Selling part of Enwin a city option
Written by Administrator
Thursday, 10 September 2009
The option of selling part of ENWIN utility to private sector has recently come up.
Should Windsor sell off part of its electrical utility company to the private sector?
That’s one of the “strategic options” contained in a report that city council will discuss Monday night concerning the future of Windsor Canada Utilities Ltd., the wholly owned city entity that is the holding company which in turn owns subsidiaries Enwin Utilities Ltd. and Enwin Energy Ltd.
Coun. Drew Dilkens also favours looking into privatization. Investing the proceeds of any sale of assets may be a strategically better option for the city, he said.
Dilkens said it was “not necessarily the case” that going private automatically means utility rates for customers would go up. He said that, as “one of the most highly regulated businesses out there, next to liquor,” that applying for any utility rate increases is “a huge process.”
Halberstadt points out that Enwin was granted a rate increase of 4.8 per cent this year, while the dividend paid out to the city by WCUL for the most recent year reported (2008) jumped to $4 million from the previous year’s $3 million.
But Mayor Eddie Francis, who chairs the WCUL, and Coun. Fulvio Valentinis, vice-chairman of subsidiary Enwin Utilities Ltd., both caution against readily selling out to the private sector.
Francis said even selling a 10 per cent stake in the utility, which he said is the maximum allowed under current provincial guidelines, risks “surrendering control” of a vital public asset. While Enwin has struggled in the past, he said it is now well-managed and doing the job, with its debt load halved and capital re-investment doubled over the past five years, and now paying “very healthy dividends” and building up its assets.
While “everything’s an option,” Valentinis said what makes him “very, very leery” about any possible sale is the fact that “many” municipalities looked at private sector partnerships after the province deregulated the field at the start of the decade, but that, despite a number of mergers among existing utilities, “there seems to be a real reluctance to move it out of the public sector.”
Both Francis and Valentinis argue a private partner would not want to re-invest in the utility’s infrastructure to the extent that’s being done today (about $21 million in 2009), and Valentinis said eliminating the current $4 million annual dividend would force council to either find budget cuts of a similar magnitude or hike current tax rates a percentage point.
The staff report shows Enwin Utilities itself looked at 14 transactions involving Ontario utilities distribution companies, and only two of them involved private sector investments, each to acquire 10 per cent stakes. Five of the transactions were mergers, like Hamilton with St. Catharines, and six were acquisitions by public entities, like the Town of Essex’s $12.8 million purchase this year of its municipal neighbours’ stake in ELK Energy.
http://canadawindsor.com/index.php?option=com_content&task=view&id=2244&Itemid=111
Please feel free to add feedback, additional info, alternative contact details, related links, articles, anonymous submission, etc. as a comment below, via web-form, through social media or mail us directly and confidentially at: operationenwin [at] gmail [dot] com
This site may contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in an effort to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. and intend its use to be for education and instructional purposes only. Therefore, we believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond “fair use,” you must obtain permission from the copyright owner.
ShareAlike Statement: https://operationenwin.wordpress.com/sharealike/
OperationEnwin 