By Mike Williscraft
So let’s talk a little Grimsby Power this week.
Simply, this is a hydro utility owned by you – the taxpayers of Grimsby.
Grimsby town council acts as the shareholder.
With this piece, there is zero interest in dealing with a Grimsby council issues other than to note the importance that the G5 NOT take it upon themselves to figure they know what’s best when it comes to maintaining ownership of the company or selling it off to Fortis.
The main reason being they don’t and won’t know what’s best and it will undoubtedly end very badly as has been the case with so many other issues that bunch has bungled in just 2.5 years of their term.
And if you are wondering why Fortis will be the company which buys Grimsby Power, whose parent company is Niagara Power Inc., it goes back to a sweetheart deal years ago when Fortis acquired 10 per cent of the company for a fraction of its value – another deal for which the town owes zero debt of gratitude to the previous council regime.
Fortis possesses a first-right-of-refusal to buy up the remaining 90 per cent of the company. They could always pass, one supposes, but it would be shocking to see them not pick up the asset given the opportunity.
The larger question – regardless of the value and who says what about anything – is the basic concept of sell or don’t sell.
So why would anyone want to sell a high-quality, consistent money producer?
That answer is simple and can be covered in one quick phrase – quick money.
There would definitely be money. With a value of about $40 million, much of that would instantly fill the Town’s coffers. And that is precisely why nobody should want this administration and council determining its fate because there is no way any single resident in this community could say with confidence a good chunk would not blown on some whim.
Of course this dough would pay for a lot of things – if not just about all things – on anyone’s wish list in town. You’d see fancy stuff at the waterfront. You’d see a new expansion at the Peach King Centre paid for. You’d see a new fire station in the west end.
All good things, no debate there.
The debate comes in when one looks at other ways to get to the same destination – create a reserve, sock money away, plan well, wait for an opportune grant program, then pounce. Yes, it may take 10-15 years to create that short list I just cited, but the upside is those features could be added with good planning and the Town would still own its largest asset.
And that asset would still be pumping in its clockwork $250,000 or so into the Town’s bank account – interest accumulated on the $5.7 million promissory note held by the Town for Grimsby Power Inc.
This represents about a 2.5 per cent tax hike annually, mitigated by the annual hydro contribution.
It is true, when one thinks of Grimsby Power and the whole operation these days, it is easy to gravitate to the dismay and shock at what happened when a small group of people managed to light $18 million or so dollars on fire with the biodigester. It is an example of all the bad things that can happen when people who think they know best use the veil of being a private corporation to waste taxpayers’ hard-earned money.
Grimsby Power is a great company run by really good people. The team knows what they are doing and run a very professional show.
There is absolutely no reason to cash it all in for short-term gain just so you can impress family and friends by going on a spending spree.
Grimsby’s hydro utility is a golden goose. It was nearly cooked but thanks to the people who – ironically just resigned from the board of directors – (as the G5 had already said they were going to terminate them) more money was salvaged from the biodigester than anyone thought possible.
And the phoenix rose from the ashes to live another day.
That phoenix – Grimsby Power – needs to keep serving the people of this community for decades to come. There are precious few third party contributors to any municipality’s revenues aside from taxes. This is one the Town controls and cashes in on annually.
Where I come from they call that a keeper.