You are not logged in.

#1 2014-06-14 21:06:16

Registered: 2008-02-06
Posts: 416

Festival Hydro

10.2 Notice of Public Meeting - Festival Hydro … 43a72933bb

City Council will be conducting a Public Meeting on June 24, 2014 at 7:00 pm in the City Hall Auditorium for the public to provide input on options for selling, or retaining or merging Festival Hydro. There will be presentations made at the Public Meeting and opportunity for the public to provide input. A report will be available to the public after June 18 with a strategic options analysis for the possible sale, retention or merger of Festival Hydro.

You Can't Fix Stupid!



#2 2014-06-16 12:38:27

Registered: 2008-01-01
Posts: 1350

Re: Festival Hydro

Don't sell it or our hydro's guaranteed to go up.



#3 2014-06-26 13:39:37

Registered: 2008-02-06
Posts: 416

Re: Festival Hydro

Public meeting explores options for future of Festival Hydro 0   

By Mike Beitz, The Beacon Herald

Wednesday, June 25, 2014 1:52:29 EDT PM

Sell the goose or keep receiving the golden eggs?

That's the question city councillors will have to consider after a presentation Tuesday night outlining possible options on what to do with Festival Hydro.

A consultant's report, prepared in light of an unsolicited offer by Hydro One to purchase the local power distribution company, essentially narrowed the choices down to sale or status quo.

After a detailed analysis taking into account things like service quality, rate stability, value to the shareholder, strategic importance to the community, and economic factors, both options scored roughly the same, noted Deloitte's Remo Bucci.

With one qualification.

"In order for the sale to derive true value to Stratford it needs to be a very good price," he told councillors and a crowd of dozens gathered in the city hall auditorium.

Specifically, a potential buyer would have to offer a premium of at least 1.6 times the book value of Festival Hydro, which is estimated at about $37 million.

Selling it would provide the city with a significant cash infusion, but at the expense of local control of the utility, noted Bucci. Keeping it would retain that control, but forfeit some of the potential economies and efficiencies of scale associated with being purchased by a larger utility.

Andre Morin, Stratford's director of corporate services, presented his own report with figures that could be used to support either choice.

He pointed out that Festival Hydro currently generates about $2.4 million annually for the city it's sole shareholder in the form of dividends and interest.

But selling the asset, and using the proceeds for debt repayment, would reduce the city's principal and interest payments this year by a similar amount, $2.7 million.

"At the very least, if we received $30 million in cash, we would be able to recoup the amount that we're currently getting in revenue," said Morin. Those savings would shrink over time, however, as principal and interest payments are reduced.

The city could also reinvest the proceeds from the sale, he noted, or put the money toward infrastructure either reserves or unfunded projects like Market Square, more social housing, a new police station or library.

City chief administrative officer Ron Shaw, like Deloitte, boiled it down to the sell or do-nothing options.

"In the end, I think it will come down to whether you want a large and finite amount of money now, or if you want to continue to receive a significant revenue stream over an indefinite period of time," he said.

Festival Hydro CEO Ysni Semsedini made a case for the status quo, suggesting that the local utility has an excellent track record when it comes to the price stability and system reliability that the much larger Hydro One would be hard pressed to match.

"Sometimes, small cities get it right," he said.

Even though councillors were directed at the start of the public meeting not to take a position on the issue, Coun. Keith Culliton did just that Tuesday night.

"Why would we take the goose that's laying the golden eggs down there on Wellington Street and sell it?" he asked firmly. "I say never."

A number of speakers from the audience agreed, rejecting the option to sell the utility outright.

"I think things here are run exceptionally," said Ron Wood, "and I sure hope that there is not a change."

Retaining local control over Festival Hydro is worth more than the one-time cash infusion the city would receive by selling it, he suggested.

"Don't give up the seeds to get the carrots," he told council.

Mayor Dan Mathieson noted that the current council may not even be able to deal with the issue, since the so-called "lame duck" period before a municipal election when councils are prohibited from making key decisions is approaching.​

You Can't Fix Stupid!



#4 2014-06-26 13:56:26

Registered: 2009-04-30
Posts: 19

Re: Festival Hydro

As someone who has been a customer of Hydro One, I sincerely hope that the city does NOT sell Festival Hydro.  Hydro One are money sucking dogs, poor customer service and well known for outrageous billing errors.  The municipality that I used to live in saw the $$$ and sold the local hydro company, much to the regret of residents.



Board footer

Powered by PunBB
© Copyright 2002–2008 PunBB