Press release.
Guelph City Council has approved in principle the amalgamation of its municipal holding company, Guelph Municipal Holdings Inc. (GMHI) with Guelph Hydro Inc.(GHI).
Council’s approval is subject to its satisfaction with GMHI’s due diligence and business case for amalgamation, which will be presented to Council this August.
The City of Guelph is GMHI’s sole shareholder. GMHI is, in turn, the sole shareholder of Guelph Hydro Inc. – a holding company for the regulated utility Guelph Hydro Electric Systems Inc. (GHESI) and the unregulated company Envida Community Energy Inc.
The amalgamation would provide a more streamlined and effective governance structure for GMHI that is better aligned with best practices in corporate governance. It would not affect the operation of GHESI, the utility that provides electricity to customers in Guelph and Rockwood.
GMHI was established by the City in 2011 in order to manage City-owned assets more strategically, maximize the value of those assets, and achieve greater alignment with the City’s priorities.
In a review of its current situation, GMHI identified that progress on these goals has been hampered by a cumbersome governance structure.
“A more streamlined structure will provide the agility, skills, and resources needed for GMHI to achieve what it was established to do,” said Mayor Karen Farbridge, Chair of GMHI’s Board of Directors. “It will enable GMHI to capitalize on exciting business opportunities ahead.”
Those opportunities include the potential addition of three new subsidiary companies to GMHI’s portfolio over the next two years: a new real estate-based development corporation to direct select City assets and operations such as downtown land parcels and parking; a thermal utility to deliver on the District Energy Strategic Plan; and Guelph Junction Railway, an established railway with emerging potential.
“GMHI is at an exciting point in meeting its mission,” said Ann Pappert, the City of Guelph’s CAO and GMHI’s CEO. “However, its multiple holding companies and subsidiary boards – each with different communication protocols, systems, and approaches to risk management – is complicating business deliberations and slowing progress. This amalgamation will enable us to make better use of resources and talent, grow the business, and increase value.”
GHI has indicated support for working with the GMHI board to achieve a corporate structure that fosters and protects the sustainability of Guelph Hydro Electric Systems Inc. and Envida Community Energy while meeting the objectives identified by the GMHI board.
GMHI’s 2013 Annual Report Can be found at: www.guelphholdings.com
