regional Hydro Companies to merge

On Oct. 1, a proposed merger of Kitchener-Wilmot Hydro and Waterloo North Hydro was announced by the two power utilities holding companies, Kitchener Power Corporation and Waterloo North Hydro Holding Corporation.

The announcement was followed by unanimous approval from the municipal councils of Kitchener, Waterloo, Wellesley, Wilmot and Woolwich with a memorandum of understanding to merge the two holding companies. If the province and regulatory agencies approve, the new combined utility would be the seventh-largest power utility in the province and serve over 150,000 residences and businesses.

While the merger announcement may seem sudden, Rene Gatien, CEO of Waterloo North Hydro, said they have considered the idea for several years. As with other organizations that provide service across municipal borders, the utilities work together to keep the lights on.

“Our teams have worked together for years side by side for different things because people in the community are side by side. We’re always looking for ways to provide more value to customers and to keep up with the things that are going on,” Gatien said.

Jerry Van Ooteghem, CEO of Kitchener-Wilmot Hydro, agreed with Gatien. 

“We’ve worked together on unregulated business in the past. In the early 2000s, we formed a joint company to do telecommunications work and more recently, with Grand River Energy,” Van Ooteghem said.

Serious discussion on a potential merger began over a year ago, according to Gatien. Late last year, the board of directors and shareholders of each parent company gave the go-ahead for legal requirements for the merger. Once that is complete, Gatien said they will be able to apply for permission to merge from the Ontario Energy Board. Gatien said this process could take upwards of seven months.

Grand River Energy was started in 2016 to pursue opportunities in the renewable energy sector. As regulated energy companies, Kitchener-Wilmot Hydro and Waterloo North Hydro are not permitted to offer service behind the meter—that is, they are not permitted to do electrical installation inside or around a home or business.

“You’re seeing more local generation now happening. All the solar panels that you see installed across our communities. Those are relatively new developments in our business and I think you will see more of that as well with initiatives such as reducing our carbon footprint and communities putting in their climate change action plans,” Van Ooteghem said.

With the increased adoption of smart home technology, electric vehicles and other green technology, both CEOs said there will be a need to deliver smarter, unified hydro service.

“How do you bring on all of these distributed energy resources and still manage a good, reliable, quality distribution system? By putting the two companies together, it’ll open an opportunity for better efficiencies and an opportunity to bring somebody in under the new technology realms,” Gatien said. 

Both Gatien and Van Ooteghem said that no field positions will be lost with the merger. Corporate staff reductions will be handled through planned retirements, but service should be at the same level or even better reliability. Van Ooteghem said that the combined workforce will be able to respond faster to issues across the service area.

“Service will be as good as or better than what we’re able to do today, especially if we invest in some of these new technologies that allow us to restore power more quickly. We will continue to provide the great service that both of our utilities have been providing all along,” Van Ooteghem said.

With the adoption of green technologies in residences and businesses, both CEOs said the time is right for the merger.

“This is the right thing to get our utilities ready for what our customers are going to need in the future,” Gatien said.

In an earlier and in the print version of this article, Rene Gatien was named the CEO Kitchener-Wilmot Hydro when he is, in fact, the CEO of Waterloo North Hydro. Likewise, Jerry Van Ooteghem is actually the CEO of Kitchener-Wilmot Hydro.