Midland Power Utility Corporation (MPUC)
The Town of Midland, like other municipal owners of small to midsized LDC's, are under considerable pressure to examine the risks associated with the future of continuing to own and maintain a local hydro distribution company against a backdrop of ever-changing technological developments, financial implications and provincial policy changes impacting Ontario's electricity sector.
This page is where you'll find information about this project, key members and meeting dates.
PUBLIC INFORMATION SESSION - Sale of Midland Power Utility Corporation
Join us for an information session regarding the sale of the Midland Power Utility Corporation (MPUC). Hear from members of the 'Transaction Team' about the details of the sale.
Thursday, June 1st, 2017
North Simcoe Sports & Recreation Centre
MEDIA RELEASE: Town of Midland Announces Sale of MPUC to Newmarket-Tay Power Distribution Ltd.
DOWNLOAD FULL MEDIA RELEASE HERE: MR-Newmarket-Tay-To-PurchaseMPUC-April21-2017
(MIDLAND, ON) Midland Town Council has agreed to sell Midland Power Utility Corporation (MPUC) to Newmarket-Tay Power Distribution Ltd., the local distribution company owned by the Town of Newmarket and the Township of Tay. The sale has been approved in principle subject to our legal advisors finalizing the contract language.
Council will be hosting a public information meeting to share the details of the agreement within the next several weeks, after which the proposed sale would be submitted to the Ontario Energy Board for approval. This process could take several months to complete.
Council can confirm that all of the critical issues forming the Key Principles for Midland Council have been satisfied through this offer.
Some key benefits of the deal at a glance:
Job protection for current MPUC employees
There will be no job loss from the sale of MPUC. Employees will have continued employment, benefits, and union representation into the future.
Local presence secured
Not only will the sale secure jobs for MPUC employees, they will also continue to operations at the Hwy 12 location for several years. To ensure the same level of local reliability and customer service and satisfaction that our ratepayers have come to expect was an important consideration for Midland Town Council.
Rate structure and stability for ratepayers
Customers will share in the value of the efficiencies and economies of scale that a larger organization like Newmarket-Tay can achieve. The sale includes electricity distribution rate stability essentially in line with the rate of inflation for a period of 10 years and consistent with Ontario Energy Board requirements. In addition, for year eleven onward Midland distribution ratepayers will further benefit from rate harmonization with Newmarket-Tay rates.
"The new arrangement meets all of the requirements we set out to achieve, and then some." said Midland Mayor Gord McKay. "It provides the people of Midland improved electricity distribution rates, guaranteed service levels, lasting job security for our MPUC workers, and economic development opportunities that will benefit our existing businesses and attract new businesses to the area. It is a good deal for Midland."
Council will announce a date and details for a Public Information Session where Council along with key representatives of MPUC, the Transaction Team, as well as Newmarket-Tay representatives will be on hard to present the deal and answer questions from the community.
MEDIA RELEASE: Negotiations Underway for Potential Sale of Midland PUC
DOWNLOAD HERE: MR-NegotiationsUnderwayForMPUC-April7-2017
Another phase in the Town's due diligence process has begun for the potential sale of Midland Power Utility Corporation (MPUC). Following the March 15, 2017 deadline for submissions to Midland's Requests for Proposals (RFP), the Town's legal and financial team has presented their assessment of the submissions received.
After a detailed review and evaluation of all proposals by the Midland PUC Transaction Committee, the Town's legal and financial advisors presented a proponent short list to Council during an in-camera meeting on Thursday, April 6th, 2017. Subsequent to the deliberations, Council provided instruction to its Solicitor Mark Rodger (Borden Ladner Gervais LLP) to engage in further negotiations with the recommended short list.
These final negotiations are projected to take approximately one month. Mr. Rodger and the consulting team are expected to report back to the Midland PUC Transaction Committee and Town Council once those negotiations have been essentially completed.
Next Phase Begins for Potential Sale of Midland PUC
DOWNLOAD FULL MEDIA RELEASE: Media Release - Town of Midland MPUC RFP Process
March 15, 2017 marks the beginning of the next phase of the Town of Midland's due diligence process for the potential sale of Midland Power Utility Corporation, the Town's local hydro distribution company (LDC). The Town, through its Solicitor Mark Rodger (Borden Ladner Gervais LLP), issued a formal Request for Proposals (RFP) on December 9th, 2016 to multiple participants. The RFP responses are due on Wednesday March 15th. The focus now shifts to the analysis phase where the Town and its legal and financial advisors will carefully examine the details of all proposals received. The analysis and review process is anticipated to take several weeks to complete before Town Council decides on a short list of potential suitors.
According to the Town's Legal Counsel Mark Rodger, "the review, evaluation and negotiation process to allow Town Council to determine the optimal proposal received usually takes between 3-5 months from the time the proposals are received. Once this process is concluded the municipality should then be in a position to publicly announce their final decision on this matter."
