Council Information Package
August 24 to 28, 2015
k:\Council&By-laws\C03 Council Agenda\Council Information Packages List
Date Sent Out
No.
(dd-mm-yy)
Media Type
1
28-Aug-15
Minutes
2
28-Aug-15
3
From
Subject
BIA Meeting Minutes dated July 7, 2015
Letter
BIA
Huronia Chapter of the Ontario Archaelogical
Society
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 Midland
5
28-Aug-15
Letter
Don Butineau
Plan OPA-02-15 and Amendment ZBA-03-15
6
28-Aug-15
Letter
Big Brothers Big Sisters
7
28-Aug-15
Letter
Town of Wasaga Beach
8
28-Aug-15
Notice
Committee of Adjustment
9
28-Aug-15
Notice
Committee of Adjustment
10
28-Aug-15
Notice
Committee of Adjustment
11
28-Aug-15
Notice
12
28-Aug-15
Report
Committee of Adjustment
Midland Power Utility Corporation Board of
Directors
Letter of Thanks.
Proposed Bill 73, Smart Growth for Our Communities
Act
Notice of Public Hearing re. Minor Variance Application
No. 6/2015
Notice of Public Hearing re. Consent to Sever
Application No. 3.3/2015
Notice of Public Hearing re. Minor Variance Application
No. 7/2015
Notice of Public Hearing re. Consent to Sever
Application No. 4/2015
42nd Annual Symposium
Potential Sale of Midland PUC
BIA Meeting Minutes
Tuesday, July 7th, 2015
Attendees:


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
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


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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


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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
Andre Sanche and Steve Maurice on committee
1 more meeting for downtown steering committee
People downtown have a different attitude towards cars and spaces
Suggestion made to make a 3 story parking garage
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
o
o
o
o
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

