Transcript - Alectra Rate Rebasing Discussion - Hamilton Utilities Corporation Shareholder Meeting

Alectra Rate Rebasing Discussion - Hamilton Utilities Corporation Shareholder Meeting - April 7, 2026

Sound check. 1 2 3. Sound check. 1 2 3. All good, Danny. I heard that. Good morning. Welcome to the Hamilton Utilities Corporation shareholder meeting of April 7th, 2026. As we have quorum present for today's meeting, I'd like to call this meeting to order. A reminder that all electronic devices are to be switched to a non-audible function during the committee meeting. In chambers today, we have councelor Bey, councelor Cooper, councelor M. Wilson, councelor Wang, councelor Casar. Online we have councelor Pauls, councelor Clark, councelor Nan, councelor A. Wilson, and councelor Matt Francis. We're going to the approval of the agendum of the agenda. Madame Clerk, can you advise of items included in the addendum? May I please? There are no uh changes to the agenda. Deputy Mayor, thank you. May I please have a mover and second to approve the agenda as presented? Councelor Wang, Councelor Casar. Is there any discussion on the agenda? Not seeing any. All in favor? Hand vote. That clears. Thank you. Are there any declarations of interest? Looking around. Not seeing any. We're looking to approve the minutes of the previous meeting and that was August 27th, 2025. May I have a mover and seconder to adopt the minutes? Councelor Wang, Councelor Casar. Any discussion on those minutes? Not seeing any discussion. Moving forward, all in favor? That was carried. Items for information. We have 7.1 electra management presentation upon update on electra rebasing and sustainable financing processes. This is Julia Camila, chair of Hamilton Utilities Corporation and Jeff Cowan, chief executive officer of Hamilton Utilities Corporation. And they'll provide an introduction to the presentation. Can we um get a motion to extend that for five minutes? Councelor Wang, Councelor Cooper. A hand vote. That's unanimous. The presentation will be extended. I guess uh I've got a note here. I'm trying to read here. Okay. Take it away, sir. Hi. Good morning and uh through the chair. Good morning, deputy mayor. Uh good morning, counselors. Good morning uh city staff, those in attendance. I'm Jeff Cowan. I'm the president of Hamilton Utility Corporation. And joining me is Julia uh Cumula, the chair of Hamilton Utility Corporation. As well as that, we have several of the Huck board members uh joining uh us online as well. Um just before introducing Brian uh we viewed it as being uh timely ahead of the Huck uh June uh AGM uh to have uh Electra come and uh uh provide an update uh regarding their rate application rebasing uh process that's currently underway uh with the Ontario Energy Board uh as well as to provide us a current view into their sustainable uh financing uh process that's underway. And without further ado, I'd like to uh uh hand the floor over to uh Brian Bentz. Thank you. Thanks, Jeff. And good morning, everyone. Um we're pleased to be here to present to members of council and the cedar senior leadership at the city elector's recent activities uh over the past six months or so. In particular, as Jeff mentioned, uh we're going to talk about our rate rebasing application that is currently before the Ontario Energy Board. Um our sustainable financing plan, which allows us to provide um sources of debt and equity capital over the next 10 years to fund Electra's growth. going to speak to a capital update, what we've spent in the city of Hamilton, how much we've spent and where we've spent it uh over the course of the last year and what we project to do in 2026. We want to provide um some update on reliability. This is measured by the the our outage indices uh which are measured and and monitored through the Ontario Energy Board. We've seen significant improvement since the merger in the city of Hamilton in our reliability indices and we want to outline that. We want to talk about some of the active projects uh in the city that relate to electricity infrastructure and then end with um some discussion around community support initiatives that we have. So it was uh 10 years ago almost when the uh merger of the of Enerource Horizon power stream subsequent acquisition of hydro and Bmpton and then merger with G hydro occurred. Uh we made an application to the Ontario energy board at that time and part of the application included what's called a rebasing deferral period which was for 10 years. So in uh rate making um parliament you you rate base is the capital that's approved by the regulator that you can recover from customers. We haven't done that in 10 years. We've had inflationary increases. um our rates are relatively low compared to our LDC peer group, but in in January 1st, 2027 will be the first time in 10 years that will actually rebase the capital rate base for Electra. And part of this rate application, it's called a custom IR, is it's for it's for a 5-year period starting in 2027 and ending in 2031. We expect to see a significant uh increase in capital spend over that period. And our current capital spend uh average net capital is about $350 million a year. And that number will rise to almost $800 million a year by 2031. And the the total capital spend is in the pie chart on the right hand side and it's $3.1 