By Laurie Watt

On the verge of defeating a proposed Barrie Hydro merger with York Region-based PowerStream with a likely 5-5 vote, Barrie council decided to take another week to consider the issue.

Passions were running high, with councillors split evenly on both sides. Their number was unexpectedly reduced to 10 after Ward 7 Coun. John Brassard declared a potential conflict of interest and abstained.

Brassard works for Markham, one of the two PowerStream shareholders (see related story).

Last week, Markham Mayor Frank Scarpitti stood up in a public meeting and told city council PowerStream has delivered on its promises of lower costs, increased safety and reliability, and better rates and dividends; he urged them to support the deal.

The remaining councillors spoke passionately about why the city should – or shouldn’t – approve merging Barrie Hydro, Ontario’s 11th largest local distribution company, with PowerStream.

They cited a range of benefits – such as $25 million more in dividends over the next decade (a figure that includes a $16-million lump sum), slight savings in rates, and $5 million in operating savings, primarily due to avoiding hiring and purchasing.

Ward 4 Coun. Barry Ward urged caution. Until this week, he asked questions, listened to the public and did background research. As the normally reserved councillor spoke out, his colleagues listened.

“I’m very uncomfortable that the merger isn’t in the best interests of the city,” said the third-term veteran. It’s not because I think there’s a better deal out there. I don’t think PowerStream’s a bad company and I think the projections are probably accurate,” he said.

“Barrie Hydro is neither small nor inefficient,” he said, adding as the 11th largest LDC in Ontario, the local utility is fit enough to withstand increasing regulation and pressures to lower prices and increase dividends. He added there are about 70 utilities in Ontario that are smaller – and it’s those that face more risk as stand-alone operations.

He pointed out Barrie Hydro’s operating cost per customer is lower than the provincial average, and much lower than PowerStream’s. He also questioned the amount of control Barrie would have with three seats on the proposed utility’s 13-member board.

“I don’t think we should kid ourselves,” he said. “Anyone who has ever sat on a (Simcoe) county council committee knows – they listen to you but in the end, (you don’t have) much say.

“This (merger) would send high-paying jobs out of town. We have been working to help people avoid the costly commute down Highway 400, not promote it. We’re deciding whether those (35 to 50 administration and management) jobs will be in Barrie or whether to create them 45 minutes down the road.”

Ward 5 Coun. Lynn Strachan said the merger would give Barrie millions to spend – to either help pay its $52.5-million commitment to the Royal Victoria Hospital for its cancer centre and expansion, or for other projects, such as a recreation centre or road upgrades.

“We’ll get to use that money for projects we need to get done. People contact us time and time again about the state of our streets. We would like to be a top-notch community and we need to find ways to fund these projects,” she said.

She added the stand-alone case for Barrie Hydro risks dividends. “If we don’t continue to receive dividends, we will still have to pay our commitment to the RVH and that will come out of your tax dollars and it will come out with interest.”

Councillors will debate the issue again in general committee on Sept. 22, and ratify their decision Sept. 29. A tax holiday for public-sector LDC mergers expires Oct. 17.