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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
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 pmarley@midlandpuc.on.ca or
705.526.9362 ext 204.
This report will be broken down into three key areas:
1.
2.
3.
Rate Analysis
Infrastructure
Share Purchase Agreement
1. Rate Analysis:
Midland PUC’s service territory includes approximately 7,000 customers, made up of five rate
classes:
Customer Class
Residential
General Service Less than 50 KW (small commercial)
General Service 50 to 4,999 KW (large commercial/manufacturing)
Street Lighting
Unmetered Scattered Load (example: Rogers Cable Boxes)
Customer
Count
6159
762
110
4
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.
Report to Council
Page 1
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
Midland PUC
2015 Distribution Rate Comparison
OEB INDUSTRY AVERAGE VOLUME
MPUC
Hydro One
Nmkt/Tay
PowerStream
Jun 1/14
Jan 1/15
Med Den R1
Rate Effective Date
VOLUME
May 1/15
May 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
$
20.51 -$
dollar value greater/less than MPUC
percentage greater/less than MPUC
64.09%
5.32 -$
-16.63%
8.13
-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
TOTAL MONTHLY INVOICE
$
54.34
$
132.75
$
68.86
$
53.88
$
78.41
$
14.52 -$
dollar value greater/less than MPUC
percentage greater/less than MPUC
144.30%
26.72%
0.46
-0.85%
GS>50kW
billing determinant kW
2,500
Fixed Rate
$
62.00
$
74.99
$
135.41
$
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
$ 25,049.74
$
$
497.48
dollar value greater/less than MPUC
percentage greater/less than MPUC
314.68%
4,179.16
52.50%
138.48
6.25%
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:
28 Large Use Customers:
Top 10 Large Use Customers:
Report to Council
average consumption 200kW;
average consumption 500kW; and
average consumption 1,000kW
Page 2
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 PUC
2015 Distribution Rate Comparison
MIDLAND AVERAGE VOLUME
MPUC
Hydro One
Nmkt/Tay
PowerStream
Jun 1/14
Jan 1/15
Med Den R1
Rate Effective Date
VOLUME
May 1/15
May 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
TOTAL MONTHLY INVOICE
$
27.90
$
45.89
$
23.76
$
21.07
$
17.99 -$
dollar value greater/less than MPUC
percentage greater/less than MPUC
64.48%
4.14 -$
-14.84%
6.83
-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
TOTAL MONTHLY INVOICE
$
64.06
$
164.67
$
80.56
$
62.22
$
100.61
$
16.50 -$
dollar value greater/less than MPUC
percentage greater/less than MPUC
157.06%
25.76%
1.84
-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
$
2,015.93
$
401.87
$
110.16
dollar value greater/less than MPUC
percentage greater/less than MPUC
290.53%
57.92%
15.88%
GS>50kW - Large Use Customers
billing determinant kW
500
Fixed Rate
$
62.00
$
74.99
$
135.41
$
Volumetric Rate
$
3.1594
$
13.1741
$
4.8017
$
3.3278
TOTAL MONTHLY INVOICE
$
1,641.70
$
6,662.04
$
2,536.26
$
1,802.38
$
5,020.34
$
894.56
$
160.68
dollar value greater/less than MPUC
percentage greater/less than MPUC
305.80%
54.49%
138.48
9.79%
GS>50kW - Top 10 Large Use Customers
billing determinant kW
1,000
Fixed Rate
$
62.00
$
74.99
$
135.41
$
Volumetric Rate
$
3.1594
$
13.1741
$
4.8017
$
3.3278
TOTAL MONTHLY INVOICE
$
3,221.40
$ 13,249.09
$
4,937.11
$
3,466.28
$ 10,027.69
$
1,715.71
$
244.88
dollar value greater/less than MPUC
percentage greater/less than MPUC
311.28%
53.26%
138.48
7.60%
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).
Report to Council
Page 3
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 98M4. 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.
Report to Council
Page 4
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.
Report to Council
Page 5
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.
Report to Council
Page 6
A summary of the in-kind work performed by Midland PUC is as follows:
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
Administration:
Bill Inserts
Billing analysis
Energy conservation services
Emergency Management Control 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
Report to Council
Page 7
Service Quality Statistics
Year
SAIDI
SAIFI
Including Loss of Supply
2010
2011
2012
2013
2014
Note 1
4.88
3.68
1.13
3.11
0.04
1.14
1.74
1.06
0.99
0.01
3.71
2.24
1.12
1.46
0.04
0.73
1.02
1.02
0.57
0.01
0.33
0.29
Excluding Loss of Supply
2010
2011
2012
2013
2014
2013 Outage
without large outage
Note 2
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:
Report to Council
SAIDI:
0.3269
SAIFI:
0.2884
Page 8
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
Connection fo New
Services - Low Voltage 90% within 5
days
Connection of New
Services - High Voltage 90% within 10
days
65% of calls
Telephone Call
answered
Accessibility Rate
within 30
seconds
90% of the
Appointments
time
Scheduled
90% of the
Appointments Met
time
80% within 10
Written Responses to
days
Inquiries
Emergency Response - 80% within 60
minutes
Urban Areas
Emergency Response - 80% within
120 minutes
Rural Areas
Reconnection
Performance Standard
Micro-embedded
Generation Facilities
2009
2010
2011
2012
2013
2014
100%
94%
100%
100%
100%
100%
N/A
N/A
N/A
100%
N/A
N/A
100%
100%
100%
100%
100%
100%
N/A
100%
86%
100%
100%
92%
100%
100%
100%
100%
100%
100%
91%
96%
100%
97%
99%
94%
100%
100%
100%
100%
100%
100%
N/A
N/A
N/A
N/A
N/A
N/A
100%
100%
100%
85% of a
yearly bases
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
Report to Council
Page 9
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
Rework:
Rates:
$80 per hour regular house
$160 per hour overtime rates
Streetlight Maintenance
Streetlight Conversion Project
- 3 year project - to be completed by the end of 2015
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.
Report to Council
Page 10
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.
Report to Council
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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.
Report to Council
Page 12
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)
a)
Report to Council
Midland PUC Sale Initiatives:
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.
Page 13
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.
Report to Council
Page 14