned. The disruptive tech coming is local, and thus can stabilize local grid, says Dyck.
  78. Next up, Paul Costello. He’s also against privatization. More money for less efficiency, he says.
  79. Costello says “windfall” from privatizing could be used as an excuse for downloading more onto the City.
  80. Terry O’Connor not here, so we’re jumping over him for Hugh Whiteley.
  81. The count so far:
    Delegates for sale/merger: 1
    Delegates for status quo: 8
  82. Whiteley says the most important element to community is having local/public utility.
  83. Next up is Dr. Dennis Galon, looks like he might be the last delegate.
  84. Dr. Galon says size matters, but cost increases with size.
  85. Back during Horizon merger talks it was said Guelph had to merge 10x its size for the option to make sense.
  86. Size alone causes costs to increase, according to the research of Dr. Dennis Galon.
  87. 1 more: Kari Clifford on behalf of the International Brotherhood of Electrical Workers Local 636 (Unionized Employees of Guelph Hydro)
  88. Clifford here to give a face and a voice to the Hydro employees. Have given make to the community thru United Way & Cancer Society.
  89. Clifford: Where once there were 300 LDC’s there are now 70.
  90. “A strong and vital voice with a lot of important employees… I think we’re doing well as we are right now.” said Clifford
  91. Van Hellemond thanks Kari Clifford for her delegation. Gibson asks for it in writing.
  92. Taking a 10 minute break. Council’s been going for 155 minutes now…
  93. Billings wants to know where the savings are coming from if we merge?
  94. Assuming it’s w/ neighbouring utility it would be with overhead and common functions.
  95. Sardana: for a merger to be worthwhile, it would have to save a minimum of 5%. Not a specific opportunity in front us so tough 2 quantify
  96. Billings asks about GHESI reliability. Guelph is one of the top utilities.
  97. Billings is wondering about companies looking to buy, aren’t they thinking about the future too?
  98. Sardana says they’re limiting remarks to what they’re seeing today. A lot of ifs out there. GHESI premiums *might* decline in future but…
  99. Billings asks if there’s costs if council pulls the plug on these options down the line? Yes, there will be some.
  100. Billings: If we want to have control, don’t we have to be at 50% ownership? Sardana: I think that’s accurate.
  101. Thomson was in Mississauga on “official city business” says DCAO Stewart. Just in case we were wondering.
  102. Stewart: Many of the costs incurred will be in phase 2, when we get into phase 3 the costs get spread around.
  103. Billings says if people want to sell, then tonight is the night, right?
    Sardana: Yes, going down this path is very serious business.
  104. Sardana: “We don’t to go down this path with another party and for this to not be serious.”
  105. Billings: Do we have to do this right now?
    Sardana: There’s nothing to say sell or merge rgt now. Biz is solid. Future = ?
  106. Sardana: “How do we future proof this utility? Let’s do this now b/c we’ve got the time”
  107. Sardana says the challenge with our size is to keep finding savings to deliver returns.
  108. Allt asks if Guelph might be able to hold a veto in case of merger does something not within our values.
    Sardana: Could be negotiated.
  109. Allt: Is there a financial advantage to doing this now?
    Sardana: As an investor I would never recommend a deal for tax reasons.
  110. Bell (the council one) puts the motion not he floor. Seconded by Hofland.
  111. Bell says he doesn’t want to lose control of the utility, citizens seem to feel the same. Won’t support.
  112. Bell says he doesn’t think there’s a good business case, agrees with Steve Dyck that consumption will increase.
  113. In other news, Bell is “lukewarm” on merger.
  114. Bell offers an amendment to 1b: merger with neighbouring utility and 50% control maintained.
  115. Wettstein says restrictions before negotiations take you out of the market. Won’t accept amendment.
  116. Allt asks Bell if North Waterloo counts as “neighbouring”?
    Bell: “I have no desire to pursue” mergers w/o 50% share.
  117. Sardana says this limits the merger opportunities to 3: Cambridge, Halton Hills and 1 other.
  118. Stewart says the motion might be eliminating some “dance partners” before hand.
  119. But if 50% is important to council, the SOC will factor that into the discussion.
  120. Guthrie questions the difference between “local” and “neighbouring”; the SOC definition of “Local” is more expansive.
