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Guelph Hydro/Alectra merger wins city council approval

Ontario's Guelph City Council has approved the planned merger between Guelph Hydro Electric Systems Inc. and Alectra Inc., according to a Dec. 14 news release.

As part of the deal, the city will receive a 4.63% ownership interest in Alectra and a permanent seat on its board of directors. The city also would receive a special dividend of C$18.5 million from Guelph Hydro next year and C$10 million more in dividend payments over the next 20 years as a result of the merger.

The merger is expected to benefit customers in Guelph and Rockwood by preventing estimated 5% distribution rate increases in 2021 and 2026.

Alectra will invest C$5 million to renovate Guelph Hydro's current headquarters and another C$3 million a year to fund pilot projects and salaries, among others, as part of developing the new Green Energy & Technology Centre.

The Ontario Energy Board is expected to decide on the merger in fall 2018. Following the board approval, the merged company could begin operating on Jan. 1, 2019.

Alectra was formed earlier this year with the combination of Ontario municipal electric utilities Enersource Corp., Horizon Utilities Corp. and PowerStream Inc.