cip august 24 to 28 - midland documents/cip august 24 to 28.pdf · town to block off parking lot at...

Council Information PackageAugust 24 to 28, 2015

k:\Council&By-laws\C03 Council Agenda\Council Information Packages List

No.Date Sent Out

(dd-mm-yy) Media Type From Subject

1 28-Aug-15 Minutes BIA BIA Meeting Minutes dated July 7, 2015

2 28-Aug-15 LetterHuronia Chapter of the Ontario Archaelogical Society 42nd Annual Symposium

3 28-Aug-15 Letter Township of Tay 35th Annual Terry Fox Run - September 20, 2015

4 28-Aug-15 Letter David Manning Open Air Burning in Midland5 28-Aug-15 Letter Don Butineau Plan OPA-02-15 and Amendment ZBA-03-156 28-Aug-15 Letter Big Brothers Big Sisters Letter of Thanks.

7 28-Aug-15 Letter Town of Wasaga BeachProposed Bill 73, Smart Growth for Our Communities Act

8 28-Aug-15 Notice Committee of AdjustmentNotice of Public Hearing re. Minor Variance Application No. 6/2015

9 28-Aug-15 Notice Committee of AdjustmentNotice of Public Hearing re. Consent to Sever Application No. 3.3/2015

10 28-Aug-15 Notice Committee of AdjustmentNotice of Public Hearing re. Minor Variance Application No. 7/2015

11 28-Aug-15 Notice Committee of AdjustmentNotice of Public Hearing re. Consent to Sever Application No. 4/2015

12 28-Aug-15 ReportMidland Power Utility Corporation Board of Directors Potential Sale of Midland PUC

BIA Meeting Minutes Tuesday, July 7th, 2015

Attendees:

Matthew Shepherd (minute-taker) Scott Campbell Dwight Stoneman Jackie bray David Zeldin Kathy Kowalsky Ashley Wagenaar Steve Barber Don Chapman Pat File

Absent:

Colin Pape Mike Ross Ashley Wagenaar Karen Shepherd Ed Hunt

Meeting Details:

Start time 6:32pm Declaration of pecuniary interest – None

Notes:

Economic Prosperity Summit o Steve attended Thursday, June 25th at the MCC o Keynote speaker from Alabama trying to bring prosperity to the area

(Tourism, agriculture etc.) Property vacancy committee

o Scott and Matt sent all information about stores and apartments for rent or for purchase to Kathy

o Kathy to forward e-mail to board Don Chapman Midland and Area Terry Fox Run 2015

o Provided and overview of the evolution of the Terry Fox Run o Terry Fox ran a marathon everyday o Schools in the area are all involved o The Midland Terry Fox Run collects no revenue, everything is donated

into the Terry Fox Foundation o $0.83 of each $1 goes directly towards research to stopping cancer

o New route has been designed to reduce costs (police fees, washrooms, barricades, water stops, etc.)

o Participation from Midland Parks & Rec and others o Letters sent to all Mayors in the area Midland, Tay, Tiny &

Penetanguishene (Tay & Tiny have agreed to do it) on make a Terry Fox Day

o Letters are being sent to food providers in the area to offer specials and profits will be donated to the Terry Fox Foundation

o Midland Ontario Terry Fox Run is located on Facebook o Matt to post a link to website on bia website and provide information to

merchants about getting involved Treasury report

o Copy of May 31st, 2015 financial report handed out o $250 petty cash missing from the report o Butter Tart Festival taken over by the town, we stopped spending money,

but received less income o $13,832 spent on beautification so far (still to be billed on flowers,

benches, etc.) o Administration costs are essentially on target o Budget

$114,000 levy tax to be worked with Board members can e-mail David about suggestions Should discuss with Town complementary works Next meeting will be a main focus on the budget No guest speakers at the next meeting

Events o Summer Sizzle Sidewalk Sale

Saturday, July 11th, 2015 Town to block off parking lot at the corner of Bay and King Street Irish Dance Team, Bayshore Lane Bowling, Photo Stand, Pie

Throwing, Musicians and more are coming for the event o BIG Downtown Dollars Draw

Happened from June 8th to July 7th Gave away $100 in Downtown Dollars Individuals take a photo of a receipt and post to our social media

sites to be entered to win Approximately 20 people entered

o Artwalk Saturday, August 22nd, 2015 Jackie working with vendor applications and possible bia activities

o Girls holiday weekend Looking into past information

o Storefront windows to be decorated with Georgian Bay designs Jackie to look into

Expansion o Downtown Master Plan

o Andre Sanche and Steve Maurice on committee o 1 more meeting for downtown steering committee o People downtown have a different attitude towards cars and spaces o Suggestion made to make a 3 story parking garage o Suggestion to redesign Bayshore to upgrade and design a more welcoming

downtown entrance o Suggestion to slow down traffic, more benches, etc. o In downtown master plan the downtown steering committee is providing a

list of suggestions o Suggestions have been provided from merchants, shoppers, event

attendees, etc. o Round about suggestion to add one on the corner of Younge and King

Street. o Waypoint building wants to be built in the downtown area. Waypoint has

been looking for over a year. Waypoint feels that if they design a building and lot that meets their needs then their costs will be reduced.

