Councillors here may support switching hydro service providers if it saves residents money, but first they want to give current provider Hydro One a chance to respond to a recent pitch by Horizon Utilities.
Neil Freeman, Horizon’s vice-president of business development, explained to council on May 6 that the company’s impending merger with Guelph Hydro will result in lower operating costs, which means lower rates for customers.
The company wants to expand in southern Ontario, he said, including several areas in Wellington County currently served by Hydro One.
About half of Erin is located in Hydro One’s Orangeville operating area and half is located in the company’s Guelph operating area.
Freeman said that last November, based on 1,000 kilowatt hours, residents in Horizon-served areas like Hamilton and Ancaster paid $110 for the month, while Erin village residents paid $128 with Hydro One.
And commercial establishments could save even more, he added.
Based on delivery charges only, Horizon predicts monthly bills will compare as follows:
– for small commercial businesses (13,000 kWh): $127 with Horizon, as opposed to $313 in Erin village and as much as $480 in Hillsburgh with Hydro One;
– light manufacturing (40,000 kWh): $873 with Horizon, and $2,572 in Erin village and as much as $3,325 in Hillsburgh with Hydro One; and
– large manufacturing (two million kWh): $6,316 with Horizon, and $25,346 in Erin village and as much as $32,841 in Hillsburgh with Hydro One.
“On the face of things, this looks attractive,” said councillor John Brennan. But, he added, in some instances the price comparisons look “too good,” and it is only fair to offer Hydro One a chance to reply.
Councillor Ken Chapman asked when the proposed lower rates would take effect.
Freeman replied, “The effects will be felt right away.”
He added that the company has to adhere to strict regulations and if it makes too much money on the proposed rates, they may have to be lowered even more.
Mayor Rod Finnie said the rates provided by Horizon are based on mostly urban areas, and expanding to a place like Erin, which has a large rural population, means Horizon’s rates would have to go up.
Freeman admitted Horizon rates may go up slightly by acquiring rural areas, but added they would still be far lower than those of Hydro One.
Finnie then asked where Horizon would locate its maintenance personnel. Freeman replied the company would operate out of Guelph, as Hydro One currently does, and some residents could still be served by the same technician they are now.
Councillor Barb Tocher said she would like some time to research the options and also to give Hydro One a chance to reply.
When Brennan asked if Hydro One is in favour of the move, Freeman replied, “No, of course not.”
But, he explained, Horizon plans to enter into negotiations with Hydro One, and it would have more bargaining power if it had a resolution from council endorsing its proposal.
“They’re reluctant suitors, but they’ll have to come to the table, I believe,” Freeman said.
However, when asked by Finnie, Freeman admitted there are no guarantees the deal will go forward, and even if it does, negotiations could take six months to a year.
Based on the feedback from councillors, Finnie told Freeman the town will defer any resolution for the time being.
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