The original evaluations were based on the merging possibility of three entities with specific valuations and data. Now that Oshawa PUC has opted to not move forward, we will need to re-model that data. We should have a refreshed timeline available shortly.
Each entity has to review and evaluate on what is best for their respective customers, shareholders and overall businesses. The evaluation process was meant to review all these elements before any formal agreement to merge was made. The review process did exactly what it was intended to do, to ensure all parties could deliver synergies to customers. For Oshawa PUC, the benefits did not align with those objectives and they choose to amicably withdraw. This type of outcome is not uncommon in merger reviews.
Business Expenses incurred to evaluate the potential merger have been fairly shared amongst the three parties and paid from retained corporate earnings. These business expenses have no impact on customer rates or planned shareholder dividends.
Yes. Both Veridian and Whitby have confirmed that they will move forward with the next phase of merger review. They both remain committed to further due diligence and consultation with the communities and broader shareholders.
For now, both are committed to continuing in the process. Both Veridian and Whitby see significant merits in the proposed merger. Our focus is on our customers and ensuring we can deliver savings through greater efficiencies and innovation. We further have confidence in the competitive strength that could be found in the combined company, due to the larger scale.
Like any merger, we need a full 360 degree view of all factors before we can move to the next step. We are currently in the final stages of assessment and will be able to provide more details shortly. Movement of the timeline by small margins is expected when there are considerable elements to be fully weighed and considered. We look forward to the next steps and remain committed to all aspects of community engagement including seeking feedback from all shareholders. All three companies involved remain optimistic about our ability to deliver synergies through our consolidation, to the benefit of our ratepayers.
Questions on Public Polling
Yes, as part of our overall communications plan we are interested to learn more about our communities and how they feel about the potential merger today. Your feedback throughout this process is important to all parties involved. We also wanted to learn how we can best communicate with all shareholders moving forward.
As much as we possibly can. We want to learn the reasons for support and the reasons for opposition. But perhaps more importantly, we want to know what you need from us in terms of information, education, and opportunities to have your voice heard. It is a two-step process and we are committed to doing it correctly.
We expect there to be some level of opposition just as there will be support or indifference. Our job will be to work with the data collected and determine if this merger is in the best interest of all of our stakeholders. Only then will we proceed to the next phase.
We will analyze the data and see what we can learn from each of our respective communities. We have an engagement plan in place, from which we hope we can learn what motivates our communities and what they view as key challenges or key opportunities. We will use the data to improve on what we communicate and how we communicate it.
Questions on Merger Approval and Process
If we are successful, we expect this merger to result in greater efficiencies overall. We expect one of the benefits to be our ability to effectively mitigate against future potential rate increases on the cost of distribution of electricity.
Synergies are essentially the overall benefits that can be found when a company merges with another. These benefits are generated through finding efficiencies in several areas such as audit, banking, insurance, maintenance programs, and consulting costs. As part of the process we will be weighing the benefits as well as the downside risks before determining a recommendation to our shareholders.
A second round of open houses will take place in the fall of 2016 and will include both open houses and a series of council meetings. The open houses are intended to provide an update to our communities and receive further feedback to incorporate into the potential plans going forward. We will announce the dates of the open houses as soon as they are available on our microsites. We encourage you to visit our dedicated microsites to stay updated on our process, upcoming open houses, and to sign up for email updates.
We will be using the same format as the first round of open house format because we would like to have one-on-one engagement that will allow for more constructive discussions. We hope that anyone who has questions or wishes to learn more about the merger joins us. Open house dates and locations will be fall 2016 and will be posted on our microsite.
This merger will only move forward with the direct consent of municipal owners, and only by demonstrating significant value to our shareholders and ratepayers. If we cannot demonstrate value, the proposed merger cannot move ahead.
Our public engagement process includes a series of activities with two objectives: (1) to educate and inform the communities we serve about the potential benefits of this merger and (2) to listen and collect feedback from the communities in order to reflect that feedback in our business planning process. Specifically, our engagement process includes open houses, council meetings, dedicated websites, email updates, mailings to ratepayers and direct one-on-one engagement between our employees and our customers.
It is our job to protect and enhance shareholder value and to ensure great service at appropriate rates to our customers. We have clear direction to only proceed if we can demonstrate significant value to all stakeholders. Every scenario will be evaluated thoroughly before any decision is made. We are all committed to openness and transparency throughout this process.
We are focused on this merger only and not investigating any type of sale. Our municipal owners have provided us a clear mandate to explore the benefits of a merger only.
Consultation and Community Engagement
Our dedicated microsite will be updated regularly with news and FAQ’s so that you have the most current, accurate information about this potential merger. In the coming months, we will be mailing out information and hosting more open houses.