Meeting with the Town o Tuesday, July 7th, 2015 at 5pm o Town is asking for a multi day event downtown midland o Steve approached the hospital foundation to partner with us last year for

the butter tart festival o Steve presented to Gord McKay ideas about improving the Party on the

Dock to draw an older crowd o Steve proposed the hospital to run a brunch on the Sunday after the butter

tart festival, but the town turned the idea down because they feel that the weekend should only focus on butter tarts

o Town wants the focus on only a butter tart festival o The Town wants a committee and partnership with the BIA

Façade program o No updates

Streetscape o No updates

Safety Committee o Dwight attended last meeting o Talked about the Waypoint building o Forwarded presentation to Steve and Steve forwarded it out o Presentation is telling people how to react and doesn’t address important

issues David & Dwight feel o Safety committee talked about providing more money to the street

outreach program o Dwight feels that merchants aren’t calling the police because they don’t

want to create an incident o Letter should be sent to the town to ask if more funding could be put into

the street outreach program to have them out more so that merchants don’t have to be whistle blowers

o Town provides about $5000, but we feel more should be provided to the street outreach program

o BIA Safety Sub Committee should be started o Safety committee to present a new incident report system to town council

Motions:

Motion to accept the meeting minutes from June 9th 1st Scott 2nd David For: All Against: None Carries

Motion to accept the July 7th agenda in the addition of adding a treasury report back 1st David 2nd Ashley For: All Against: None Carries

Motion to request the town to rent the parking lot on the corner of 509 bay street for the Summer Sizzle Sidewalk Sale on Saturday, July 11th, 2015 1st Steve 2nd David For: All Against: None Carries

Motion to propose that the butter tart steering committee be compromised of 2 BIA members, 2 appointed by council, and 1 community member agreed upon by the town and the BIA 1st Steve 2nd Scott For: All Against: None Carries

Motion to adjourn at 8:13pm 1st Steve 2nd Dave For: All Against: None Carries

Report to Council Page 1

REPORT TO COUNCIL

TOWN OF MIDLAND

TO: Members of Council, Town of Midland

FROM: Midland PUC Board of Directors

RE: Potential Sale of Midland PUC

DATE: August 14, 2015

We understand Council will be considering the sale of Midland PUC over the next few months.

As a Board, we have asked Phil Marley, the President & CEO of Midland PUC to prepare various

statistics, infrastructure analysis and other potential issues for Council to consider in this process.

The following report is prepared to assist Council in its decision. If you require any further

information, please contact Phil Marley, President & CEO at [email protected] or

705.526.9362 ext 204.

This report will be broken down into three key areas:

1. Rate Analysis

2. Infrastructure

3. Share Purchase Agreement

1. Rate Analysis: Midland PUC’s service territory includes approximately 7,000 customers, made up of five rate

classes:

Customer Class

Customer

Count

Residential 6159

General Service Less than 50 KW (small commercial) 762

General Service 50 to 4,999 KW (large commercial/manufacturing) 110

Street Lighting 4

Unmetered Scattered Load (example: Rogers Cable Boxes) 11

Midland PUC’s service territory includes all those customers residing in the Town of Midland as

at December 31, 1997. Sunnyside and Midland Point areas, which are not part of Midland PUC’s

service territory, are serviced by Hydro One. Over the years, Midland PUC has asked Hydro One

about purchasing the customer base from them, but they were not interested in selling. At this

point, it may be a good time to revisit this issue. You may want to consider requesting Hydro One

to include all Town of Midland residents and businesses in any new rate structure. This would

cover off Sunnyside, Midland Point and clear up some boundary (long term load transfer) issues.

mailto:[email protected]


As you are aware, the Ontario Energy Board (OEB) approves all hydro rates (generation,

transmission and distribution). Midland PUC is a local distribution company. The distribution

portion of the total bill to a customer is approximately 25% for a residential customer. Every four

years Midland PUC prepares both a capital and operating expense analysis, culminating in a

proposed rate regime and applies to the OEB to approve the rates. These rates are specific to

Midland PUC and include those costs applicable to Midland PUC only.

Midland PUC is bordered by three LDCs, Hydro One (Midland – Sunnyside, Midland Point; Tiny,

Tay), Newmarket-Tay (Tay Township) and PowerStream (Penetanguishene). The following

analysis compares Midland PUC 2015 Distribution Rates with each of these three LDCs. Two

schedules are provided based on the same rates, however the volume of consumption differs.