  121. Wettstein makes the point that Guelph won’t get 50% control in a three-way merger.
  122. First vote up, and amendment to get Guelph veto power in future mergers after a merger.
  123. Back to original Bell amendment, now to be separated: neighbouring and 50%.
  124. Gibson says its good that all personal opinions should be put on the table so that they can no where everyone’s at now.
  125. Salisbury has several questions about mergers (with neighbouring utilities).
  126. Any examples in Ontario where large LDC were able to address distruptive tech where smaller LDCs couldn’t? asks Salisbury.
    tl;dr: No
  127. Sardana: “I’m sure there are examples,” and they want to look at that in phase 2.
  128. Salisbury: Should that have not been a consideration of phase 1?
  129. Other Bell: SOC wouldn’t bring anything back to council without looking at all the options.
  130. Guthrie tries to steer Salisbury back to questions, and back to questions on the motion.
  131. There are a # of operation challenges we’re spending on day in and day out … some of those problems go away when you’re bigger. Sardana
  132. MacKinnon won’t be supporting. Amendment is too limiting and vague.
  133. Allt and MacKinnon agree. 50% number is too limiting, back to Wettstein reference of 3-way merger.
  134. Downer asks what happens if we take the sale part out.
  135. Sardana: That’s council’s purview if they want to approve 1, both or neither option.
  136. Gordon notes there was low level support for sale in the public feedback portion.
  137. Gordon asks on behalf of constituents: wasn’t our input valued?
  138. Staff: These are preliminary findings, and most feedback so far has been voluntary in nature, but thinks council wants a statistical balance
  139. According to Gordon, he’s heard from no one in the public in favour of selling.
  140. The engagement so far has been on decision making criteria. Haven’t heard yet from stakeholders on various options directly.
  141. Gordon suggests caution. People have taken time to bring comments forward, they want transparency.
  142. Salisbury isn’t satisfied with what he’s heard back on the benefits of merger.
  143. Salisbury got a nagging feeling that council is being pushed to accept that change is better than the status quo.
  144. Gibson says his opinion has been confirmed by the feedback he’s gotten from delegations tonight.
  145. “I can’t see a path forward where electricity use doesn’t go up.” says Gibson.
  146. Gibson says he’ll support a merger to remain competitive.
  147. Piper also notes distaste for sale, notes the motion currently stands as only merger and sale.
  148. Also one area LDC is Hydro One, which is not 100% publicly owned. Add an amendment to merge only with public utility.
  149. Piper amendent passes 10-3, publicly owned is a component of 1b.
  150. Wettstein is skeptical that sale is going to get very far, but doesn’t want to limit the possible options.
  151. Guthrie about to call the vote as amended on 1a and 1b.
  152. Things are changing, says Guthrie. Not the first time council has looked at assets and Guelph should be proud of that.
  153. Guthrie notes that the money spent investing this is almost the same as the amount spent to deal with District Energy.
  154. If it doesn’t work, I’ll be the first one to hit that no button, says Guthrie, but wants to know its the right thing.
  155. Vote on 1a: fails 5-8. Sale is off the table with only Allt, Guthrie, Hofland, MacKinnon, and Wettstein voting for.
  156. Vote on 1b passes10-3. Bell, Billings, and Salisbury vote against.
  157. Point #2 will be amended to remove the word “sale” but Wettstein feels uncertain about “doing half the job”
  158. Council votes 13-0 to remove sale from wording of point #2 a, b and c.
  159. Guthrie gets feedback on point #3 in terms of public feedback. How can we embed community feedback survey into the report?
  160. Staff: Haven’t figured out community engagement angle, but Energizing Tomorrow site will remain plus more outreach.
  161. Community knows that we’re only going the one way now, and that’s good says Guthrie.
  162. So the meeting’s adjourned. tl;dr – no sale. City looking at merger as possible change. Status quo still an option.
  163. PS: In lieu of a Facebook Live post game video, we’ll be talking about tonite’s meet on tomorrow’s @OS_Guelph.

 

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