Thunder Bay city council approves proposed local hydro merger

Thunder Bay city council has given its stamp of approval to a proposed merger of two locally-owned electricity utilities in northwestern Ontario.

Thunder Bay Hydro and Kenora Hydro have been seeking a merger since 2016. At their meeting on Monday, councillors in the Lakehead agreed that the two utilities should become one.

• Thunder Bay, Kenora hydro companies explore potential merger

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The electricity-distribution landscape has become increasingly complex, according to a report presented to city councillors, and it is that landscape that has many smaller electrical utilities in Ontario consolidating.

The report noted that in the 1990's there were more than 300 locally-owned companies in the province, whereas there are about 60 now, with many having been sold to Hydro One, or amalgamated into larger local services.

Hydro officials said that the merger between Thunder Bay and Kenora hydro companies will benefit customers by ensuring lower electricity rates and that a single, larger company will be better able to invest in new technology. Local staff will remain in place in both communities for system repairs and customer service, officials said.

"The efficiencies that we're looking at generating through this merger are primarily administrative," said Robert Mace, the president and CEO of Thunder Bay Hydro. "You have two utilities with two sets of ... billing systems, two sets of financial systems, two sets of regulatory systems, so savings are going to be generated primarily through the consolidation of administrative functions."

Those job cuts will be primarily done through attrition, Mace said.

The proposed merger has already been approved by the boards of directors of Thunder Bay Hydro and Kenora Hydro. It still has to be approved by city council in Kenora. The City of Thunder Bay will own about 91 per cent of the new, merged utility.

"I can tell you that we have done substantial due diligence," Mace said. "We do know Kenora very well as a utility, we've provided services to Kenora for a number of years."

"We are confident in our ability to undertake the merger and achieve our efficiency goals," he told council.