Table #1: OEB Industry Average Volume: This table takes the industry classes province wide

and provides an average consumption value for each class – Residential 800 kWh; GS<50kW

2,000 kWh; GS>50kW 2,500 kW (manufacturers/large industrial). When the OEB compares

LDCs these variables are used in the calculations.

TABLE #1

OEB INDUSTRY AVERAGE VOLUME MPUC Hydro One Nmkt/Tay PowerStream

Med Den R1

Rate Effective Date VOLUME May 1/15 May 1/15 Jun 1/14 Jan 1/15

Residential

billing determinant kWh 800

Fixed Rate 15.60$ 26.03$ 15.00$ 12.67$

Volumetric Rate 0.0205$ 0.0331$ 0.0146$ 0.0140$

TOTAL MONTHLY INVOICE 32.00$ 52.51$ 26.68$ 23.87$

dollar value greater/less than MPUC 20.51$ 5.32-$ 8.13-$

percentage greater/less than MPUC 64.09% -16.63% -25.41%

GS<50kW

billing determinant kWh 2,000

Fixed Rate 21.94$ 26.35$ 29.86$ 26.08$

Volumetric Rate 0.0162$ 0.0532$ 0.0195$ 0.0139$


dollar value greater/less than MPUC 78.41$ 14.52$ 0.46-$

percentage greater/less than MPUC 144.30% 26.72% -0.85%

GS>50kW

billing determinant kW 2,500

Fixed Rate 62.00$ 74.99$ 135.41$ 138.48$

Volumetric Rate 3.1594$ 13.1741$ 4.8017$ 3.3278$

TOTAL MONTHLY INVOICE 7,960.50$ 33,010.24$ 12,139.66$ 8,457.98$

dollar value greater/less than MPUC 25,049.74$ 4,179.16$ 497.48$

percentage greater/less than MPUC 314.68% 52.50% 6.25%

Midland PUC

2015 Distribution Rate Comparison

Table #2: Midland Average Volume: This Table is based on Midland PUC customer

consumption averages only. As you can see, the average consumption per class is substantially

different from the OEB comparators – Residential 600kWh; GS<50kWh 2,700; GS>50kW

(manufacturers/large industrial) 200kW; 500kW; and 1,000kW. Midland PUC’s GS>50 kW

customer base is made up of 110 customers. Due to the substantial differences in monthly

consumption, Table #2 below shows three consumption levels for the GS>50kW customers:

110 Manufacturing/Industrial Customers: average consumption 200kW;

28 Large Use Customers: average consumption 500kW; and

Top 10 Large Use Customers: average consumption 1,000kW


You should also note one of the Top 10 Large Use Customers regularly exceeds the 2500kW

consumption level, so it is important to look at the OEB Industry Average costing analysis as well.

TABLE #2

MIDLAND AVERAGE VOLUME MPUC Hydro One Nmkt/Tay PowerStream

Med Den R1

Rate Effective Date VOLUME May 1/15 May 1/15 Jun 1/14 Jan 1/15

Residential

billing determinant kWh 600

Fixed Rate 15.60$ 26.03$ 15.00$ 12.67$

Volumetric Rate 0.0205$ 0.0331$ 0.0146$ 0.0140$


dollar value greater/less than MPUC 17.99$ 4.14-$ 6.83-$

percentage greater/less than MPUC 64.48% -14.84% -24.48%

GS<50kW

billing determinant kWh 2,600

Fixed Rate 21.94$ 26.35$ 29.86$ 26.08$

Volumetric Rate 0.0162$ 0.0532$ 0.0195$ 0.0139$


dollar value greater/less than MPUC 100.61$ 16.50$ 1.84-$

percentage greater/less than MPUC 157.06% 25.76% -2.87%

GS>50kW - All Customers

billing determinant kW 200

Fixed Rate 62.00$ 74.99$ 135.41$ 138.48$

Volumetric Rate 3.1594$ 13.1741$ 4.8017$ 3.3278$

TOTAL MONTHLY INVOICE 693.88$ 2,709.81$ 1,095.75$ 804.04$

dollar value greater/less than MPUC 2,015.93$ 401.87$ 110.16$


GS>50kW - Large Use Customers

billing determinant kW 500

Fixed Rate 62.00$ 74.99$ 135.41$ 138.48$

Volumetric Rate 3.1594$ 13.1741$ 4.8017$ 3.3278$


dollar value greater/less than MPUC 5,020.34$ 894.56$ 160.68$


GS>50kW - Top 10 Large Use Customers

billing determinant kW 1,000

Fixed Rate 62.00$ 74.99$ 135.41$ 138.48$

Volumetric Rate 3.1594$ 13.1741$ 4.8017$ 3.3278$


dollar value greater/less than MPUC 10,027.69$ 1,715.71$ 244.88$


Midland PUC

2015 Distribution Rate Comparison

As noted in both Tables, Midland PUC rates are substantially less than Hydro One for all rate

classes. That being said, I understand Hydro One is considering implementing a new rate class for

those LDCs it has acquired, so that the rates above would not be put into place in Midland. In that

case, the new rates may be lower or higher than what Midland charges its customers.

