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An Experienced Opinion On MPUC Sale – A Bad Idea

An Experienced Opinion On MPUC Sale – A Bad Idea

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It is not the first time MPUC has been on the chopping block. Council has discussed selling the company since 2013 and was approached by Hydro One that year before it backed out.

At the time, Coun. Mike Ross, now Midland’s deputy mayor, said everything is for sale for the right price. However, Rob Holsgrove, then board chair of the MPUC, said the utility pays Midland annual dividends of $400,000 and should not be sold without a town-wide referendum.

The news above has been well-documented over time by our local media.  We wanted to know more about this story and tracked down the past chair of the MPUC with 15 years experience on the board and great deal more in running large, profitable businesses.  We are once again bewildered at how our Council of nine could possibly come to conclusions that see the sale of this well-run and extremely profitable PUC could be good for anything other than quick short-term financial gain at the expense of steady growing profits.

In our interview with Rob Holsgrove he stated the following, and we think Council would be wise to heed the advice of someone who has nothing to gain one way or the other.  You read his comments and decide if your one-year old Council really has firm grasp on the magnitude of what they are proposing and whether this should be decided by a referendum (public vote).

UPDATE: Special Council Meeting Monday January 18t 2016.  Click for more details.

Some Background On Rob Holsgrove

Rob Holsgrove

Rob was born and raised in Quebec City and moved to Ontario to attend the University of Guelph where he graduated with a BSc in 1970. He went to work as plant manager of a plastics company in the Toronto area for ten years before moving to the Midland area to assume the position of assistant manager and then Vice President of Day Specialties Corporation (DAYSCO). Shortly after the company was sold to SCHOTT Glasswerke of Germany in 1989, he assumed management responsibility for the Midland facility and was promoted to Business Manager in 2003 with four manufacturing plants and 600 people reporting to him from Midland to Monterrey Mexico.

He spent most of the 90’s on the Chamber of Commerce board and was instrumental in joining the four municipalities together to form the Southern Georgian Bay Chamber. He was the first President of the new board and retired from it in 2000. Shortly after, Council of the day asked him to join the MPUC board of which he became the chair about five years ago. His term was up last December.

What We Asked Rob Holsgrove

When asked about Council’s renewed desire to sell off some or all of the MPUC, he took some time to reflect on the past years and his knowledge of the MPUC and the options that had been previously explored during his tenure.

Rob responded:

When I hear about Council’s consideration of the sale of its electricity distribution asset, the first question that comes to mind is, why? Common answers I hear include “because the provincial government wants fewer distribution companies in Ontario”.

Why is that? Because they believe that economies of scale make a larger company more efficient.

How misguided is that when they have their very own example in Hydro One, the Province’s largest distribution company with the highest prices.

Another reason I hear is “because other LDC’s are selling or amalgamating”.

So what! Maybe they have reasons of their own. Maybe their LDC is not run efficiently, is not profitable, and is not paying dividends that offset property taxes. Maybe the shareholder (Council) doesn’t know how to fix it so selling could well be the most viable option for them. All that is not the case with MPUC.

The Province of Ontario is hardly an example to follow when it comes to electricity distribution. Their answer to Ontario Hydro’s massive debt in the late 1990’s was to divide the asset into Ontario Power Generation and Hydro One, placing a debt retirement charge on consumer’s bills for the rest of their lives. Then they sold off OPG for a song, divesting Ontario taxpayers of an asset worth Billions of dollars.

Now they see Hydro One in the same financial boat as Ontario Hydro and they don’t know what to do. Instead of fixing the problem, they warn us of further increases in the near future and again they want to sell the asset.

So… we are already paying the highest electric rates in the country, if not on the continent, and we can expect it to get worse and to lose the assets at the same time.

Reminiscent of the 407? What happened to the rates when our leaders sold us down the river on that colossal blunder?

Well, here we go again. Why does Midland want to sell off an asset that is well run and paying the Town dividends up to $550,000 / year and rising?

Where will the money go?

Is this a case of selling off the back 40 to pay the mortgage on the farm? And when the money is all gone and we have no assets left to sell off, and no dividends to help out, where do we turn? Maybe fixing the problem by living within our means is a more sustainable solution.

Due to a great staff and forward thinking Boards of directors, the MPUC has invested well in its infrastructure and is currently in better shape than it has been for decades. Selling the facility could not possibly guarantee the continuance of local, good paying jobs for more than the short term. Once sold, the citizens and business’ of Midland will never get it back. Consider this carefully and make sure the council does the right thing for you.

OurMidland.ca has organized a petition calling on Council to stop this sale.  Read more about that petition here.

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An Experienced Opinion On MPUC Sale – A Bad Idea

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