Tillsonburg Hydro/ERTH merger approved by OEB

Jeff Helsdon, Editor

The proposed merger of Tillsonburg Hydro Inc. with ERTH Corporation has been approved by the Ontario Energy Board (OEB).

In a decision released Oct. 15, the OEB concluded that the transaction satisfies its “no-harm” test and is not expected to adversely affect customer prices, reliability, service quality or financial viability.

"This approval represents an important step forward for Tillsonburg and our residents," said Mayor Deb Gilvesy. "The partnership with ERTH positions Tillsonburg Hydro to benefit from greater scale, shared expertise and increased resources, while continuing to provide the reliable service our community depends on. We're particularly pleased that local customers will continue to receive the high-quality service they expect throughout the transition."

“This is an exciting opportunity for Tillsonburg, and I am thrilled that we had the opportunity and vision to make it happen,” said Dan Rasokas, THI board chair.

Customers will see no immediate changes. Tillsonburg Hydro will continue operating under its existing name and electricity distribution licence during the transition period, with ERTH Power branding introduced gradually over time. Customers should continue to pay their electricity bills as usual and can expect the same reliable service, customer support, and outage response. Customers and employees will continue to be kept informed as plans progress.

The possibility of the merger first came up last fall, with needed upgrades to the Tillsonburg transformer station as one of the main reasons. Preliminary estimates for adding more capacity through that project are $29 million. If the upgrades were spread across THI’s existing 8,600 customers, they could have doubled rates, whereas ERTH's larger customer base could fund the upgrades without impacting rates. Two public meetings about the merger drew little resident turnout, but one concern raised was response times in the event of an outage.

The THI negotiating team returned to the table seeking, and receiving, response-time guarantees.

“The need for additional capacity is imminent – it is a question of when, not if,” Gilvesy said. “The IESO is currently reviewing Tillsonburg’s capacity requirements and is expected to release its findings and recommendations in the not-so-distant future. The IESO will determine the timing and scope of the required infrastructure.”

The collaboration will see Tillsonburg acquire shares in ERTH Corporation, a municipal holding company that owns ERTH Power Corp. and other unregulated companies under the corporate umbrella. Tillsonburg will be the second-largest shareholder among the 10, behind Ingersoll.

"By becoming the second largest municipal shareholder in ERTH, the town will continue to have a vested interest in the utility's future while creating opportunities to leverage the benefits of a larger organization operating in an increasingly complex utility environment," said Kyle Pratt, Chief Administrative Officer for the Town of Tillsonburg. "This outcome reflects council's commitment to ensuring the long-term sustainability and success of Tillsonburg Hydro."

The mayor explained that a solution was needed, but it would come with financial implications.

“This is precisely why pursuing a hydro partnership with ERTH and THI is so important,” she said. “By sharing the cost burden across a broader customer base, this partnership can help mitigate the financial impact, support long-term rate stability, and protect our residential, industrial, and commercial customers from disproportionate increases.”

“Tillsonburg was able to find a solution to a problem being faced by many smaller local distribution companies,” Rasokas said. “Capacity and cost constraints would have weighed heavily on the utility in the future. This gives us the ability to face those pressures without adding costs to our ratepayers, AND it gives Tillsonburg a voice at the table of the utility.”

ERTH Power began in 2000 as the former Erie Thames Powerlines, when the utilities for Ingersoll, Thamesford, Otterville, Norwich, Tavistock, Aylmer, Belmont, and Embro amalgamated. The name changed to ERTH Power, and Clinton, Mitchell, Dublin, and Goderich joined. Once the merger with THI is complete, ERTH will serve 60,000 customers across 31 communities.