In the case of Newmarket/Tay and PowerStream, Midland residential customers pay a small

amount more, however, in both LDCs GS>50 kW (manufacturers/large industrial) customers pay

more than Midland customers. You can see on average, Midland PUC GS>50kW customers can

pay between $700 to $8,000 per month depending on their consumption levels (200kW, 500kW,

1,000kW, 2,500kW).


Note also, the above analysis does not include transmission or cost of power rates. It is only the

distribution rates – the monies paid to and kept by Midland PUC.

Recommendation:

Council may want to consider requiring the proposed purchaser to identify the impact on Midland

PUC customer rates (residential, small business and large customers) and their plan for rate

harmonization. Consideration should also be given to what service Midland PUC can offer to

adjoining LDCs – Hydro One – Midland Point and Sunnyside; PowerStream – Penetanguishene;

Newmarket/Tay. Having a depot in Midland could prove to be a very attractive alternative to any

of these LDCs.

2. Infrastructure i) 98-M6 Feeder Extension

Backgrounder:

A large portion of Midland’s customers are served by two feeders – the 98-M2 and the 98-

M4. The balance of our customers are served by the 98-M3 and 98-M7 which are shared

feeders with Hydro One and PowerStream. Prior to 2012, there was no redundancy built

into the system for the 98-M4 ad 98-M2.

In 2012, Hydro One completed the new 98-M6 feeder project which now serves the Port

McNicoll area. Prior to the completion, Council members met with the Minister of Energy at

AMO to request Hydro One complete an extension of this line to Midland PUC’s boundaries

to provide this redundancy. Following the AMO conference, a meeting was arranged with

Hydro One, the Ministry of Energy and Midland PUC. As a result of these meetings, an

analysis was completed by Hydro One to determine what, if anything could be done to

extend this feeder. It was determined this was not feasible solution.

However, since 2012, Midland PUC has noticed a marketable increase in reliability. It

should be noted that Hydro One has increased its tree trimming program and has upgraded

some of the pole line from Waubaushene which has increased the flexibility between the four

feeders providing the redundancy to Midland PUC . In addition, Midland PUC has

continued with its infrastructure upgrades and performs regular maintenance on existing pole

lines, including tree trimming.

Initially, Midland PUC considered the extension of the 98-M6 to help reduce the length of

interruptions when they occur on the 98-M2 and the 98-M4. However, in light of the

improvements made by Hydro One, it has become apparent through our outage statistics that

Midland’s power supply provides the required redundancy and is sufficient for our purposes.

Midland PUC, together with the IESO and surrounding LDCs have begun a regional

planning process that will forecast load requirements over the next 20 years. Through the

needs assessment process it was noted that the upgrades to the Waubaushene transmission

station have removed any concern regarding power supply needs for the next 20 years and

that no further upgrades will be required.


Looping Alternative

The closest stations that could provide a loop feed other than Waubaushene Transmission

Station (T.S.) would be the Midhurst T.S. or the Orillia T.S. Both of these stations are too

far away to provide a 44KV loop. Having said this, Hydro One recently twinned the

transformers at the Waubaushene T.S. to allow the transfer of the two different 230KV

feeders from Essa. Given this investment and the current load profile it is highly unlikely to

see any other loop options explored. As well, due to the growth in southern Simcoe County

the need for additional infrastructure in that area has taken precedence.

ii) Midland PUC Asset Infrastructure

Asset Management Plan:

Midland PUC’s Asset Management Plan includes the completion of pole line projects,

selected pole replacements (30 per year), transformer replacements (15 per year) and k-bar

replacements (4 per year) for each year.

Details of each project have been provided to BLG with our budget information, however,

Council may want to consider including the number of hours vs. the costs in determining the

level of work done by the new entity. For example, the hourly rate for Midland ($56

labour/$22 vehicle) may be substantially less than other LDC rates when taking into

consideration the vehicle and labour hours included in these budgeted projects.

Consequently, a project consisting of 1000 hours would cost Midland $56,000 vs. an LDC

whose internal rate is say, $75 x 1000 hours = $75,000.

