Entegrus Powerlines made its official proposal to merge with St. Thomas Energy at Chatham-Kent's council meeting on Monday.
The merger will unify the two utilities to form MergeCo. serving as the energy provider for Chatham-Kent, Strathroy, and St. Thomas.
During the meeting, Entegrus CEO Jim Hogan presented the benefits of the merger, which include more opportunities to invest in innovation, technology, and resources. He also argued that while the merged energy companies will still be locally-owned, there will be bigger regional diversification for the utilities.
When asked why he decided to go forward with merger, Entegrus CEO Jim Hogan said it was actually St. Thomas that approached him.
"St. Thomas was the one that stepped up and said they wanted to partner. They looked around at about six partners I believe, and they determined that Chatham-Kent was the best partner," explains Hogan.
He said the City of St. Thomas believes it is going to be a very successful investment.
One concern that has been expressed by the public is the merger causing and increase in hydro prices, but Hogan said locals will actually be saving money in the long run.
"There will be no price increases related to this. In fact, over the long run we expect it to be reduced because if you have two people doing the same thing, over time you don't need them doing that, so there will savings flowing through to the rate payer eventually," said the CEO.
Entegrus Powerlines is valued at a $126.2-million, while St Thomas Energy is valued at $32.3-million.
Representatives of the energy company will return to Chatham-Kent council June 5 for a final recommendation to approve the merger. If approved, the merger will likely take place in January 2018.