billion of capital over that period across our entire service area. We serve 1.1 million customers and almost 4 million people in the province. And there's three areas that uh that um make up that 3.1 billion. If you look at the top right hand corner, you can see 1.8 billion. That's for renewing and replacing aging infrastructure. So this is things like uh poles, transformers, underground cable that are nearing end of life that need to be replaced within our service area. There's provision for that within this capital plan. The second is uh meeting growing electricity demand. So um this is system expansion. So things like the her the Hamilton LRT moving infrastructure for that case adding new customers uh we expect to add almost 158,000 new customers over that period 2027 to 2031 that's almost almost like adding another city of Hamilton to our grid. So there's significant load growth there. There's load growth with respect to data centers and electric vehicles and we have to build capacity to do this. So in order to do that you build what are called transformer stations, large power transformers that connect to the transmission grid and supply more electricity to the communities that we serve. So that that um um bucket is about $1 billion. And then finally we have uh 300 million and this is really more for um enabling resiliency in our in our system. Um so storm hardening and putting intelligence into our grid as well. Our meters are at end of life. So there's a provision in there for next generation AMI advanced meter infrastructure or smart meter technology to put those in uh on our system as well. So that's the component. Um we're in the process of uh adju having that application adjudicated with the Ontario Energy Board and we expect a decision in the fall for rates effective January 1st, 2027. When we look at the rate impacts um on the um electricity customers in the city of Hamilton of this application, they're shown here in this chart. We have five rate zones in Electra and that's really the five predecessor utilities. They all have they're fairly close but they have modestly different rates. So G would have a different rate structure than than Hamilton the Horizon rate zone which is Hamilton and St. Catherine's which is different than the Ener source and city of Missaga. As part of this application, we're we're required to file what's called a rate harmonization plan, which converges those rates to one rate. And our goal is to converge those rates over time. Um when we look at the chart, you can see this is the average impact on the residential customers. The top left corner, um you can see average AU customer. So that's across all five service zones. The average increase would on the monthly bill would be $2.33 per month, which is a 1.7% increase on the entire bill. For the Hamilton rate zone, uh the the uh the rate impact is lower. So they're so the Hamilton customers are getting benefits from the um the harmonization of the rates. And so their rate impact is $212 per month or 1.5%. Similarly, when we look at our general service customers less than 50 kilowatts, these are uh would be like strip malls etc. uh their impact is 1.3% and then the larger commercial customers their impact is 0.4%. Or 0.4% average impact over the 5year period. post merger uh elect as I mentioned elector's rate rebasing was deferred for 10 years um what we're seeing as as I mentioned is there's going to be significant increase in electricity demand across Ontario the ISO independent electricity system operator forecasts electricity demand for the entire province and they're saying that it will increase by uh up to 75% By 2050, Electra is about 20% of the province. So we expect to see an equivalent of 53 terowatt hours by 2050 and a doubling of our peak demand. We're about a 6,000 megawatt or 6 gawatt peaking utility. That could go to 12 to 13 or 12,000 to 13,000 megawws by 2050. So, some of this what's what's causing this this increase in demand? Um, we expect by 2031 to have over half a million electric vehicles on our grid. We have about 80,000 today. We expect that to increase to half a million by 2031 and 1.5 million by the end of the decade. Um we see significant increase in data center load that can be up to 1,00 2,000 megawws 20 25% uh increase over our peak demand today and as I mentioned we expect to connect uh over 150,000 new services residential commercial and industrial services across our service area over over that time period. So as we as we increase uh our capital spend what we it's important that we maintain our capital structure. Utilities are financed and regulated capital structure 60% debt and 40% equity. As you increase your rate base as you increase your capital spend um you have to maintain your capital structure. We raise debt in the capital markets. Um, and uh, you know, there's a there's a strong appetite for the bonds that we issue. They're typically four to five times subscribed. If we did a $200 million bond issue, we'll get $800 million of asks to buy those bonds. But on the equity side, uh, we need new sources of equity as well. And the source of equity is the municipality. The only source of equity is the municipality. So we're looking at options to say are there other if the municipality cannot fund the equity required for example the equity required for Electra