…and a problem. Well we in fact have a few numbers, not just one… from the elusive web of Town hydro companies. On October 9, 2018 the Town’s 2017 financial statements were presented to the Admin & Finance Committee for their approval. Why is that interesting? Because it gave us a small window into what has been happening with the finances of the companies in the hydro group.
To backtrack a little, a Municipal Freedom of Information (MFIPPA) request was submitted to the Town on August 17th requesting the 2015-2017 financial statements of all 5 companies in the Town’s hydro portfolio. The Town acknowledged that they were in possession of documents for 3 of the 5 companies. The Town however needed to assess whether these documents would “impact the interests of a third party” before they could release them.
There was no mention of who the third party was, but one would logically assume it must be the hydro companies.
The Town replied on September 25th, stating that the documents would not be disclosed as they constituted a:
“trade secret or scientific, technical, commercial, financial […] Information could […] prejudice significantly the competitive position […] of the organization”.
Yes, these hydro companies that have Board of Directors stacked with our elected officials (Mayor Bentley, Aldermen Berry, Mullins and Seaborn), asked themselves and decided “no” to releasing the financials. No surprises there. And unless there is another hydro provider in Town that we are not aware of, the whole “competition” excuse does not hold any water.
While the Freedom of Information request to the Town was in the process of being denied, some time was spent on the Ontario Energy Board’s (OEB) website. What a treasure trove of information! The OEB was contacted on August 20th requesting Grimsby Power Inc.’s audited financial statements, the biggest company in the hydro group. Voilà, within 48 hours the OEB sent them out and unlike the Town, the OEB was more than happy to help.
Back to the Admin & Finance meeting of October 9th, the Town’s 2017 financial statements were presented to the Committee for the first time. Interestingly enough, there was not a single question from the Aldermen asking how much Grimsby Power (GPI) or Grimsby Energy (GEI) had made or lost. While some of them proclaim not to know these numbers, the fact that some of them sit on the various Boards of Directors of these companies makes it difficult to believe they do not know financial details. Others just play sheep and plainly do not ask.
Taking all sources into account, what do we know? That GEI’s over-hyped Biodigester lost approximately $600,000 in 2017 and has now cost over $11 million. Do not forget that the Town decided to co-sign on the $4.5 million loan to GEI by the TD Bank for this so-called “green energy” project.
With GEI having no other real assets, the rest of the money had to come from somewhere and the $9 million ($7 million after taxes) raised from the Town’s sale of their share of Niagara Regional Broadband Networks (NRBN) is the most likely source of the extra millions. It was also learned that GEI ate up over 2 years of their 20-year contract to sell power to the Province of Ontario even before they “went live” and starting putting power into the grid in late 2017.
Now for some “good” news and some bad news. The “good”… Grimsby Power (the one that supplies electricity to you) made almost $1 million in profits after tax, from billing all of us for power. We put “good” in parentheses, as we will let you make the call if that is good or bad?
And the bad news… we have $48 million invested in all these companies. We, as in the Town, received dividends of $0 in 2016, $150,000 in 2017 and $414,000 in 2018. If we average those out dividends out over the past 3 years that is a measly 0.4% return on our investments. What is even worse, is we could have done better with an ordinary savings account at a bank.
It all seems like an utopian dream, we could have had our money safely in the bank earning interest and residents would not have to do handstands to get information on these companies nor endure party tricks with a $100 bill at Council. We would not have had to borrow $3.8 million in 2017, $4.0 million in 2018 for various municipal projects and we would not have to worry whether GEI will be able to make their monthly loan payment, which might ultimately end up on our tax bills.
Most importantly, there would be much less of wall between residents and elected officials who pledged to serve their community, but now owe a greater fiduciary duty to the hydro boards to protect their embarrassing financials.
If these are just the tip of the proverbial iceberg, we wonder how bad the whole situation is below the water line. Ask yourself why the majority of our current Council is afraid to release the numbers.
Silence has a price, and it looks like we are paying dearly for it.
Stay tuned for the next post in this series, it will be even more of an eye-opener than this one!