Londoners hoping for big savings on their hydro bill from a possible merger by London Hydro are out of luck.
CEO Vinay Sharma spoke before the Strategic Priorities and Policy Committee Monday afternoon and admitted the potential for savings is minimal — but said they do exist.
“We have control of a very small part of the bill, so we will reduce that part, which overall is only 20 per cent. Even if I remove 10 per cent of our cost that only amounts to 2 per cent of the total bill.”
Sharma said since London Hydro is a stand-alone utility, they would only make cuts if there are benefits to both customers and shareholders.
In a letter released over the weekend, the utility revealed it was in merger talks with another entity — but has declined to reveal their identity.
News of the possible merger caught some on council by surprise, with ward 13 councillor Tanya Park saying she would have preferred council learn about the possibility sooner.
“Recognizing the fact there’s a lot of information you can’t share, to me it seems like council was brought in mid-stream. As one of the acting bodies on the shareholder group it would have been nice to know this was in contemplation some time ago.”
London Hydro is currently the 7th largest municipal utility in the province, servicing over 153,000 customers.
The utility pays a 40 per cent dividend to the City of London, their only shareholder, every year. That wouldn’t change under a possible merger. The dividend paid $10 million annually to the City for the past two years.
The province has encouraged utilities to merge in recent years by offering tax breaks.
As a result, there has been a lot of consolidation in the industry in recent years. In 1996 there were over 300 local distribution companies like London Hydro, that number had shrank to 66 by last year.
More information on the possible merger could come by the end of the year with the deal done in time for the start of 2018.