over the period 2027 to 2031 is about $1 billion of new equity to maintain that 6040 capital structure. If the municipality cannot provide that, are there other sources of equity capital that will maintain our governance model, community support, our rates, reliability, but still be able to fund? So, we're looking at things like pension funds uh to potentially help fund our growth and allow us to uh make the necessary investments in the capital infrastructure, maintain dividend flow, the municipalities and and grow out our system safely and reliably. The government of Ontario recognized this issue. the Minister of Energy, uh, Steven Leche, uh, he he wrote an op-ed in the, um, Financial Post last October and said it really addressed this issue that, um, municipal utilities require new sources of equity funding or their capital structure will be at risk. So to that end, they um, they formed a panel. The panel was called the panel for utility leadership and service excellence pulse panel and it looked at ways of um supporting this what we call sustainable financing model and one of the ways that they looked at it was provide they are looking at it is by providing tax relief on a potential increase in non-municipal ownership in uh LDC's. There's an existing rule that says that if you go past 10% non-municipal ownership, there is you trigger a capital gains tax. We're looking for relief from that tax so that we can increase potential investment beyond 10%. Just so you know, Electra is currently owned 3% by pension fund. Um, and if that were to increase to 15 or 20, you would pay a significant tax once you pass 10%. We're looking for relief on that. It's called the departure tax. So, that's part of the review, the main part of the review of the Pulk panel and we're working with the government on on um ways of uh providing that relief. Uh with respect to capital investments, in 2025 we invested 58.7 million and delivered significant capital renewal projects and upgrades impacting customers in Hamilton. In 2026, we plan to continue targeted investments and significant capital in the city, including replacing aging infrastructure as I mentioning poles, transformers, switch gear. Modernizing these elements will help minimize disruptions and improve the reliability of Hamilton's energy grid for residential and commercial customers. We're connecting new customers, accommodating growth and economic development in the city, replacing and rehabilitating underground cables, and deploying uh net new automated devices, mostly automated switching to enable swift response to grid disturbances, optimizing performance and minimizing the impact of potential disruptions in the community. Um, we propose to increase capital investments in the city over that period. Talking about the rebasing period, 2026 to 2031. We plan to invest almost $700 million of uh of investments in in the city of Hamilton to renew and modernize the electrical infrastructure over the 5-year period to also support system capacity and development in the community making the grid more resilient and um better able to um withstand extreme weather events. This was the reliability was talking about earlier. So on the left if you look at the chart the left hand side this this shows the average number of minutes uh so the number of minutes the average customer will see on the grid in a year. So 8,760 hours in a year it's 120 minutes you can see on the left hand side it's about two hours. Uh the the dark green bar is the the uh city of Hamilton outage indicy and you can see that in 2018 post merger it was around 2 hours. Over the course of the last seven years we brought that down to uh the average of the electric system. The the electric system is the lighter green one on the right hand side. You can see that's come down too to below an hour. But through things like automated switching, looping our system, looking at uh pin insulator replacements, um the the lateral feeder fusing, replacing old porcelain insulators, we've been able to significantly increase the reliability of the uh of the power system, the low voltage power system in the city of Hamilton. and we're going to continue to make those investments over time. With respect to active projects, um they have the Hamilton LRT. Uh Metro Links has invited four consortiums to submit proposals on the 14 kilometer LRT route. We have to move our polls and infrastructure at in order to allow that LRT to happen. Our total spend in in uh in 2025 was $10 million on that project. Um and uh so we're starting to move our infrastructure to enable that um that LRT to be put in place. Uh we have the MTO highway 5 and six interchange project. The overall project cost there is 26 million. Um the spend in 2025 was tw 12 million. We've comp completed all civil pole structure work um in in that intersection putting in micro tunnels 48 poles 16 km of underground cables nine switch gears 5 km of duct structure so a lot of electricity infrastructure to enable that that interchange project. Other large projects is 354 uh King Street downtown, 26-story uh multi multi-unit rental building designed by SRM architects uh and a 12story hotel. Uh so again providing the the electricity infrastructure to support that that new um that new building. Sucro Canada has announced plans to build Canada's largest sugar