Midland PUC has, through our Asset Management Plan, identified poles and transformers

that are in need of replacement, as follows:

Poles:

Age of poles greater than 50 years: 201 (included in Capital Budget Plan 2015-2019)

Age of poles between 20 and 50 years: 774 (250 included-Capital Budget Plan 2015-2019)

Underground Conductor & Conduit: (Capital Budget Plan 2020 to 2026)

2020 - Glen Eagles Cres.

2020 - Glen Mhor Cres. . 2021 - Howard St

2021 - Glen Bogie Cres.

2022 - Penetang Rd.

2022 - Woodland Dr.

2023 - Dominion Ave. Penetang to Woodland

2023 - Woodland Dr.

2024 - Bay St.

2024 - Borsa Lane

2025 - Ottawa St.

2025 - Dominion Ave Woodland to Bay

2026 - Montreal St.

Smart Meter Infrastructure: In 2010, Midland PUC completed the Provincial mandate for

smart metering infrastructure. Midland PUC installed a mesh network under the Elster

metering format. The metering network’s useful life will extend to 15 years and Midland

PUC would be expected to replace the meters in 2025. Other LDCs may have an alternate

smart metering infrastructure – examples: Sensus, Tilliant.


Recommendation:

Midland PUC Capital: Council may want to consider for the years 2015 through to 2019,

that the proposed purchaser complete the capital plan as set out in Midland PUC’s current

budget. For the period 2020 through to 2026 Council could consider requesting the

underground projects as indicated above. Midland PUC would expect to expend

approximately 3700 labour hours plus necessary vehicles and equipment per year for the

years 2015 through to 2026.

Smart Meter Infrastructure: Council may want to consider requesting the proposed

purchaser to bear the cost of the smart meter transition to the new metering network should

this change out occur prior to 2025. This will alleviate Midland PUC ratepayers paying

twice for the infrastructure.

(iii) Customer owned transformers

Midland PUC has 29 customers who own their transformers. As a result, these customers

receive a discount of $.60 per kW each month to compensate them for the maintenance and

eventual replacement of their infrastructure. On a yearly basis, Midland PUC monitors their

transformers and equipment and makes recommendations for maintenance checks to be done

by a high voltage contractor. The cost to replace these transformers can be upwards of

$300,000. If the customer does not fully maintain their infrastructure, the power supply to

Midland is put at risk.

Recommendation:

Council may consider requiring the new entity to continue with the monitoring of the

transformers owned by customers in order to maintain our reliability statistics.

(iv) Streetlight Maintenance:

On average Midland PUC has expended approximately 400 hours per year on streetlight

maintenance on behalf of the Town of Midland. Going forward, once the streetlight

conversion project has been completed (in 2015) maintenance hours are estimated to be

reduced to 100 labour hours plus necessary vehicle and equipment per year.

Recommendation:

Council may want to consider including streetlight maintenance as part of the requirements

in a Share Purchase Agreement.

(v) In Kind hours of work:

Midland PUC would estimate in kind hours of work to be 200 labour hours plus necessary

vehicle and equipment per year.


A summary of the in-kind work performed by Midland PUC is as follows:

Emergency Management Control Committee

Administration:

Bill Inserts

Billing analysis

Energy conservation services

In Kind Work by Midland PUC for the Town of Midland

Operations:

Banners

Town Parking lot lighting

Lighting in Little Lake Park

Help with Dangerous trees and or limbs

Flags at Town Hall / Police dept

Flags and lighting Town Dock

Underground Fault locating for pump lines at the Flume

Shoe removal from lights and wires

Tree trimming around Town owned power lines

Museum Parking lot lighting

Christmas Tree Assembly

Town of Midland Tech Committee

Recommendation:

The Share Purchase Agreement may include the above-noted in-kind work as a requirement

of the new entity.

(v) Midland PUC Reliability Statistics:

The summary below provides details on Midland PUC’s outage reliability statistics over the

past six years:

Definitions: SAIDI: Known as “System Average Interruption Duration Index”, this

index refers to the average outage duration in hours for each customer

served. Example, in 2014 the average duration in hours was 0.04.

SAIFI: Known as “System Average Interruption Frequency Index”,

This index refers to the average number of interruptions that a customer

experiences. In 2014, the average number of interruptions was 0.01

times.

Including Loss of Supply: refers to losses including those experienced

as a result of Hydro One transmission

Excluding Loss of Supply: refers to losses only within Midland PUC’s

service territory


Service Quality Statistics

Year SAIDI SAIFI

Including Loss of Supply

2010 Note 1 4.88 1.14

2011 3.68 1.74

2012 1.13 1.06

2013 3.11 0.99

2014 0.04 0.01

Excluding Loss of Supply

2010 3.71 0.73

2011 2.24 1.02

2012 1.12 1.02

2013 1.46 0.57

2014 0.04 0.01

2013 Outage Note 2

without large outage 0.33 0.29

Note 1: 2010 Statistics: In June, 2010 an F2 tornado struck Midland resulting in higher

than normal outage indexes.

