Hydro One Inc., the owner of Hydro One Networks Inc., has applied to the Ontario Energy Board for approval to purchase all of the shares of Orillia Power Distribution Corporation for $41.3 million, consisting of a cash payment of $26.4 million and the assumption of Orillia Power Distribution Corporation’s $14.9 million debt. Hydro One Networks Inc. is asking the Ontario Energy Board to amend its distribution licence to allow Hydro One Networks Inc. to serve Orillia Power Distribution Corporation’s customers.
As part of this purchase, Orillia Power Distribution Corporation is asking the Ontario Energy Board to approve:
a) A one percent reduction in base electricity distribution rates for its current residential and general service customers for five years.
b) Transfer of its distribution system to Hydro One Networks Inc.
c) Cancellation of its distribution licence, after the transfer of the distribution system is completed.
d) Transfer of its rate order to Hydro One Networks Inc. and amending the Specific Service Charges in its transferred rate order.
For a full list of the approvals requested, please carefully review the application.
Hydro One Inc. says that ratepayers will not pay the transaction costs or any premium for this purchase and that rates for customers of Hydro One Networks Inc. and Orillia Power Distribution Corporation will remain separate until 2030. Hydro One Inc. also states that if the transaction is approved, Orillia Power Distribution Corporation’s distribution rates will increase by less than inflation in years six to ten following the closing of the transaction. Hydro One Inc. also says that customers of Orillia Power Distribution Corporation will receive a guaranteed benefit of $2.6 million as part of an earning sharing mechanism.