The Ontario Energy Board gave two municipal utilities approval to merge into a new, as-yet-unnamed company.

The combination of Veridian Connections Inc. and Whitby Hydro Electric Corp., approved by the OEB on Dec. 20, will create the fourth-largest municipally owned electric distribution utility in Ontario, the companies said in a joint news release. Their parent companies, Veridian Corp. and Whitby Hydro Energy Corp., will be combined, or "amalgamated" in Ontario regulatory language, as well. (OEB Decision No. 2018-0236)

According to the order, the utilities agreed to defer rebasing of rates for 10 years after the merger is completed. They said the combination would result in operating, maintenance and administrative cost efficiencies of C$48.8 million over the 10-year deferred rate rebasing period through a lower overall cost structure.

Veridian Corp. is jointly owned by the city of Pickering, the town of Ajax, the municipality of Clarington and the city of Belleville. Whitby Hydro Energy is wholly owned by the town of Whitby.

The merger is expected to be complete in the second quarter of 2019. All the municipalities approved the transaction earlier in 2018.