Consultation is critical to the entire process- consultation with residents, politicians and employees. All of the feedback gathered will be taken into consideration and ultimately, will only proceed if we can demonstrate benefits to all of our stakeholders. There are avenues today for Oshawa residents to learn more, ask questions and express their views. Those avenues include open houses, dedicated microsites, and questions to local councillors.
Our shareholders have been apprised that we wish to explore the potential benefits of potential merger. They have not been involved to a greater degree than that at this point. For this merger to proceed, we require direct consent from municipal owners.
Yes. Just like everyone in this process, we want to have open and transparent dialogue. We notified the unions at the same time that we notified the employees and the general public.
We specifically selected this format because our experience has shown us that people are more interactive and engaged when there is one-on-one interaction. During the course of our 1st open house, we were able to have one-on-one discussions with members of our community that we might otherwise not have been able to do in a different setting. We were able to hear their comments and questions and provide the best information that we had available. Should anyone in our community feel that their voices were not heard, we would be more than happy to hold a one-on-one meeting with you and our experts to ensure your questions are addressed. We know that once we have more concrete information available, this format will be much more valuable and helpful to you.
The MOU has already been posted. Communications is central to this process and we want to be as open and transparent as we can be with our customers. A copy of the MOU can be found here: http://bit.ly/2aPXOWQ
The MOU, which is posted on this site, outlines the processes and that timing. Details of public session will be posted on the website and through other means.
Each of the utilities have already held at minimum one open house in their communities. This was the first step in our consultation and we are now scheduling our next round for the fall 2016. We will be uploading our microsites so that you are aware early on when open houses are scheduled.
Please utilize this website to convey your concerns, questions or comments and we will be sure to address it. As the process unfolds, there will be a more formal feedback process in place. Until then, this website can accept your questions. Our social media platforms are another avenue to express your thoughts to us.
Our mandate is to focus solely on this potential merger between Veridian Corporation, Oshawa Power and Utilities Corporation and Whitby Hydro Energy Corporation and to identify the benefits that can be realized should a merger be successful. There are no discussions of any sale, nor is a sale being contemplated. We are focused on the potential merger before us, the partners involved and the process that is underway. We feel that this is the best way forward to provide benefits to all stakeholders.
Timeline and Process Questions
The MOU, which is public on our website, outlines our timelines. Should the parties find that there are significant benefits to the merger, subject to various approvals, the parties will make efforts to complete the transaction by or on January 1, 2018.
We are not currently pursuing a sale of our company because we have explicit direction from our shareholders that they would like to maintain municipal ownership.
We are still conducting our due diligence to see if there are definite benefits to merging. We expect it may take the remainder of this year to develop a clear picture and make recommendations to our respective shareholders.
It is important to clearly outline the municipal ownership structure should this merger be successful. The new merged company would have 6 shareholders including Pickering, Whitby, Oshawa, Ajax, Clarington and Belleville. It would also be 100% municipally owned and not subject to transfer tax. This is a potential merger of three leading utilities, not a sale.
Questions on Employment
We are focused on assessing the potential benefits of potential merger and weighing all options. We have no information at this time about the impact to jobs. We will be looking to natural attrition and savings in our internal systems to make up the bulk of the synergy savings. Additionally, we will be looking at opportunities to expand the new business opportunities of the new organization. In past potential mergers, Veridian has a track record of very fair treatment for all employees and many employees have taken advantage of new opportunities through the years.
Employees, like our community members, will stay informed via this microsite, open houses and through our internal communication channels—memos, status updates, bulletin updates. Our employees are at the heart of our organizations and we are committed to keeping them apprised throughout this process.
Questions & Comments Related to Structure of New Proposed Entity
There have not been discussions on this matter.
It will continue to be a profitable asset owned 100% by the municipalities that currently own the three utilities.
There have been no discussions on this topic. Our priority is to ensure that there will be benefits for all stakeholders.
The three companies exploring the option to merge are neighbours with similar philosophies for corporate social responsibility, employee safety, a focus on customers and the provision of value to shareholders. The three companies cover a rapidly growing area east of Toronto and effective growth of this area would be greatly assisted by a merger of our businesses.
At this stage, we are reviewing the benefits and feasibility of a merger. Once we move along in this process, important details like head offices and locations will be reviewed and communicated to everyone.
While no decisions have been made yet, the intention is to have a physical location in both Whitby and Oshawa.
Questions Related to Rates and Other Costs
The potential merger is going to allow us to become a larger, more efficient company. As a result, we will be able to identify efficiencies to the benefit of our customers. As the new company will be municipally owned, dividends will continue to flow to the new shareholder-municipalities.
The incentives come in the form of cost savings that we can then pass on to you, our ratepayer.