processing plant. Uh the facility opened on Ferguson Avenue in 2025. Um and so we're supporting that. We have P&H Milling, family-owned agricultural business, uh committed an additional 600 million to expand their mills in Hamilton. We have a 10V 10 MVA electrical load that we need to supply to that site. And 281 Birch Avenue is the Hamilton Transit bus maintenance storage facility. That's another 10 MVPA of electrical load that we'll be supplying. And finally, u our community support. In 2025, the electric cares community support program touched many frontline agencies and institutional partners within the city. We put a priority on food security issues, housing support for youth and families, and mental health programs in disadvantaged communities. Our total investment in community support programs in Hamilton totaled approximately 27,000 for the year. This included support for the temporary outdoor shelter at Barton Tiffany. And this investment has been renewed for 2026 as we continue to support frontline social agencies uh in the city of Hamilton and our uh corporate levels of volunteerism very proud of. they're very high and uh you know just showing that we want to give back to the communities that we serve and uh with that madam chair that's our report and happy to take any questions. Hey thanks Brian uh sorry deputy mayor there we go um we're going to look to the questions and first up we have councelor M Wilson. Thank you. Good morning and thank you very much for that presentation. I'll apologize in advance for the simplicity of my questions. I'm just trying to understand uh to ensure that I understand kind of the the broad strokes of this exercise and some of the externalities um that are informing for example Minister Liuchi's comments. Um so rebasing is an exercise where you account for actual costs. You submit that every five years to the OEB uh and that informs the rate the permission for the rates in which you wish to charge for your um category of customers. Do I have that generally right? Yes, that's correct. We we we file what's called a distribution system plan which forecasts our capital requirements. Uh there's about 3,000 pages of evidence to support that capital plan. It's adjudicated by interveners, but yes, in effect, it's a five-year plan that shows the capital spend in our service area. And the OEB uh tells you whether that is reasonable, prudently incurred and whether you can charge that back in the form of depreciation primarily to uh our customers and rate payers. Okay. Thank Thank you for that. So I'm I am just trying to understand um a a comment. Uh you began by saying um the rates are historically low and then you near the end of the presentation there was reference to we have a a system that doesn't have the capacity to um support where we think we're going as a a province. So I'm trying to understand is do you have to submit something through the chair every 5 years and was the previous low rates based on a plan that was previously submitted to the OEB? Um they were based on on plans that were previously submitted to the OEB. So we've had capital plans through the last 10 years to support our grid. But you know I would say that we've underinvested compared to our peer group. So this is where we need to and that plus the fact that um that we have these forces I'll say of electrification data center loads EVs organic growth. We have to be able to have sufficient capacity to support that growth within the communities but also rebuild our system. You can see over time though that you know our reliability indices are strong. They've actually come down. So, but but we have to stay ahead of the investment um or you know we'll we'll start to see um we'll start to see that number push back up in terms of the reliability and uh and our ability to um enable growth within the communities. Yeah. Thank you. I understand. Thank you. That's very helpful. Um, so I am just trying to understand then the acknowledgement that there was uh an underinvestment compared to peers. Why was that? Um, I think some of it is our u some of it is our natural efficiency. So we brought five utilities together and uh we did derive significant efficiencies by bringing five utilities together. um just reduction in operating costs, reduction in capital costs. Um some of it is that you know our peer group historically has spent more than us. So you know for example I mentioned 350 million net capital spend in electric service area. City of Toronto has fewer customers than us. They spend between 5 and 600 million a year on capital. Hydro 1 has about we have 1.1 million customers. Hydro 1 has 1.3 million. They spend about a billion dollars a year on their capital needs. We're spending 350 million. So as I said, I mean I think we're running a um you know in terms of our reliability, our ability to leverage technology, uh our ability to manage growth, it's been strong. We want we just want to maintain that. But when you compare it to our peer group, we are lower. Thank you. If I have a time for an additional question, 25 seconds. Oh, thank you. Um could you just explain to me um what is your um hypothesis on the you talked about you're anticipating EV vehicles to go from half a million to 1.5 million. Um what is what are your thoughts on the data centers? What's your what's your thesis? We have