Councillor Seeks InnPower Sale

UPDATE: One councillor, Richard Simpson, supported Mr. Daurio’s motion (below). Deputy Mayor Dollin suggested he was making the motion for ‘his friends’ at Alectra – an accusation Mr. Daurio attributes to the fact that he relied on financial figures provided by Alectra. Dollin also suggested that a $25 million charge was made to Barrie when joining Alectra – something Mr. Daurio describes as “an opportunity for Barrie to invest in the purchase of Brampton hydro and earn an additional $5m annually in interest and dividends forever!”. Daurio contends that “Alectra had promised a 14% rate reduction, and interest and dividends and other savings of $4m annually, while InnPower promised a rate increase and little/no dividends for  the next 6 years — a loss to Innisfil of $8m annually, and $48m over the next 6 years.” Under existing procedural rules, the subject will not be revisited at Council for a year.

This Wednesday, June 7, Councillor Stan Daurio is moving a motion at Innisfil Council “that the Board of InnPower be requested to explore options to sell or partner with Alectra and/or other utilities…”.

The saga of missteps at InnPower is already well known: an ill-fated attempt at joint ownership with Edmonton-owned Epcor Utilities Inc.; an overly ambitious investment in new facilities based on the assumption of leasing space to Epcor; an urgent need for alternative InnPower financing when the deal collapsed; a six year suspension of dividend payments to Innisfil; loans from the Town and Simcoe County plus an application for a rate increase to cover the cost of mandated expansion of service to newly designated urban areas.

In light of the current popular uproar over electricity rates, Councillor Daurio argues it would be more beneficial to sell our local utility to Alectra, which was formed from the merger of municipally-owned Enersource, Horizon Utilities and Powerstream plus the acquisition of Hydro One Brampton as of February of this year. Headquartered in Mississauga, Alectra’s service area encompasses 1,800 square kilometres and serves nearly a million customers in 15 communities from Alliston to St. Catharines and Hamilton to Vaughan. Alectra is now “the second largest municipally-owned electric utility by customer base in North America”.

Councillor Daurio puts the minimum value of InnPower at $40 million (2015 estimate) and expects a dividend return of 4.4 to 4.5% or $1.8 million annually. Additionally, the former Powerstream told Council in 2015 that a merger would lower electric bills in Innisfil by $23/month. This would be equivalent to savings of $4.4 million annually for 16,000 Innisfil households.  Continue reading

The Innisfil Water Wheel

The wheels continue to spin on a viable plan to bring sewer service to Innisfil Heights industrial lands. The prolonged examination of a strategy centred around the creation of a Municipal Services Corporation has come to an abrupt end.

An early staff report to Council (DSR-53-15, March 18, 2015) discussed a study from KPMG, which included an option for a Municipal Services Corporation:

“… the KPMG study concluded that the best option for the municipality was to create a municipal services corporation (MSC) and place the assets for both water and wastewater into that structure which would enable the MSC to separate the assets and liabilities from the Town’s books. The future debt capacity would vest with the new corporation consistent with the manner in which we handle the financial requirements of INNPOWER …”

“On January 1, 2016, the Town transferred the water and wastewater assets, including two water pollution control plants, one surface water treatment plant, municipal wells and the associated collection and distribution systems to InnServices [Utilities Inc.].  InnServices is also tasked with building over $200 million in new infrastructure …” [Town of Innisfil website]  Continue reading

Your Rising Hydro Bill

InnPower invited the public to a recent presentation (March 9) on the topic, “How your hydro bill is calculated” but the evening was intended to also explain why electric bills will be going up over the next 5 years. The first part of the meeting explained the different segments of a residential hydro bill: generation; transmission; distribution; and regulation/taxation. They were careful to point out that InnPower only has control over the cost of (local) distribution while the price of generation and transmission are set separately and only passed through to the consumer.

The price of electricity distribution, the part InnPower controls, affects 26% of the total bill. It’s that part of the bill that will be the subject of an InnPower application for a rate increase (2017-2021) at the Ontario Energy Board. This is a detailed and costly process, which occurs on a regular 5 year cycle that puts the operations of the local utility under a microscope. The application is a lengthy technical document, which will be open to public examination and comment.

The need for increased revenue is being driven by the need to invest in new infrastructure within Innisfil as well as the annexed lands that are now part of Barrie but continue to be within InnPower’s service area. Staff highlighted some of the necessary planned major investments such as realignment of the 20th Sideroad at Innisfil Beach Rd., Friday Harbour resort, and Lefroy residential development. Another major factor is preparation of the annexed lands for development, where Barrie is planning a future addition of 40,000 residents – rivaling the projected population of 56,000 for Innisfil in 2030. InnPower has to finance these infrastructure investments from its existing customers before it can begin to recoup the money through electric distribution to new consumers.

InnPower’s rate application, to be filed in April, will outline its expected revenue requirements beginning 2017 and for the next 5 years. A decision on this application will affect the distribution rate appearing on electric bills over that period.

Hydro Rebates – Another Door Opens

You may have heard that the Ontario Clean Energy Benefit, a credit of 10% on your monthly electricity bill, is ending on December 31. But you know what they say – when one door closes … Lower income households in Ontario can now apply for the “Ontario Electricity Support Program” (OESP), in place of the earlier benefit that applied to all residential consumers.

“The OESP will reduce the cost of your household electricity by applying a monthly credit directly to your local utility bill. The credit amount will depend on how many people live in your home and your combined household income.”

Applications are accepted online through the Ontario Energy Board website (https://ontarioelectricitysupport.ca) and by mail (forms can be downloaded). There is a special link on the web page to quickly find out if your household qualifies by entering the number of occupants and total household income. The calculator provides an estimate of the monthly credit you can receive.

A number of Innisfil residents can benefit from this program. According to the last census data (2010), about 10% of Innisfil’s population was considered to be low-income status, and about 24% of Innisfil residents ranked in the bottom third of household incomes.

Fumbling with Surveys

Like everything else, opinion surveys have moved from the paper and pencil era to the internet. Many online survey tools are available to help design and distribute electronic questionnaires and compile responses. As a retired researcher, I’m skeptical when I hear online survey sites claim that ‘anyone can do it’. It would be more accurate to say, “Anyone can do it …. poorly”. I had that impression with InnPower’s customer satisfaction survey, which closed yesterday, October 31.

I accessed the questionnaire online several weeks ago and, as I proceeded through the survey, noticed that some questions were, in my opinion, flawed – one in particular stood out. The normal practice would be to pre-test the questions internally with a small group of people to check response options and if their meaning is properly understood. You’d be amazed how many different ways people can interpret the same sentence.

My disturbing feeling was that neither the survey writer, nor the client, had much training or experience in questionnaire design. That was the first flag that prompted me to look for information about who was providing this service. A flawed question will provide flawed data that may be inaccurate, or difficult to interpret.  Continue reading

Innisfil’s Power Couple

There is ample surprise and some confusion over the announcement that Innisfil intends to sell a 50% interest in InnPower, the local electric utility, to Edmonton based Epcor. This follows quickly after the decision to create a Municipal Services Corporation indirectly owned by the town.

One letter writer (Innisfil Journal) says, “Why and what is their motive? … I was not aware that Innisfil was in dire need of cash.

Well, yes. The Town is indeed looking for ways to raise $110 million to finance Continue reading