Note 2: 2013 Outage: An increase in the service quality stats from 2012 to 2013 is

explained through a close analysis of the outage reports. As Midland PUC continues to

monitor the types of outages and investigates the causes, a constant trend develops. The trend

shows a slow decline of short duration outages that affect a small number of customers.

Having said this, there is an increase in the final statistics for 2013. This is due to one large

outage in January, 2013 that affected a very large number of customers. This outage was

caused by extremely high winds forcing conductors together and in turn, tripping two

breakers. These breakers happened to be heavily loaded and this outage affected a large

number of customers. If this outage was removed from our statistics it would show the trend

Midland PUC has been working so hard to achieve. This trend is further evidenced by the

2014 statistics.

The SAIDI, SAIFI statistics without the outage referred to above would have been:

SAIDI: 0.3269

SAIFI: 0.2884


The following is a summary of the Customer Service statistics filed with the Ontario Energy

Board each year, comparing Midland PUC’s statistic with the OEB minimum standard:

Indicator

OEB

Minimum

Standard

2009 2010 2011 2012 2013 2014

Connection fo New

Services - Low Voltage 90% within 5

days 100% 94% 100% 100% 100% 100%Connection of New

Services - High Voltage 90% within 10

days N/A N/A N/A 100% N/A N/A

Telephone Call

Accessibility Rate

65% of calls

answered

within 30

seconds 100% 100% 100% 100% 100% 100%Appointments

Scheduled

90% of the

time N/A 100% 86% 100% 100% 92%Appointments Met 90% of the

time 100% 100% 100% 100% 100% 100%Written Responses to

Inquiries

80% within 10

days 91% 96% 100% 97% 99% 94%Emergency Response -

Urban Areas

80% within 60

minutes 100% 100% 100% 100% 100% 100%Emergency Response -

Rural Areas

80% within

120 minutes N/A N/A N/A N/A N/A N/A

Reconnection

Performance Standard

85% of a

yearly bases 100% 100% 100%Micro-embedded

Generation Facilities

90% of the

time 100%

In early 2015, the Ontario Energy Board completed an audit of Midland PUC’s processes

relating to the “connection of new services, low voltage”, the “appointments scheduled” and

“telephone call accessibility rate”. Adjustments were made to Midland PUC policies to ensure

record keeping coincided with the Distribution System Code requirements for these service

quality measures in future years. Although these adjustments were minor in nature, the OEB

has indicated some of the statistics may be suspect. However, as shown above, Midland

PUC’s statistics are well above the minimum requirements.

Recommendation:

Council may want to include a requirement that the above-noted statistics remain at the 3 year

average by the new entity.

3. Share Purchase Agreement We understand you will be meeting in the near future to consider the Share Purchase Agreement.

As a Board, as well as the above-noted information, we have developed the following summary

for your consideration.

i) Lease Agreement with the Town (substations and Tower Antennae): This Agreement

now provides for the payment to the Town of $70,000 per year. In 2015, the Mid-Com

after hours service was discontinued which brought the total Lease Agreement down to

$70,000 from the original $90,000. The Town may want to consider continuation of this

Agreement.

ii) Preferred Pricing Agreement – This Agreement is to provide Midland PUC the ability to

purchase mainly equipment at the preferred prices the Town of Midland enjoys –

example: computer equipment


iii) Payments to the Town by Midland PUC – In addition to the Lease payments to the Town

(substation leases, tower) Midland PUC pays the Town between $10,000 and $20,000 per

year in vehicle maintenance costs. Midland PUC also pays property taxes on the 5

substations in addition to the lease payments. In 2014, the additional property taxes were

about $10k. Taxes in 2014 on the property owned by Midland PUC at 16984 Hwy 12

totalled $28,000.

iv) From an Operations side, Midland PUC works well with the Town Departments. We

regularly attend the Technical Review meetings with other Town Departments. Many

projects are discussed and Midland PUC works with the Town to develop plans for the

co-ordination of Town and Midland PUC projects. Midland PUC also assists the Town

in completing any unforeseen projects – the 6th

Street Pole Line and construction project

and the Manly Street project are examples. While the removal and installation of new

poles along these streets were not in our capital plans for 2013 or 2015, we worked with

the Town to reduce the Town’s costs by charging only the newer pole relocation costs to

the Town. Again, you may want to include this requirement in the Share Purchase

Agreement.

v) ReWork: Below is a summary of what type of work Midland PUC completes for the

Town – mainly streetlight maintenance. This work is billed to the Town at our regular

hourly rate of $80 and/or overtime rate of $160 per hour. This might be something the

Town may wish to include in the Share Purchase Agreement. In the alternative, the

Town may want to consider what hourly rates will be charged back to the Town over and

above those currently being charged.