um currently so we're as I mentioned we're 6,000 megawatt peaking utility. The province is about 20,000. So 18 to 20,000. So we're you know that's relative percentage. Um when when we look at data center applications we have 400 megawws of active uh I say approved data center load so on you know it's about 7% there's another at least a thousand megawws of in the in the queue whether they're real or not I guess we'll see but there's a lot of requests to connect data center loads in our service area. And so, you know, if you took a even a,000 megawws on or 1,200 on 6,000 megawatts of peak demand, that's 20% increase in peak demand just on data center load. That's that's significant. Um, and just FYI, the 500,000 500,000 plus EVs, um, unmanaged is about 2,000 megawatts of peak demand and managed using intelligent charging, etc. that you can cut that in half to a,000 megawws. I I'm sorry. I just want some clarity on the assumption on the data centers. I've heard 400 megawws. You have another 1,00 in the queue. I'm just just trying to understand what what your thesis what your estimate is. Not clear. About a thousand megawatts over the forecast period. Okay. Thank you. I I um I would like to go back on because I have a question about reliability. Thank you very much. Certainly. And just for those um we have a populated list currently. It's councelor Wang, then councelor Cooper, then councelor Clark, and then councelor M. Wilson will be the next person to ask questions. So, we're going to councelor Wang now. Thank you, Brian, for your presentation. Um, I have several questions. One of which I'm going to ask a very targeted question is around reliability. uh part of your slide three you talked about reliability and I do see uh the reasons for sorry for the reliability aspect but I don't understand where are we securing our grid because I think that there's a challenge when it comes to security of our grid so I wonder if you could speak a little bit about that yeah um so you know the privacy of of data is paramount and customer information is critical um risk uh for a utility and something we we are actively monitoring and um making sure that that risk is minimized. We saw what happened with um Nova Scotia Power. They had a cyber breach and customer data ended up on the dark web. uh we are very active in terms of our cyber defense posture and um I'll say isolating and securing all customer information so that it's protected from uh cyber attacks um you know you do everything you can in terms of best practice and continue to monitor um and improve and so I just want to assure the council here our shareholder that we're very active proactive in terms of our cyber defense posture and protection of protection of customer information. So that sounds like it's also part of the electro strategy in terms of grid modernization. Correct. Yes. Exactly. Yes. Second question is around just wrapping our heads around the big numbers that you have in your presentation. On slide five, you talk about 103 to 120 billion dollars in cumulative gross capital additions. That's across the province. Is that correct? Yes. On distribution infrastructure only. Okay. However, electors only looking at 3.1 billion. And then you also mentioned in your comments about Hamilton with a projected up to 1 billion. Could you just clarify those numbers for us, please? Yeah. So the 3.1 billion is the spend to 2031. The 103 billion is to 2050. So when we look at say 2030s and 2040s, if you took, you know, let's let's say 800 million a year, say a billion a year, it'll probably average that. That's another 20 billion. So now we're up to 23 billion on the 100 which electors about a quarter of the province. So then that's that's the high level back of the envelope math on that. Hope that makes sense. So so Electra would be about a quarter of that. By 2050 we will spend 23 24 billion in capital. About a quarter of it. The $1 billion is the if if we if we get our capital approved and we want to maintain our 6040 capital structure. We are rated by three credit rating agencies uh DBRS, S&P and and Fitch. And they rate Electra. It's it's a rated now. But if we have to take on more debt to finance this growth and not provide that 1 billion of equity, our debt to capital structure will increase beyond 60% and you get a ratings downgrade. And so your cost of capital, your cost of debt will increase. So we want to maintain that capital structure so that our our borrowing costs remain what they are and and also that we can finance the growth to make the necessary investments into the grid. Okay. Thank you. My last question is as it relates to financing and the sustainable financing uh slide that you had listed out, what is Electra doing right now um to explore all of these options? what is the actual sort of plan to actually get something in front of this council so that we can be better prepared um given the numbers that you've just given us. So we have established a um an oversight committee, finance committee and a governance committee with representatives of our shareholders including AK and the city of Hamilton to and working with all of our shareholders to explore these options and look at alternatives, look at what makes sense for the for the municipalities in terms of as I said before their their governance rights, their economic