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Frequently Asked Questions

Latest Questions

Why is this happening?

Both Veridian and Whitby see significant merits in the proposed merger. We are focused on delivering value to our customers and shareholders through greater efficiencies and innovation. Our best opportunity to mitigate against future rate increases is to achieve greater economies of scale, find efficiencies, and develop our competitive strength in a combined company. There are also regulatory incentives in place that encourage distributor consolidation and the pursuit of cost efficiencies that benefit ratepayers and municipal shareholders. This makes it an opportune time for our shareholders to consider a merger.

What are the potential advantages and disadvantages to customers?

We believe that significant benefits can be realized for our customers, communities, employees, and other stakeholders. A combined company, through its larger size, will allow us to achieve savings for our customers and shareholders through greater efficiencies, innovations, and competitive strength. Our assessments to date show that customers will, on average, experience approximately 3% lower rates than they otherwise would have as customers of Veridian or Whitby Hydro alone. A merger is our best opportunity to mitigate against future rate increases and maintain 100% local ownership by the communities we serve.

Will Hydro rates go down because of the savings of the merger?

A key objective of this potential merger is to strengthen our ability to deliver cost-effective, reliable energy services to the communities and the municipalities we serve. Our assessments to date show that, on average, customers of the merged company will experience approximately 3% lower rates than they otherwise would have as customers of Veridian or Whitby Hydro alone. Merging is also our best opportunity to mitigate against future rate increases as we can achieve greater economies of scale, find efficiencies, and develop competitive strength in a combined company.

What is the timeline for a potential merger?

Both Veridian and Whitby Hydro Boards of Directors have agreed that a merger would provide benefits to customers and shareholders and are recommending shareholders approve the proposed merger. Veridian and Whitby Hydro will seek the approval of the municipal councils in early 2018. Subject to those municipal shareholder approvals, an application would then be submitted to the Ontario Energy Board for regulatory review and approval. If approved, we anticipate completing the transaction by late 2018 or early 2019.

Specifically, how will savings and efficiencies be achieved through this merger?

When one company merges with another there are synergies, or overall benefits, generated through finding efficiencies in several areas. We expect cost savings in this merger to arise through natural staff attrition, as well by eliminating duplication of external administrative services, such as legal, auditing, banking and consulting services. We also expect to see cost reductions through the consolidation of key operational systems, such as customer information systems and IT networks. We also believe that a review and adoption of each utility’s best practices will achieve additional savings within a new company.

Questions on Merger Approval and Process

When was the Memorandum of Understanding (MOU) executed and will it be made publicly available?

The MOU was executed as of July 17th, 2017 between Veridian Corporation and Whitby Hydro. The MOU has already been publicly posted. Communications is central to this process and we want to be as open and transparent as we can be with our customers. A copy of the MOU can be found here.

How can we be confident that this is not a sale disguised as a merger?

We are focused on this merger only and are not investigating any type of sale. We believe that significant benefits can be realized from a merger for our customers, communities, employees, and other stakeholders.

How do we know that our best interests are being looked after?

We had clear direction to only proceed if we could demonstrate significant value to all stakeholders. We completed a thorough review process to evaluate the benefits and risks of a potential merger. Based upon that review, both of our Boards of Directors have agreed that a merger would provide benefits to customers and shareholders and are recommending our municipal shareholders approve the proposed merger. From here, a merger will only move forward with the direct consent of municipal owners and the regulatory approval of the Ontario Energy Board (OEB). Additionally, any OEB application will be subject to a “no harm” test, which ensures the proposed merger will not have an adverse effect on price and quality of service to customers, among other factors.

What will be the biggest benefit?

If the merger proceeds, we expect it will result in greater efficiencies overall. We expect one of the significant benefits to be our ability to effectively mitigate against future potential rate increases on the cost of distribution of electricity. An increased scale of operations will also enable the merged company to expand and improve services for customers.

Under which conditions will this merger be approved?

A merger will only move forward with the direct consent of municipal owners and the regulatory approval of the Ontario Energy Board (OEB). Additionally, any OEB application will be subject to a “no harm” test, which ensures the proposed merger will not have an adverse effect on price and quality of service to customers, among other factors.

Who is required to approve this proposal?

Both the Veridian and Whitby Hydro Boards of Directors have agreed that a merger will provide benefits to our customers and other stakeholders and are recommending shareholder approvals. We will now seek the approval of our shareholder municipalities in the coming weeks, after which we would submit a MAADS (Mergers, Acquisitions, Amalgamations and Divestitures) application to the Ontario Energy Board for regulatory review and approval. We anticipate completing the transaction by late 2018 or early 2019.

