Scanned, recopied or Internet copy, if there are errors, please e-mail me with corrections:
Opening comments: More at the end.
Check out the, The Carolyn Parrish Enersource Facts Sheet
Mississauga News - Dec. 11, 2008 - By Joe Chin jchin@mississauga.net
City wants total control of Enersource
File photo
City councillors have voted to buy out minority partner Borealis
and take full ownership of Enersource, our hydro utility.
The City of Mississauga won't be selling Enersource.
In fact, councillors voted yesterday to buy out the 10 per cent interest minority partner Borealis owns in the hydro utility.
After mulling, for the better part of the year, over whether to sell its 90 per cent share in Enersource - and spending $440,000 on consultants' fees in the process - councillors finally shelved the idea.
In a marathon session of Council yesterday, City officials decided to buy out the 10 per cent interest in the company held by minority partner Borealis.
Councillors say Borealis holds "excessive" veto power over Mississauga's ability to manage the utility.
The decision was a rare setback for Mayor Hazel McCallion, who was on the wrong side of the vote. With the writing on the wall, she made an emotional appeal to councillors to first agree to a public meeting. If they wouldn't, she will, McCallion vowed.
"On an important issue like this I think it's so important to give all the information we can to the public. I've talked to prominent financial people in the community and their advice to me has been not to buy out Borealis," she said.
Citizen members of the Enersource board are also not in favour of buying out Borealis, said McCallion.
Yesterday's (Wednesday's) decision comes precisely three weeks before a Dec. 31 deadline for the City to exercise an option to sell Enersource to Borealis for a fixed price of approximately $391 million. Also falling by the wayside is an Oct. 17 date for a tax-free sale to other public utilities, but the Province has since extended the window for another year.
The motion to assume total ownership of Enersource was tabled by Ward 6 Councillor Carolyn Parrish, who was also the driving force behind a controversial rollback of Enersource directors' remuneration earlier this year.
Engaging the public right now, she argued, would be a waste of time since confidential information cannot be divulged, similar to what transpired at the June 26 public meeting. (Since then, councillors have sat in on seven in-camera meetings about Enersource with consultants Credit Suisse and Stikemans.)
"The time for a decision is now. There's nothing more to tell ... dragging it out another six months is futile," said Parrish.
Even if a public meeting is first held, she noted, "We can't answer you, we can't respond to you, we can't give you any numbers ... so, the next public meeting should be after we buy back 10 per cent. Then we'll have a full public meeting with our numbers and ask: What does the public want us to do?
"My idea would be to keep milking the (Enersource) cow. It's doing very well and has a guaranteed return of 7.2 per cent. Put some money in the bank and see if you can get two per cent."
Figures show Enersource has earned the City more than $68 million in dividends since 2000. The corporation is also sitting on some $154 million in interest reserves.
"This should not be a long-winded debate about buying back 10 per cent," said Ward 7 Councillor Nando Iannicca, a former Enersource director. "It's relatively simple (because) it's a great asset to own. Residents have told us that. They want us to own it. What's wrong with owning 100 per cent?
"We would be buying it from the proceeds from the entity itself," he added.
Ward 9 Councillor Pat Saito, while not against a buyback, questioned both the timing and the estimated $25-$40 million price tag, given the economic downturn.
"I just don't think the time is right. The money is not in the 2009 budget," she said.
McCallion argued that having Borealis, the investment firm of the Ontario Municipal Employees Retirement System (OMERS), on board as a partner wasn't necessarily a bad thing. OMERS, she pointed out, manages a $44 billion pension plan, and could help finance future Enersource expansion.
"Other municipalities would give their right arm to have somebody come in and invest in their hydro utilities," she said.
McCallion said she wanted a chance to re-work the partnership. Borealis has indicated it was prepared to change some of the more egregious conditions in the agreement, she said.
"I have pleaded (to be given an opportunity) to re-negotiate the agreement with Borealis, but Council wouldn't let me," she said. "Borealis has been in purgatory for the last year-and-a half."
McCallion wasn't the only one favouring a go-slow approach: members of the newly-formed MIRANET (Mississauga Residents' Associations Network) were on hand, calling for more public involvement.
"The City's handling of the Enersource issue to date has been largely through in camera discussions, with 12 corporate reports produced that have not been made public," said MIRANET spokesperson Dorothy Tomiuk. "In addition, the reports of the consultants are not public. Unless there is public disclosure, and time to understand the information, MIRANET is unable to take a position on the Enersource motion or the underlying issues."
"Deciding the future of Enersource, the City's largest public asset, is the most important strategic decision this Council can make," she added.
Home Page - Main Table of Contents - Back up a page - Back to Top
[COMMENTS BY DON B. - ]