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Toronto Hydro sale postponed - Toronto Star

November 1, 2011
Paul Moloney      
Urban Affairs Reporter
Toronto Star

Members of Mayor Rob Ford’s executive committee have supported selling the city’s 43 per cent interest in the heating and cooling company Enwave Energy, while putting off a decision on selling part of Toronto Hydro.

City finance staff had recommended selling 10 per cent of Hydro, which is wholly owned by the city, but the committee decided to give councillors more time by postponing that issue until early next year.

“I just want to make sure we’re making a sound decision,” said Councillor Jaye Robinson, who urged the delay so councillors can ask questions and consult with residents.

Councillors were reminded they voted in July 2010 not to sell all or part of Hydro, which provides a steady stream of dividends totalling at least $25 million a year and expected to be $30 million in 2012.

The committee was told the city would be giving up only $3 million to $4 million in annual dividends by selling 10 per cent of Hydro.

However, opponents argued that a partial sale would bring pressure to sell more, and eventually the public utility could end up completely in private hands.

The city and pension fund OMERS jointly own Enwave, which provides steam for district heating of downtown buildings and cold deep-lake water for air conditioning.

The company, which had net income of $11.2 million last year, has been using its funds to build its network and hasn’t been paying dividends to the owners.

The company needs more investment from the partners to further expand and the city doesn’t have the money to invest, the committee was told. In fact, the asset should be sold to provide money for needed capital projects such as new streetcars.

“Our roads are falling apart, our community centre, our ice rinks, our swimming pools,” said Councillor Denzil Minnan-Wong, chair of the public works and infrastructure committee.

The city’s chief financial officer, Cam Weldon, said council can hold onto the assets but it would have to look at cutting spending or taking on more debt that would risk a credit rating downgrade, higher debt charges and property taxes.

“We believe that it’s time to cash in our investment in Enwave, and 10 per cent of our investment in Hydro, because we need the money now,” Weldon told the committee.

“We need the money to make those investments in those services the city of Toronto depends on every day, and in particular the TTC. We don’t have an option.”

However, environmentalists recoiled at the idea of selling Hydro, which runs programs encouraging customers to conserve energy.

“It makes no sense for Torontonians, for the environment or for our pocketbook,” said Franz Hartmann, executive director of the Toronto Environmental Alliance.

“Toronto Hydro is a real money earner and it’s really good at helping Torontonians save energy,” Hartmann said.

Ford, who chaired the meeting, didn’t speak to the issue in committee but told reporters there’s little choice.

“I inherited a mess from the previous administration,” he said. “And we have to look at ways of getting revenue … (selling) 10 per cent of Hydro is one of the ways.”

As originally published here:

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