What exactly does “synergies” mean?

Synergies are essentially the overall benefits that can be found when a company merges with another. These benefits are generated through finding efficiencies in several areas such as human resources, auditing, banking, insurance, maintenance programs and consulting costs. As part of the process we weighed the benefits as well as the downside risks before making a recommendation to our shareholders.

Consultation and Community Engagement

What is your public engagement process?

Our public engagement process is intended to educate and inform the communities we serve about the potential benefits of this merger and to collect feedback from these communities to help inform our business planning process. We have provided several opportunities for communities to provide input and ask questions to date and continue to welcome feedback. The timely sharing of information through our dedicated websites is central to the process. The presentations we expect to make to municipal council shareholders in early 2018 will also provide opportunity for further community input.

When will the communities have a chance to comment?

We have provided several opportunities for communities to provide input and ask questions to date and continue to welcome feedback. This microsite is one avenue where you can submit your questions. We will keep the site updated with frequently asked questions and responses on a regular basis. We also expect to make presentations to our municipal council shareholders, where there will be debate and opportunity for further community input.

Where do I get the most current information about the merger?

This dedicated microsite is will be updated regularly with news and FAQs so that you have the most current, accurate information about this potential merger. You can sign up to receive an email alert whenever this website gets updated with new information here.

What if there is significant community upset over the merger? Could the merger be potentially stopped?

Following a thorough review process, both of our Boards of Directors have agreed that a merger would provide benefits to customers and shareholders and are recommending our municipal shareholders approve the proposed merger. From here, we will seek the approval of our shareholder municipalities through public presentations, followed by an application to the Ontario Energy Board for regulatory review and approval. Both of these next steps will provide opportunity for further community input.

Questions on Employment

How will you keep employees informed?

Employees, like our community members, will stay informed via this microsite, and through our internal communication channels—memos, status updates and bulletin updates. Our employees are at the heart of our organizations and we are committed to keeping them apprised throughout this process.

Will there be layoffs as a result of the merger? How many jobs will be lost or gained?

We are looking to natural attrition and savings in our internal systems to make up the bulk of the synergy savings. Additionally, we will look at how to expand the new business opportunities of the new organization. In past mergers, Veridian has a strong track record of very fair treatment for all employees and many of them have taken advantage of new opportunities through the years.

How will retirees be impacted by the merger?

Both merger partners participate in the OMERS pension plan, as will the merged entity. The merger will have no impact on the pensions of current retirees of Whitby Hydro and Veridian. It is also anticipated that there will be no negative impact on supplemental benefits in place for those already retired at the time of the merger.

Questions & Comments Related to Structure of New Proposed Entity

What will be the impact on the current office locations of the two companies?

While no decisions have been made yet, it is expected that all current office and operations centre locations will be maintained. There would, of course, likely be changes in the business functions carried out at specific locations.

Where will the new head office be located?

Decisions on the locations of the business functions of the merged entity have not yet been made. This will be dependent on a thorough integration planning process. However, for the foreseeable future there will be a continued significant presence in the current service areas of both merger partners. There are no plans to eliminate either of the current head office facilities of Whitby Hydro or Veridian. The two locations are necessary as neither facility is large enough to consolidate all staff members of the merged company.

What will be the corporate name and branding of the merged utility?

There have been no discussions on this topic. Our priority is to ensure that there will be benefits for all stakeholders.

Who will be the new CEO of the company?

Decisions about leadership of the new company will take place later in the process. We know that an effective and clear leadership model is critical to the long-term success of a combined company. One of our goals for the early years is ensuring strong connectivity with our communities and including municipal representatives as part of a new Board of Directors structure. 

Questions Related to Rates and Other Costs

How will a merger impact customers’ bills?

We have explored the potential benefits of a merger, including assessment of how a merged energy company would impact consumers. One of our key goals is to ensure that we provide the same or better service to our customers while mitigating against potential increases to rates. Our assessments to date show that, on average, customers of the merged company will experience approximately 3% lower rates than they otherwise would have as customers of Veridian or Whitby Hydro alone. A combined company will also allow greater efficiencies and competitive strength that will help mitigate future rate increases.

Who will bill me now?

There is no change to the businesses at this time, and no change to your relationship with your local utility.

What about the money spent on the merger review?

Business expenses incurred to evaluate the potential merger will be fairly shared between the two parties and paid from retained corporate earnings. These business expenses have no impact on customer rates or planned shareholder dividends.

What is the value of this merger?