Revenues to Midland PUC paid by Town of Midland

Streetlight Maintenance

Streetlight Conversion Project

- 3 year project - to be completed by the end of 2015

Rework:

Rates:

$80 per hour regular house

$160 per hour overtime rates

As you know, Midland PUC started the streetlight conversion project in 2013. This

project was a three year project expected to be completed by the end of 2015. Although

it is Midland PUC’s plan to complete the project within the original time period, we only

started the project in May of 2013. Consequently, this project may need to be extended

until mid-2016. This project may be something you might want to include in the Share

Purchase Agreement.

vi) Substations: Midland PUC has six substations. Five of the properties where the

substations are located (Montreal, Fourth, Queen, Brandon, Scott) are owned by the

Town of Midland and Midland PUC leases the lands from the Town as referred to in #(i)

above. The sixth property, Dorian substation is owned by Midland PUC. Midland PUC

also owns the buildings and property where the Operations Centre is located on Highway

#12.


vii) Quotes for Development Rework: Midland PUC provides quotes to customers and to

developers for work to be performed by Midland PUC. Rates for this work are set at $80

per hour and $160 per hour overtime hours, Sat/Sun and holidays. Midland PUC does

not know what rates other LDCs will use for this type of work or whether they will refer

it to contractors. In addition, Midland PUC quotes are good for 30-90 days depending on

type of work, materials required, etc. Other LDCs may have shorter or longer spans.

viii) Financing: Midland PUC is indebted to Infrastructure Ontario for loans totalling $4.5M

as at the end of 2014. Midland PUC also incurred an addition loan with Infrastructure

Ontario for $450k in 2015.

ix) Lease Revenue to Midland PUC: Midland PUC has leases with Rastin (Brightside

Management); Rogers Communications; RMW Corporate Solutions for property located

at 16984 Highway #12 (MPUC grounds). These leases have renewable terms.

Roof Repairs: Midland PUC has had the roof of the Administration building inspected

over the past couple of years and in the summer of 2015 a new roof was installed as a

result of leakage. One of our tenants has indicated they may be submitting a claim for

damages and lost revenues. To date we have not received any claim, however, this has

been reported to our insurer.

x) Utility Collaborative Services Inc (UCS): Midland PUC is a shareholder in this billing

co-operative corporation. The Shareholder Agreement and Membership Agreement

provide details on the transfer of shares and the 3 year retraction fee or notice period. If

Midland PUC is sold, unless the new shareholder continues with the UCS model, a notice

period of 3 years or 3 years average payment would be due to UCS – on average Midland

PUC’s costs would be in the neighbourhood of $60k per year. You may want to consider

incorporating these costs into the Share Purchase Agreement as well.

xi) Cornerstone Hydro Electric Concepts (CHEC): Midland PUC is a member of CHEC,

whose vision is to be recognized as the premier LDC Co-operative in the Province, by

meeting or exceeding members’ expectations through the sharing of services,

opportunities, knowledge and resources. As part of the continuing involvement and

sustainability of the organization, each member has committed their sponsorship for a

three year term commencing January 1, 2014. Midland PUC’s term expires December

31, 2016. Early termination will require payment of the remaining years membership

fees. Midland PUC’s obligation is $25,000 per year.

xii) Utility Standards Forum (USF): Midland PUC is a member of USF, an operations

standards group of LDCs whose responsibility lies in the construction and design of

utility infrastructure. Midland PUC is one of over 45 member LDCs throughout Ontario

who have worked collaboratively in the design of ESA approved standards, technical

networking and standards training for our operations staff. Midland PUC does not own

the standards but is a member of USF and pays annual dues for the use and updates on a

yearly basis. Midland PUC’s commitment is to the end of 2016/2017 at a cost of

approximately $9,000 per year.


xiii) Midland PUC employee concerns:

How long will Midland PUC office remain open

Where will staff be located, if Midland for how long

What union will unionized staff (9) belong to – they are currently IBEW

What will happen to management staff (8) and part-time staff (1)

Will unionized staff retain all benefits per the IBEW contract

Will management staff retain all benefits as itemized in the Due

Diligence

Will all union and management staff retain OMERS? If not, what

pension plan will be in place

Retiree benefits: will union and management staff be eligible for Retiree

Benefits

xiv) Midland PUC supports local community businesses – Compusolve, Huronia Alarms,

Staples, Home Depot, Canadian Tire, Midland Printers, Sarjeants etc. Is there anything in

the Share Purchase Agreement that would allow for this retention.

xv) Conservation and Energy Services: Over the past number of years Midland PUC’s staff

has included the expertise of an Energy Services Manager. We have consistently

provided the Town of Midland with assistance in their energy conservation programs

(Streetlighting, NSSRC, library, waste water treatment plant, etc). Assistance in the

preparation of the Municipal Energy Conservation & Demand Management Plan and

anticipated assistance with the Community Energy Plan are also a part of the contribution

Midland PUC provides.

