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Opening comments:  More at the end.

    First talk of - 2008 - of
"City councillors are considering selling Enersource Hydro Mississauga" and further more - "It's a perfect solution to our infrastructure problems," said Parrish, who believes the City should sell Enersource, bank the money and use the interest earned to pay for infrastructure."  Councillor Nando Iannicca, also want it sold, went on the record saying it has lost some $500 million of its value!

  Check out the, The Carolyn Parrish Enersource Facts Sheet.


Mississauga News - April 11, 2008 - By John Stewart, jstewart@mississauga.net

Talk of Enersource deals nothing new at City Hall

Although news that City councillors are considering selling Enersource Hydro Mississauga surprised many residents this week, potential deals to sell, buy or merge Enersource with other utilities are nothing new.

In fact, a potential merger with Powerstream - the company formed when utilities in Vaughan and Markham amalgamated - was given serious consideration by City Hall just within the past two months.

"There was a proposed merger with Powerstream, where they would have owned a slightly larger amount of the company than us - 55 per cent versus 45 per cent," said Ward 6 councillor Carolyn Parrish, a member of the Enersource board and a strong proponent of selling Enersource.

The fact that Powerstream was valued slightly higher than Enersource complicated the deal.  There were also "governance" issues about who should sit on the board of the new entity, so the proposal never came close to fruition.

As well as the dalliance with Powerstream, Enersource recently sent a letter of interest when the electrical distribution company in
London, Ontario indicated it might want to sell.  In that case, Enersource would be the buyer.

Soliciting interest in potential purchasers is exactly what Mississauga did this week when City councillors unanimously voted to hire RBC Dominion Securities to calculate the current market value of Enersource.  Following that, expressions of interest in buying the company could be officially sought.  RBC also reviewed the potential Powerstream merger.

When the potential sale of Enersource hit the front page of The Toronto Star on Thursday, the City issued a press release stressing that no decision on a sale has been made.

"It is important to recognize that this process is exploratory in nature," said Mayor Hazel McCallion, who was out of town when Council made its decision Wednesday.  "No decisions have been made and all information gathered will be brought back to Council for consideration.  It is important for Council to have an assessment of the market value of Enersource in order for Council to consider all options."

Parrish is already convinced that City Hall has to get a better return on its investment than the "$7 million or so " in revenues it has been receiving recently.  Net income was $14 million last year, down from $17.2 million the year before.

"It's a perfect solution to our infrastructure problems," said Parrish, who believes the City should sell Enersource, bank the money and use the interest earned to pay for infrastructure.

Another longtime proponent of sale is Ward 7 councillor Nando Iannicca, an Enersource board member until this year.

"My advice several years ago when deregulation was first being considered is that we sell it now when it was worth $800 million," said Iannicca.  "Council decided, in the face of enormous public opposition, not to do that."

The value is now closer to $300 million, Iannicca said.

"Let's hope we've learned from that," he added.

Two looming deadlines mean that the municipality must act quickly if it plans to sell Enersource.  After Oct. 31, if it sells the company to another electrical distribution firm (the most likely scenario), it must pay full taxes on the deal.  There is currently a tax holiday in place for such a transaction.

On Dec. 31, a so-called "put" deal, where the City can force its 10 per cent minority owner, Borealis, to buy it out for a specified price, also expires.

When the Mike Harris government deregulated utilities in 2001, it created a situation where, in order for the retail electrical companies to thrive, they had to acquire other utilities to grow.  Since then, numerous utilities have been swallowed up.

Enersource had hoped to be among those firms that swallowed up others, but that has not yet occurred.

Parrish says that, with hydro rates set by the Province, which is planning to move rates higher to reflect the real cost of power and encourage conservation, City politicians have little to gain in holding on to the company.

"If the Province gets rid of the total subsidy, hydro rates will go up $500 a household," the councillor said.  If the City still owns Enersource, it will inevitably be blamed, she said.

A blue-ribbon business panel in Toronto recently recommended that council there sell its utility and use the $300 million plus in revenue to pay for infrastructure replacement.

Today, the Canadian Taxpayers' Federation applauded Mississauga's consideration to sell.

"It is good to see Mississauga making a wise financial decision," said Ontario CTF director Kevin Gaudet.  "The sale, however, should ensure that the money generated will be protected from politicians for their pet projects."


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