We have completed a thorough review of the proposed merger, which confirms a winning scenario for all stakeholders, including ratepayers.  We expect to pass savings onto to our customers, with an average rate savings of 3% relative to the status quo. Municipal shareholders will receive increased and more sustainable dividends due to the increased scale and diversity of the combined utility.

How much is the potential merger going to cost?

Our assessments and review process indicate that a potential merger is a win-win for customers and shareholders. We have and will continue to use our internal resources to the best of our ability, but also need to prudently secure external expertise and support from time to time. Costs related to the merger form part of the business case that will be presented to shareholders during early 2018. Merger related costs will be more than offset by the merger synergies, thereby providing net benefits to shareholders and customers.

How will shares of the new entity be distributed between Whitby Hydro and Veridian and/or its subsidiaries?

Shares of the new entity would be held by the current municipal shareholders of Whitby Hydro and Veridian. The shareholders would therefore be the Town of Whitby, the City of Pickering, the Town of Ajax, the Municipality of Clarington and the City of Belleville. Shares would be allocated based on valuations of the current business operations of Whitby Hydro and Veridian. Each of the potential merger partners hired an independent valuator to help establish respective ownership levels in the merged entity.

The province has provided incentives for utilities to merge, but how do those savings get passed along to the rate payer?

There are regulatory incentives that encourage distributor consolidation that result in cost savings that we can then pass on to our ratepayers and municipal shareholders.

Is the merger going to save taxpayers money?

The potential merger would allow us to become a larger, more efficient company. As a result, we will be able to identify efficiencies to the benefit of our customers and mitigate against future rate increases. As the new combined company would be municipally owned, dividends would continue to flow to the shareholder municipalities. We expect the merger to produce $90 million in savings over the next 17 years and customers, on average, will experience approximately 3% lower rates than they otherwise would have as customers of either utility alone. Additionally, the municipal shareholders will receive increased dividends, which helps mitigate the need for increased taxes.

What is remaining the same?

Our commitment is to ensure value for our shareholders, provide excellent customer service for our ratepayers, and to mitigate against future rate increases. That commitment will not change.

Is the business being sold or will the municipalities continue to own it?

It will continue to be 100% owned by the municipalities. One of our core principles is local ownership.

Why did you bring in external support?

As we move through this process, it makes good business sense to bring experts on board who can help guide us. Through a competitive process, each respective utility identified experienced consultants that could deliver sound advice as we moved through the process, including legal, financial and communications. These partners are valuable assets to this process and their expertise will ensure that our communities receive fair and thorough analysis and transparent, timely, and accurate information on this potential merger.

General Merger Questions and Comments

Why change the status quo?

There are many factors at play including the disruption in the industry that require us to evolve if we are to remain competitive. Additionally, our customers’ behaviours and opportunities are changing and we must find ways to continue to offer stable and affordable rates combined with greater efficiency and more valuable service offerings. Our best opportunity to mitigate against future rate increases and maximize new business opportunities is to achieve greater economies of scale, find efficiencies and develop our competitive strength in a combined company. There are also regulatory incentives in place that encourage distributor consolidation and the pursuit of cost efficiencies that benefit ratepayers and municipal shareholders. This makes it an opportune time for our shareholders to consider a merger.

Where else has a merger of utilities been successful in Ontario?

There have been many successful mergers of electricity distributors in Ontario. There were more than 250 electricity distributors in the province as recently as 1999, and this number has been reduced to just 78 licensed distributors today. Veridian is a good example of the successful consolidation of nine local utilities that each operated as a standalone business in 1999.

A more recent example of distributor consolidation in the province is the amalgamation of Enersource, Horizon Utilities, and PowerStream on February 1, 2017, and their purchase of Hydro One Brampton on February 28, 2017. This consolidation was approved by municipal shareholders and the Ontario Energy Board, creating a new distributor named Alectra.  Then, in December 2017, the City of Guelph decided to merge its local utility, Guelph Hydro, with Alectra. This was done in recognition of the need for scale and innovation in the distribution sector. In addition, Thunder Bay Hydro and Kenora Hydro recently received municipal approvals to merge into one company that serves both communities, while Entegrus Powerlines in Chatham-Kent and St. Thomas Energy in St. Thomas received municipal approvals in mid-2017 and are now awaiting OEB approval.  

The momentum for utility consolidation is increasing as all utilities look to ensure their long-term sustainability to provide benefits to their customers and their shareholders.

Questions about IT, Access to Microsite

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If you do not have access to the internet to visit our microsite, please let us know how else you would like to receive information. We can provide hard copies of everything on our microsite for your review if that is helpful.

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