A Memorandum of Understanding (MOU) between Thunder Bay Hydro Electricity Distribution Inc. and Kenora Hydro Electric Corporation Ltd. has been signed to authorize the exploration of a merger between the two Canadian utilities.
The two utilities will now begin a process of analyzing the potential advantages and feasibility of how their customers, municipal shareholders and other stakeholders might benefit through such a merger. This analysis will include consultation with customers and shareholders in both Kenora and Thunder Bay.
Ultimately any recommendation resulting from this analysis to merge the utilities will require the approval of both the Corporation of the City of Kenora and the Corporation of the City of Thunder Bay, who are the municipal shareholders of each company.
Kenora Hydro has 14 employees who are dedicated to the delivery of electricity to its 5,600 customers in the City of Kenora, Ontario. Thunder Bay Hydro has 130 employees who service electrical distribution to over 50,000 customers in the City of Thunder Bay.
Both Local Distribution Companies are located in Northwestern Ontario and are owned by their respective municipalities.
Dave Sinclair, President and CEO of Kenora Hydro, said:
“The current technological and regulatory environment offers both opportunities for and challenges to local electricity distribution companies that might be better addressed through an integration of resources. Our two utilities have already worked together in areas such as conservation, back office support and the acquisition of Smart Meter Technology. We share common values and have agreed on some vital common objectives as we explore the possibility of a merger.”
Robert Mace, President and CEO of Thunder Bay Hydro, said:
“A number of Ontario LDC’s are currently exploring or undertaking consolidation in order to achieve economies of scale and enhance their capability to serve customers in an industry that continues to become more complex. As this complexity continues, larger, better resourced utilities will be better positioned to effectively and efficiently meet the needs of our customers.”