MISSISSAUGA, ON, June 3 /CNW Telbec/ - Privatization advocates who claim
that Enersource provides only a minimal return to its shareholders and that
its value will diminish in the future are wrong, says a report released today
by the Ontario Electricity Coalition.
"The City is clearly earning more from its continuing investment in
Enersource than it could save either by selling the company and investing
elsewhere or by foregoing new debt to pay for infrastructure improvements,"
said Ontario Electricity Coalition (OEC) spokesperson Paul Kahnert. "And, with
an uncertain future that could include further deregulation of the electricity
market, this could be worst time to sell."
Contrary to public statements made at the time that Mississauga City
Council voted to seek a valuation of the utility, 90% owned by city residents,
the former Mississauga Hydro showed an average return on equity of 7.25% and
paid the City $25 million in dividends over 2005 through to 2007.
"Those who advocate selling Enersource claim that the return on the
City's investment is only 2.3% annually," said economist Jim Stanford, who
helped prepare the OEC report. "But, if we all used their math, a company like
Research in Motion that invented the Blackberry would show a zero return for
its investors. We know that's just not true."
The OEC is working with local residents to establish a Mississauga
Electricity Coalition, which will try to raise public awareness about the
value of keeping Enersource public.
"Selling Enersource will not solve Mississauga's infrastructure problem;
at best it would only delay the problem," said Mike Balkwill, a member of the
new coalition. "But once Enersource is sold, it's gone forever. We need to
keep ownership, control and financial return in the hands of Mississauga
residents - and keep the utility accountable to us through the City."
For further information:
For further information: Paul Kahnert, (416) 407-0077