PowerStream poises to merge and become the biggest energy company in Ontario
By Shan Qiao
Owned by three municipalities, the relatively young energy company called PowerStream has seen a decade of excellence and innovation. It is now poised to enter the broader service landscape and thus join to become the largest municipally-owned energy company in Ontario.
Headquartered in the heart of the City of Vaughan overlooking Canada’s Wonderland, PowerStream provides electricity to more than 375,000 business and residential customers living north of Toronto and in central Ontario. It is jointly owned by the City of Vaughan, Markham and Barrie, and provides service to customers as far as Penetanguishene, northeast of Barrie.
With a progressive and entrepreneurial approach to the future, PowerStream has not slowed down its efforts to become larger. A proposal has been developed to bring together four of Ontario’s local electricity distribution companies: PowerStream, Horizon Utilities Corporation, Enersource, and Hydro One Brampton. This merger would result in an expanded service map for the four utilities companies using their collective resources to serve almost a million customers from York Region, Barrie/Simcoe County, Peel Region, as well as Hamilton and St. Catharines, making it one of the largest municipally-owned energy companies in Ontario.
“It will create a utility that has over 930,000 customers, which is more than Toronto Hydro’s customers,” says Eric Fagen, Vice President of PowerStream, during an interview with RHMCBA.
According to a report from the City of Markham, if a merger happens, Markham residents can expect to see a reduction of about $24 to $30 per year on their utility bills. This merger now requires approval from the Ontario Energy Board.
Fagen provided a brief historical outlook on the local distribution companies, saying that once there were about 300 power utilities companies like PowerStream across the province. Over the years, consolidation brought together utilities in order to increase efficiency and achieve economy scales. Now the number is down to 70.
“Historically, with every merger we’ve completed, we’ve been able to reduce price pressure on the customer distribution rate, and we increased shareholder value for Markham, Vaughan and Barrie. It’s a win-win situation, good for the customers, good for the shareholders,” Fagen stresses.
For example, as a business case, when PowerStream merged with Barrie Hydro, it was projected to earn $5.5 million a year in synergy savings which was to be passed along to customers. “We exceeded those targets with every merger we’ve conducted to date,” Fagen indicates.
In order to help customers save on energy, in 2014 PowerStream partnered with Energy Gateways to offer customers an opportunity to participate in a pilot program that offers dynamic pricing, called Advantage Power Pricing (APP), different from the current Time-of-Use (TOU) structure. APP participants will be charged daily on-peak prices that will vary in response to overall provincial demand and are more expensive than TOU, as well as off-peak prices that are significantly lower than current TOU prices. According to PowerStream, APP will enable customers to pay a new low price for electricity over 80% of the time, and reduce bills by up to $150 a year.
Many homeowners have likely experienced energy door-to-door sales pitches or fraudulent collection calls on energy bills that could end up being costly.
“What a scammer will tell you is that you haven’t paid the bill. If you don’t pay your bill, your service will be cut off. They will ask PowerStream customers to pay through their credit card. That’s a telephone scam and has nothing to do with PowerStream or other utility companies.” Fagen urged customers who get a call similar to this to call the company for clarification.
“There is a lot of confusion regarding energy retailers out in the market who have agents that to go to households, knock on their doors and say ‘we can give you our rate’. They do have pricing plan in place but a customer should look at everything about that pricing plan to ensure that they are getting what they’re offered.
“Never ever show them your bill. If you do, they can take down your information and sign you up without you even knowing. It’s illegal but it has happened to people,” he says.
For more information, please visit its newly re-designed website www.powerstream.ca