Letter from the President & CEO – Re: Social Media Posts
July 5, 2022
As the new President & CEO, I am honoured to have the opportunity to lead this organization. These are exciting and opportune times for the Utility (referenced herein, collectively as – Geosands Inc., Wasaga Distribution Inc., and Wasaga Resource Services Inc.) and the industry. The Utility is well-positioned to continue to deliver electricity in an affordable, safe, and reliable manner and will continue to evolve to meet its future needs.
We will ensure that your input is considered as we look to the future considering newer technologies, innovation, and growth opportunities. Our high customer satisfaction numbers indicate that we are leading the way in listening to our customers. We will never take your confidence for granted. A community that works together can do great things together.
It is also important for me to ensure the reputation of the Utility and its employees are protected and that all stakeholders are provided factual information.
Unfortunately, it has come to our attention that senior individuals formerly involved with the governance and leadership of the Utility have been spreading misinformation online through social media. The comments being made are factually incorrect and in bad taste.
Particularly troubling are the comments made by a former officer who served on the Board from 2004-2020.
Our response to these comments are as follows:
“And now today the final big question remains, what growth have we actually seen in Wasaga Distribution Inc. since 2018”
Wasaga Distribution Inc. and its affiliates continue to deliver an annual dividend to its sole shareholder, the Town of Wasaga Beach and reinvest their excess returns in infrastructure to ensure that the Utility can maintain its ability to supply reliable electricity while supporting the growing needs of the community.
In 2020, The Utility adopted its 2021-2025 Strategic Plan. The Utility has undergone a review of its governance framework, adopted a new investment framework, and is in the process of developing a risk management framework to continue to support its strategic priorities. The Utility continues to look at growth and investment opportunities in the unregulated business – Wasaga Resource Services Inc. (i.e., the non-utility), and investments are being made to support the growing needs of the regulated business – Wasaga Distribution Inc.
In 2022, the Utility declared the largest dividend ever of $480,000 and provided an interest payment of $135,000 on the outstanding promissory note to the Town of Wasaga Beach.
“Wasaga Distribution Inc. has not grown and has actually stagnated, gone backwards and lost substantial value since 2018”
This statement is incorrect.
The value of assets in service and the financial operating requirements to support the delivery of electricity to its customers (working capital) – effectively called the Rate Base is representative of the growth in value of Wasaga Distribution Inc. Since 2018, Wasaga Distribution Inc.’s rate base has increased from approximately $14 million to $21 million a 50 % increase.
The rate base is still the prime indicator of a utility’s value. There is no indication that this has changed.
“If the town were to offer Wasaga Distribution Inc. for sale today, it would have to be a fire sale as it is no longer the “gem” it once was.”
This statement is incorrect.
Recent investments being made by Wasaga Distribution Inc. have increased the capacity to deliver electricity through the distribution system by approximately 20%. Wasaga Distribution Inc. continues to make investments to support the new development on Sunnidale Road and around the Community. Wasaga Distribution Inc. continues to build redundancy within its system to improve and maintain reliability while being able to accommodate thousands of new customers.
Wasaga Distribution Inc. continues to provide the resources needed to maintain and improve the distribution system to meet the future needs of the Community and its Customers.
Wasaga Distribution Inc. has some of the lowest residential rates and is considered one of the most efficient electric distribution utilities in the province. It continues to be a gem. Over the last few years, Wasaga Distribution Inc. has become better positioned for the future to support growth and infrastructure renewal.
“Hydro One informed us that Wasaga Beach was their preferred central location for a large new District Service Centre”
On December 7th, 2015, The Boards and Town representatives attended a session with Hydro One that discussed the potential for a centralized regional operations centre within the service territory. Hydro One never made an offer at that meeting and there was no offer presented in writing to the Shareholder. Hydro One never informed the Boards that Wasaga Beach was a preferred central location and there was never any follow-up.
“The size of all 4 boards averaged about 6-7 board members in total” and this former officer further states “In 2018, many of the existing board members were just simply let go! Almost immediately the size of the Hydro Boards tripled”
In 2019 the Town of Wasaga Beach adopted the Shareholder Direction By-Law No. 2019-35 and repealed By-Law No. 2000-65. It’s correct to state that before 2019, the Boards in their entirety consisted of 6-7 board members. The amended By-Law set the requirement that most of the members of the Board shall be independent of any other affiliated entity.
The amended requirement is good corporate governance practice and necessitated the need to reduce the multiple appointments of members to each board.
It is important to the Utility and the Shareholder that the Boards can exercise diligence and independent judgment.
Lastly, comments on confidential Human Resource matters that this individual has brought up are private and protected. The safety, corporate culture, and well-being of all staff are the single most important thing to me. Our staff is our biggest asset to the Utility. The relationship with all our Stakeholders is as important.
I encourage and welcome anyone to contact me directly if you have any questions. It is important to remember to get your information from the source. I welcome anyone to stop in and introduce themselves and I will make myself available.
President & CEO