Town of Midland commences competetive process for potential sale of Midland PUC
DOWNLOAD FULL MEDIA RELEASE: MR-RFPProcessforMPUC-November29-2016
Following Town Council’s decision made earlier this fall to pursue a potential 100% sale of Midland PUC, the regulated electricity distributor serving Midland, the Town has commenced a competitive Request for Proposals process to solicit offers from a wide range of possible purchasers. The RFP process requires potential buyers to make specific proposals on a range of issues important to Town Council including local employment guarantees, future distribution rates, service quality, customer service and purchase price for 100% of the Town’s interest in its electricity distribution company.
Mayor McKay said “Council strongly believes that Midland taxpayers and ratepayers are best served through a competitive bid process where multiple bidders must compete to deliver the best value for the Town and our residents”. It is anticipated that Council will receive proposals by the spring, 2017. Town Council would then need to consider and make a final decision whether or not to sell Midland’s electric utility. If Council makes the decision to sell Midland PUC the transaction would first need to be reviewed and approved by the Ontario Energy Board through a public hearing process.
Ontario has seen significant consolidation of electricity distributors over the past several years. In the late 1990s Ontario had more than 300 local distribution utilities, today approximately 60 remain. Recent reports on industry consolidation recommend that Ontario would be better served at lower cost by approximately 8 to 12 large regionally-based electricity distributors.
For more information about the RFP process please contact legal counsel for the Town of Midland:
J. Mark Rodger, Partner
Borden Ladner Gervais LLP
"Sale Option Chosen For Midland PUC" - Midland Mirror (June 27th, 2016)
Midland Council Votes To Proceed with Sale of Midland PUC
VIEW/DOWNLOAD THE OFFICIAL PRESS RELEASE
VIEW/DOWNLOAD THE CAO's MPUC PRESENTATION TO COUNCIL
(MIDLAND, ON) On June 21st, 2016 Midland Council voted by 6-2 to proceed with the sale of the Midland Power Utility Corporation.
Council's decision was made after years of discussion and dozens of meetings about the future of the local utility and developments in the provincial electricity sector that will impact us over the coming decades. These discussions began as early as 2008 and as a result of repeated Provincial studies and commissions encouraging Local Power Distribution Corporations to consolidate either through sale or merger. In 1999 there were 307 Electric Commissions and today there are approximately 70 remaining Local Distribution Corporations, of which Midland is one.
"We are all proud of our MPUC and the high quality of service that they have provided to our community since 1908. But times have changed." said mayor Gord McKay. "The MPUC Board advised Council that the 'status quo' is no longer an option. Specifically, the MPUC Board has stated it has neither the capital or human resource assets to take on the upcoming challenges. Council accepted their insight."
Council debated whether a sale or a merger, the two major types of business arrangement, provided the better protection to the people of Midland and the Town's MPUC asset. Council was firm that any business arrangement would be negotiated with a quality organization that had a track record of ensuring exceptional customer service. Further, Council agreed on a list of 15 points that would have to be satisfied before consummating any deal. With these protections in place, the certainty provided by a sale is a much better arrangement for the people of Midland than becoming a minority shareholder in a merged corporation.
In the coming weeks Council will retain expert assistance to pursue the sale option. Additional public meetings will be arranged and communications provided to ensure that residents are kept informed of developments.
For further information please contact:
John Skorobohacz, CAO, Town of Midland
Midland PUC - Merger Or Partial Sale Background Information
While the future direction of the MPUC has not yet been determined, both the MPUC Board and Midland Council agree that the "status quo" is not an option.
The MPUC came into existence in 1908, when the provincial government established municipal Public Utility Commissions and in 2000, the provincial government changed those commissions to business corporations called Local Distribution Companies (LDCs). Since that time the MPUC has faithfully and responsibly provided electrical power to the citizens of Midland. The MPUC has grown and today serves some 7100 residential and commercial customers.
Initially the province established 393 LDCs. Today that number is down to 72. Even with that lower number, Ontario has significantly more LDCs than any other province. The Ontario government, looking for cost savings, has recognized that by reducing the number of LDCs to about 12 would achieve savings of some $1.4B through economies of scale.
LDCs, like all companies, must continue to reinvest in their business. The energy business in particular is facing major changes that will require new investment and increased risk. Electrical distribution will be built around a "smart grid" technology that both delivers and stores electricity in order to better manage the resource. New sources of energy, such as solar and gas co-generation, are being brought on stream. These developments will change where electricity is generated and therefore how it is distributed. To be successful in tomorrow's energy business will require new skills, and new investments.
MPUC is part of this changing environment. It has a small customer base and as a result, it has limited resources to make future changes. Hard decisions must be made to secure our energy future. Both the MPUC Board and Midland Council are taking the necessary steps to meet the challenges. The MPUC Board and Council remain committed to ensuring that Midland's citizens will continue to have access to high quality energy for decades to come.
ADDITIONAL INFORMATION: VIEW/DOWNLOAD THE CAO's MPUC PRESENTATION TO COUNCIL