Shareholders Sign Legal Agreements to Consolidate Leading Ontario Utilities

Transaction will create province's second largest electricity distribution company

HAMILTON, ON, March 24, 2016 /CNW/ - The plan to merge three leading Greater Golden Horseshoe Area utilities and jointly purchase a fourth has taken another step forward, with the completion of legal agreements among the seven shareholders.

Enersource Corporation, Horizon Utilities Corporation and PowerStream Inc. are looking to merge and jointly purchase Hydro One Brampton Networks Inc. from the Ontario Government, effectively creating the second largest electricity distribution company in Ontario, with a service territory of approximately 1,800 km.

The legal agreements milestone was marked at a signing ceremony held at Horizon Utilities in Hamilton today. The event was attended by the Hon. Bob Chiarelli, Ontario's Energy Minister, mayors for the shareholder communities of City of Mississauga (Enersource), cities of Hamilton and St. Catharines (Horizon Utilities), cities of Barrie, Markham and Vaughan (PowerStream) and a representative for the Enersource shareholder Borealis (owned by the Ontario Municipal Employees Retirement System).

Subject to regulatory approval, the transaction will enable a new, larger company to use its collective resources to reduce upward pressure on distribution rates. It will also deliver more efficient services and innovative technologies for customers, while providing significant benefits for communities and shareholders.

In April 2015, the four utilities announced their intention to work together to become one company.

Since 1998, various provincial governments in Ontario have sought to increase efficiencies in the electricity distribution sector. The 2012 Ontario Distribution Sector Review Panel and the 2015 Premier's Advisory Committee on Government Assets made recommendations that encouraged consolidation of the province's electricity distribution sector.

The signing of legal agreements – Merger Participation Agreement (MPA) and Share Purchase Agreement (SPA) is the final step before seeking regulatory approval.

Within the coming weeks, the shareholders will submit a Mergers, Acquisitions, Amalgamations and Divestitures (MAADs) application to the Ontario Energy Board (OEB) for approval; a process estimated to take a minimum of six months.


Shareholders Finalize Legal Agreements for Consolidating Leading Ontario Utilities


On April 16, 2015, Enersource Corporation, Hydro One Brampton Networks Inc., Horizon Utilities Corporation and PowerStream Inc. announced their intention to work together to form a new utility that would serve almost a million customers in York Region, Simcoe County, Peel Region, Hamilton and St. Catharines.

A 'Legal Agreements Signing Ceremony', held at Horizon Utilities in Hamilton Thursday, completes negotiations among the shareholders of Enersource (Mississauga and Borealis), Horizon Utilities (Hamilton and St. Catharines) and PowerStream (Barrie, Markham and Vaughan). The utilities plan to jointly purchase the assets of Hydro One Brampton from the Ontario Government.

In the coming weeks, the shareholders will make an application to the Ontario Energy Board (OEB) for regulatory approval, known as a Mergers, Acquisitions, Amalgamations and Divestitures (MAADs) application.  This process will take a minimum of six months.

Legal agreements related to the transaction include a Share Purchase Agreement (SPA) for the purchase of Hydro One Brampton, and a Merger Participation Agreement (MPA) to give effect to the three-way merger.

The appointment of a President/CEO, board appointments, job function locations and other key developments will be announced in the coming months. There will be no single controlling shareholder interest in the new company, which will ensure the local interests of all communities will continue to be served.

Benefits to Customers

  • Lower distribution rates for customers over the long-term than if the status quo was maintained (Customers save $1.1 billion over 25 years).
  • Better customer service through enhanced and shared systems.
  • Broader range of products and services for customers than is currently available.
  • Enhanced customer service through the introduction of innovative technologies that a larger utility can more easily implement.

Benefits to Shareholders

  • Increased shareholder value based on net income growth between $220 million and $250 million and a steady and growing dividend stream.
  • Increased access to capital for investment in new business opportunities and to improve community economic development.
  • Stronger platform for growth due to larger geographical footprint, more diversification, greater capital resources and opportunity for expansion.
  • Greater input on energy and regulatory policy for the benefit of customers and shareholders.


Shareholders Finalize Legal Agreements for Consolidating Leading Ontario Utilities

"This is a win-win for the electricity ratepayers involved, as well as the municipalities in each of the communities. It will result in the creation of an improved company that is better positioned to serve customers, an increase in dividends for municipal shareholders and customers could benefit from downward pressure on electricity rates. I am pleased that each of the municipalities involved was able to recognize these benefits, and the value that this new company will bring to electricity consumers."
- Hon. Bob Chiarelli, Minister of Energy

"Today's agreement is an important step to creating efficiencies in hydro distribution. It will help contain costs and provide an additional dividend to participating municipalities that will be re-invested in our communities."
- Fred Eisenberger, Mayor of the City of Hamilton

"This merger is important not only for the energy sector, but more importantly, for residents and consumers. It will provide the residents of Mississauga with cost savings, new efficiencies, and improved customer service, along with safer, reliable and clean electricity. It's a smart merger that's in line with the Ontario government's commitment to better energy delivery and cost savings for consumers."
- Bonnie Crombie, Mayor of the City of Mississauga and Enersource Board Member

"This consolidation will provide the scale and combined expertise to identify and invest in new customer-facing technologies, and through the efficient use of resources and services, reduce the upward pressure on electricity distribution rates. I'm confident that these advantages, in combination with Markham's low tax rates, will continue to provide good value to taxpayers, and help fuel continued economic prosperity and employment. "
- Frank Scarpitti, Mayor of the City of Markham and PowerStream Board Vice Chair

"This merger answers the call by consumers to keep downward pressure on electricity costs. Through consolidation, we will have greater access to capital to allow us to invest in innovation, new technologies and adapt to the changing market. As partners, we are committed to increase value for taxpayers, reduce costs and provide more services to customers. This merger addresses the present challenges while creating the conditions to seize future opportunities."
- Maurizio Bevilacqua, Mayor of the City of Vaughan and PowerStream Board Chair

"This merger puts us in a position to respond to our community needs – everything from handling emergencies, to the growth of the tech sector, to micro-grids and local generation –  by virtue of its scale and ownership."
- Jeff Lehman, Mayor of the City of Barrie and PowerStream Board Member

"This is an exciting day for the City of St. Catharines. The signing of this agreement will help businesses and families in our community to save money, while improving the shareholder returns to our community."
- Walter Sendzik, Mayor of the City of St. Catharines

SOURCE NATIONAL Public Relations - Toronto

For further information: Enersource: Joanne Campea, 416.283.4296,; Horizon Utilities:John Friesen, 905.521.4908,; PowerStream: Eric Fagen, 905.532.4400,


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