Minto supports Erth acquisition of Westario Power

MINTO – A merger between Ingersoll-based Erth Power and Walkerton-based Westario Power is closer to being a done deal, pending approval by the Ontario Energy Board.

Formed when local governments were restructured by the province in 2000, Westario is a municipally-owned utility providing power in Minto’s urban centres. (Hydro One is the provider for the rest of the town.)

Westario currently serves 25,000 customers in 15 communities, including Palmerston, Harriston and Clifford.

Minto, with 9.28% ownership in the company, voted in favour of the merger along with eight additional shareholders.

Minto Mayor Dave Turton told the Advertiser Westario’s shareholders “felt that Erth was the best fit.”

The board explored other offers after the Walkerton-based utility expressed interest in selling amid an intensifying electrical market and provincial pressure on smaller utilities to amalgamate.

“They offered the best value,” Turton said of Erth. A sale price hasn’t been publicly released.

Erth has promised to keep Westario staff for at least three years and to keep the Walkerton service centre, along with continuing to support local community initiatives.

“Erth is committed to maintaining local operations within Westario’s service territory, continuing community investment programs and ensuring local representation through governance,” Erth CEO Chris White said in an emailed statement.

White added the company is a “natural fit,” sharing the same corporate values and local commitment as Westario.

Turton said “our grid has to grow,” and noted the Independent Electricity System Operator, which manages the province’s power system, is “pushing it all” – from nuclear reactors to wind, solar and battery storage.

The Westario board felt it prudent to sell to a larger company able to leverage capital for costly infrastructure spending and upgrades to keep up with the times.

Westario board chair and Saugeen Shores Mayor Luke Charbonneau told the Advertiser customers are demanding more and Erth has a spending capacity that small communities lack.

“We see a greater opportunity for a better service for our customers through a larger entity,” Charbonneau said.

Erth formed from seven utilities during municipal restructuring 26 years ago, and now serves around 25,000 customers in 15 communities between the shores of lakes Huron and Erie.

Between 2011 and 2020, Clinton, Mitchell, Dublin and Goderich were folded into Erth.

The power company, a subsidiary of Erth Holdings, is currently inthe process of acquiring Tillsonburg Hydro, along with Westario.

Should the OEB approve the merger, Westario will cease to exist but the utility will have representation on the Erth board and a transition committee. It’s unknown from which municipality the Westario representative will come.

With Westario folded into its operations, Erth will be one of the largest power distributors by geography in Ontario, with around 60,000 customers across 31 communities in seven counties.

White said Minto customers won’t see hydro rate increases beyond annual inflationary increases approved by the OEB.

The utility won’t undergo a full cost-of-service review, which could lead to rate increases, for at least eight years.