April 2, 2013 - Norfolk County just announced it has sold Norfolk Power Inc. to Hydro One Inc. for $93 million. Norfolk Power is the county’s holding company for Norfolk Power Distribution Inc., its electricity distributor, and Norfolk Energy Inc., its telecom company.
The selection of Hydro One is the result of a comprehensive four-month competitive sale process, says the county, which involved expressions of interest or proposals from numerous potential buyers.
“I am pleased to announce that Hydro One is the successful bidder and has purchased the shares of Norfolk Power Inc. Of primary concern to Norfolk County council have been Norfolk Power employees and customers,” said mayor Dennis Travale.
“Hydro One is excited to be welcoming new customers and new employees to our company,” said Carmine Marcello, president and CEO, Hydro One Inc. (in photo). “We’re proud that Norfolk County selected our bid from the many received. We’re committed to delivering great service for Norfolk’s customers and making a valuable contribution to the local economy.”
In October 2012, council unanimously decided to commence a process for the possible sale of Norfolk Power. “Council is confident that selling the shares of Norfolk Power to Hydro One is in the best interests of everyone,” said Travale. “This isn’t just about the money we received; it’s about a partner who was interested in making a long-term investment in the community.”
The sale now must receive final approval from the Ontario Energy Board (OEB), which is expected over the summer.
“Our sale to Hydro One shows that voluntary consolidation of electric utilities can provide significant win-wins for employees, ratepayers, municipalities and the province,” added Travale.
Highlights of the deal:
• Hydro One will apply to the Ontario Energy Board to reduce the electricity distribution rate for Norfolk Power customers by 1% and freeze that rate for five years.
• All Norfolk Power employees will transfer to Hydro One after the sale and continue to have jobs.
• Hydro One will move 30 new jobs to Norfolk County over three years as it restructures its regional operations.
• Hydro One will maintain the Victoria Street office for three years and continue to use its existing facilities in Simcoe, while additional physical space needs and options are reviewed.
• Hydro One will continue to support a wide array of community events and organizations in Norfolk County.
• The total value of the deal is $93 million. Hydro One will pay Norfolk County about $66 million net after assuming Norfolk Power’s existing debt of about $27 million.
• Annual investment income from the sale proceeds will exceed the usual annual dividend the municipality has been receiving. This will help fund Norfolk County’s capital plan for community infrastructure and other needs determined by council.
• Hydro One will establish an advisory committee, including representatives of council, to monitor and provide input about customer service and other matters.