Because we are in preliminary stages, we do not have an answer related to cost. What we do know is that this potential merger is a win-win for customers and shareholders. We are using our internal resources to the best of our ability, but will also need to prudently secure external expertise and support from time to time.
At this stage, we simply cannot put a value on a merged entity at this point. However, what we can tell you is that we view this as a winning scenario for all stakeholders, including ratepayers as we work to reduce or mitigate against future increases to your electricity bill.
There is no change to the businesses at this time, and no change to your relationship with your local utility.
We are exploring the potential benefits including assessment of how a merged energy company would impact consumers. One of our key goals is to ensure that we provide the same or better service to our customers while mitigating against potential increases to rates. We will be providing updates on our progress as we move along in the process.
Any debt accrued by the independent utilities will be absorbed into the new merged entity. Debt has been included in the respective financial valuations of each company to ensure fair and equitable treatment of each utility.
We are still conducting our due diligence to understand what investments may be required in order to achieve positive benefits for all three companies, their customers and their shareholders.
A key objective of this merger is to strengthen our ability to deliver cost-effective, reliable energy services to the communities and to the municipalities.
At this time, we believe that benefits can be realized for our communities, employees, stakeholders and province. As we develop the business case, we will be able to communicate exactly what those benefits will be.
If the potential merger makes sense, we are confident that we would be able to demonstrate to the public, our shareholders and to the regulator how this would benefit all involved.
Everything is remaining the same for the moment. Our commitment is to ensure value for our shareholders, provide excellent customer service for our ratepayers and to mitigate against future rate increases. That commitment will not change.
We will provide several opportunities for the community to provide input and ask questions. This microsite is one avenue where you can submit your questions. We will keep the site updated with your questions and responses on a regular basis. We will also be hosting more open houses to provide updated information about the process, timelines and next steps.
No. The two are not related. There is however a broader trend happening of local municipal energy companies looking at options to ensure they maximize shareholder value and ensure their long-term viability.
Pickering, Whitby, Oshawa, Ajax, Clarington, and Belleville would continue to own the merged entity.
First, we require from the approval boards of directors of our three companies, after which approval of our shareholder municipalities would be sought. We would then submit a MAADS (Mergers Acquisitions, Amalgamations and Divestitures) application to the Ontario Energy Board for regulatory review and approval.
Questions on External Support
As we move through this process, it only makes good business sense to bring experts on board who can help guide us. Through a competitive process, each respective utility identified experienced consultants that could deliver sound advice as we moved through the process. Their mandate is to find and communicate the benefits of this potential merger to all of our communities when that information is available. They are a valuable asset to this process and their expertise will ensure that our communities receive transparent, timely and accurate information on this potential merger.
General Merger Questions and Comments
To stay competitive, we must always be looking for new opportunities. This is true today and it was true 50 years ago. There was no particular driver but the province has created policy that encourages the market to find synergies and economies of scale amongst logical groupings of LDCs and that is exactly we are trying to do. Our view is that it is important to always look for ways to improve our position and that if we stand still, our future could be dictated for us by outside market and regulatory forces. We would rather control our own destiny and provide more benefits to our stakeholders in the process.
This is a potential merger of three leading utilities. Through this exploratory phase, we plan to identify and communicate the possible benefits before proceeding any further. Should those benefits be found to be in the best interest of the ratepayer and our other stakeholders, we will proceed to the next step. It is important to reiterate that if this merger is successful, it will remain 100% municipally owned, with significant influence for all of the shareholders.
We encourage concerned or interested residents to participate in the consultation to hear the information, facts, background and rationale before arriving at this conclusion. It is important to reiterate that the asset is not being sold to a private enterprise. The three utilities will consolidate to be one entity and they will continue to be owned by the municipalities of Ajax, Belleville, Clarington, Oshawa, Pickering and Whitby.
There are many factors at play including the disruption in the industry which requires us to evolve if we are to remain competitive. Additionally, our customers’ behaviours and opportunities are changing and we must find ways to continue to offer stable and affordable rates combined with greater efficiency and more valuable service offerings. There has already been success demonstrated from other potential mergers from an overall improvement standpoint.
All three utilities have strong track records when it comes to customer service, reliability, financial stability, partnerships and much more. Should a consolidation be successful, we expect this level of service to not only continue, but to improve over time.
The recently announced amalgamation proposal involving PowerStream, Horizon, Enersource and Hydro One Brampton is currently before the Ontario Energy Board for approval. Prior to this announcement there have been many successful potential mergers this decade, including those that formed Veridian, but momentum is increasing as all utilities look to ensure their long-term sustainability to provide benefits to their customers and their shareholders.
We are looking at all options to ensure long-term sustainability of our utility. It is our job to protect and enhance shareholder value and to ensure great service at appropriate rates to our customers. Potential merger is one option that might help achieve these goals so we will fully explore its potential.
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