In addition, we have worked very closely with our businesses and manufacturers to

provide them with support and other assistance in delivering the framework to achieve

incentives through the provincial conservation programs. Midland PUC’s expertise has

been supplemented by the CHEC Roving Energy Manager who has worked hand in hand

with Midland PUC in providing addition services – example: free energy audits with a

detailed written report.

During the period 2011 to 2014 Midland has achieved 13.2 GWh and 2M kW in energy

savings and as well, have provided incentives back to Midland PUC customers of over

$600,000. Midland has exceeded the kWh target established by the IESO by 22% (i.e.

122%) and has achieved 83% of the kW target as well.

Targets have been developed for the next five years to achieve 10.8GWh in energy

savings by Midland PUC customers.

Council may want to consider adding the proposed plan to achieve the conservation

targets and onsite assistance to the Midland PUC customer base into the Share Purchase

Agreement.


xvi) Sale Alternatives: Over the past number of years, our neighbouring communities have

sold and/or merged with larger LDCs. At the shareholder meeting in February,

alternatives were provided by Midland PUC to Council with the pros and cons of each

alternative. The structure our neighbouring LDCs have embraced is as follows:

Penetanguishene: sold 100% to Barrie Hydro, who in turn merged with

PowerStream

Tay Township: merged with Newmarket Hydro to form Newmarket Tay Hydro.

Collingwood: sold 50% shareholding in the LDC to PowerStream to form

Collus PowerStream Corp.

As indicated on page 4 of this report, Midland PUC is able to offer additional services to

both PowerStream (Penetanguishene) and Tay in that maintaining the service territories

and infrastructure planning can be designed and implemented by Midland PUC. This is a

great advantage to the Town of Midland in keeping a local presence. As well, Midland

PUC could be seen as a hub for the surrounding communities in the administrative and

conservation areas. The Town of Midland has shown its leadership in working with the

Town of Penetanguishene in other areas of Town departments and adding Midland PUC

as another layer has the potential of being advantageous to both Penetanguishene and

Midland.

As a follow-up to Council’s July 27th

meeting, Midland PUC has provided the contact

info to the Town for each of the above LDCs. Council may want to contact these LDCs

who could provide additional feedback on each of their business combinations.

xvii) Midland PUC Sale Initiatives:

a) Hydro One sale 2013/2014: Following the withdrawal of Hydro One in 2014 to

negotiate a purchase of Midland PUC and the subsequent industry synopsis

regarding the preliminary outcomes of the Ed Clark Panel report, Midland PUC

began the process of looking at alternative corporate structures for the future of

Midland PUC. Looking beyond the current environment and government pressures

to reduce the number of LDCs, Midland PUC recognized local employment, local

service and local autonomy were the goals Midland PUC would pursue while at the

same time look to partner with an LDC that could provide the backing and strategic

planning for the LDC of the future. Having a partner who would have the resources

to investigate future technologies, implement pilot projects and roll out successful

programs to other partners was something Midland PUC would look to explore.

Over the course of the summer of 2014, two meetings were held with PowerStream

to look at their business model and the model designed with Collus PowerStream.

PowerStream has shown a keen interest in pursuing further talks with Midland PUC.

As in the case of the Hydro One negotiations, the provincial and municipal elections

skewed the timelines in the pursuit of further discussions with other LDCs.


b) 2013/2014/2015 Other LDCs: Midland PUC was cognizant of the fact that as a

requirement of the negotiations with Hydro One, the Town of Midland agreed not to

have any discussions with other purchasers until the Hydro One negotiations

terminated. During and after the negotiations with Hydro One, Midland PUC had

been approached by some LDCs (Toronto Hydro, Veridian, Orillia Power, Collus

PowerStream, etc.) who have indicated their interest in working with Midland PUC

on a sale, merger, etc. At all times, Midland PUC forwarded all information to the

Town of Midland regarding these potential suitors.

c) In 2014/2015, the EDA (Electricity Distributors Association) and the CHEC Group

have both made submissions to the government on the design of the LDC industry.

As you know, Midland PUC is a member of both of these associations.

Following the announcement of the government’s intention to sell part of Hydro

One, the EDA, through the LDC Consortium will be approaching the government to

look at LDCs purchasing Hydro One assets.

In addition, the CHEC Group has held industry meetings with those LDCs with a

customer base of less than 30,000. CHEC will be pursuing a model to support both

local autonomy and the “one licence” alternative.

Both of these initiatives are in the early stages of implementation and plans are

being made to present these alternatives to the government and OEB.

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