Veridian Corporation has entered into a Memorandum of Understanding to explore the potential benefits of joining utilities with Whitby Hydro Energy Corporation. Check this community hub regularly for updates and to stay involved with the process.
Both Veridian and Whitby Hydro see significant merits in the proposed merger. We are focused on delivering value to our customers and shareholders through greater efficiencies and innovation. Our best opportunity to mitigate against future rate increases is to achieve greater economies of scale, find efficiencies, and develop our competitive strength in a combined company. There are also regulatory incentives in place that encourage distributor consolidation and the pursuit of cost efficiencies that benefit ratepayers and municipal shareholders. This makes it an opportune time for our shareholders to consider a merger.
No, the business case shows that the total dividend and interest payments, and net income are expected to increase.
We believe that significant benefits can be realized for our customers, communities, employees, and other stakeholders. A combined company, through its larger size, will allow us to achieve savings for our customers and shareholders through greater efficiencies, innovations, and competitive strength. Our assessments to date show that customers will, on average, experience approximately 3% lower rates than they otherwise would have as customers of Veridian or Whitby Hydro alone. A merger is our best opportunity to mitigate against future rate increases and maintain 100% local ownership by the communities we serve.
During the development of the business case, both Whitby Hydro and Veridian provided capital plans for the next number of years. As part of the due diligence process, these plans have been reviewed by both organizations. The proposed capital plan will support the requirements of the new merged entity. Prior to the merger, both Veridian and Whitby Hydro will operate as standalone businesses and Veridian will not be required to make any investments in Whitby Hydro’s capital plan. The capital expenditure plans and forecast that Whitby Hydro has provided appears to be in line with information provided to Veridian through due diligence such as the asset condition assessment.
Whitby Hydro has two collective agreements with the Power Workers Union, both of which expire at the end of June 2019. Veridian has one collective agreement with the International Brotherhood of Electrical Workers, and it expires at the end of March 2019. Following a merger, either the unions or the employer can make an application to the Ontario Labour Relations Board for a decision on what bargaining unit or units are appropriate for the new company. The decision may require that a representation vote be carried out to permit employees to choose a bargaining agent or agents. While that process takes place, the separate collective agreements will continue to apply. Once a bargaining agent (or agents) is established for the new company, negotiation on the terms of the collective agreement (or agreements) would commence.
A comparison of the current Whitby Hydro and Veridian collective agreements was conducted by staff and its advisors as part of the merger evaluation process. It was determined that the current agreements contain similar provisions, and that the differences should not jeopardize the new company’s ability to execute the proposed business case.
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