Caution urged over utility sale

Electricity Transfer Tax Exemption lets Ontario municipal utilities sell or consolidate electricity assets tax-free with publicly owned utilities, spurring mergers before the October 16 deadline amid council scrutiny and EnWin Utilities skepticism.

A Windsor councillor is urging caution as the city begins to study the benefits of selling part of its electric utility.

Fulvio Valentinis, who is also vice-chair of EnWin Utilities, said that while he doesn't object to studying the sale, he does have "cause for concern.

"Everyone wants to have service delivery of their utilities and electricity on a regular basis," he said. "So council has a responsibility to ensure that the utilities are available under those circumstances, even amid Ontario cash squeeze pressures today."

The city's accounting department says it's "timely" to look into the sale, especially after the Ontario Hydro sale was scrapped previously, because of an Ontario-sponsored tax exemption that expires on October 16.

The Electricity Transfer Tax Exemption would allow the city to avoid paying a 33 per cent tax when it sells electricity assets to other Hydro partners in Ontario.

Since the first exemption in 1998, approximately 230 consolidations have occurred across Ontario, including Toronto Hydro sale proposals discussed publicly, according to the Ministry of Finance. But Valentinis remains skeptical.

"There really haven't been any sales to the public sector except a couple of 10 per cent interest sales by smaller utilities," he said.

"There's got to be a reason why other municipalities are not jumping to unload all these utilities, given privatization warnings from CUPE circulating locally."

In 2008, EnWin reported a net income of $7.9 million.

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