development, keeping rates low, uh maintaining reliability, but also being able to have a sustainable financing model to fund the growth. We're reviewing that now with all of our shareholders, and we want to work uh with obviously the the Huck and the City of Hamilton over the course of the next year on uh the deliberations of that oversight committee. the finance committee, the governance committee bring it back to you for consideration so that a decision can be made. It would likely be after the October election uh in Q4 and into Q1 of next year, but there would be further updates over that period before we make a final decision. Excellent. Thank you. Thank you for answering that. That was going to be my next question in terms of like time frame, timeline, that sort of thing. Thank you very much, Brian. Thank you, Councelor Wang. We're going to councelor Cooper. Thank you, Chair. Thank you, Brian, for your presentation today. Um, just to take a little bit of step back in time, when we set out to put these five municipalities together, what were our strategic objectives? The objective primarily was one of cost reduction. So can we bring five utilities together and reduce their uh consolidated operating costs by in at that time it was about 16%. So $1 and $6 can we can we take that out and then that those benefits would acrew to rateayers and they would acrew to shareholders through higher dividends we have filed. So $50 million was our run rate expectation on synergies. We have filed evidence with the Ontario Energy Board in this current rate application that shows $47 million of real cost reductions, not cost avoidance occurred. And would you say that the integration of the five utilities now complete? Yes. Yes, it is. The systems are converted. Cultural transformation sometimes takes longer but system conversion and um the core you know foundational systems the operating infrastructure yes that that has been completed. When I look at just the map that you had here the five municipalities they feel very disparit okay a lot of geography in between them. So it raised the question in my mind are we going to continue doing mergers? Do you have a strategic plan to continue to merge with other municipalities or what does all that look like? We think that you know part of our core competency is bringing utilities together to reduce costs for all um and to bring scale. Um I think you know we we have good competencies on post merger integration. So knowing how to, you know, um execute on that where it makes sense, I'll say on a case-byase basis within the GTA. Um and there are, you know, we recently announced the um the acquisition of New Market T Power in New York region. Um that if it makes sense, it's a creative to our shareholders and it enhances our reliability and and rates for our consumers. We will continue to pursue consolidation in the GTA. Would that not also be a strategy to address your debt equity ratio challenges as well? Uh it could be. Yes. Um go ahead. Sorry. Yeah. I mean it could um you know to the extent you can get scale um can you get cheaper cost of capital potentially. It does you know there is equity required to fund these transactions but the equity required to fund these transactions first of all they are value accreative and secondly for example the um the new market T acquisition was less than 3% of the total capital need so it doesn't really impact the overall equity requirement of Electra and it is value accreative. Yeah, ju just uh um I guess looking at the spirit geography, looking at some of the challenges having debt equity um as you start to bring back and and uh iterate through this. I'd be interested in seeing, you know, what some of the options were. I mean, we talked about, you know, going out and getting other shareholders, we talked about, you know, uh changes to um I'll say legislation. Um I I'd be interested to see like if mergers were one of our key strategic priorities that got us to where we are now. Uh you know and if we're walking away from that because we're saying well you know there's not a lot of value left. I mean just looking at your disparit geography there seems to be some at least cost reduction uh value there and I would argue that I could see a path where it could also address your debt equity challenges. Right. And so that's why I'm kind of surprised that we're having the conversation we're having today without a focus on continuing to merge because this was our original, if you want to say, strategic direction. It almost feels like we're walking away from it. It's still part of our strategy and it will be considered as part of the broader review. So when we come back in the fall and later in the year, we'll we'll bring that that issue forward again. Okay. Thank you. Thank you. Just just another question as well. Um, in terms of water billing, I mean, we just had something where, you know, we've got that offloaded to the city here in Hamilton. Now, is that part of your overall direction as you go through with these mergers where water billing is part of the overall, I'll say, billing package that Electra inherits, buys, acquires, is the idea to continue to offload this or is this just a one-off in Hamilton for some reason or just what's your strategic direction around that as well? Um on the water billing we do have an affiliate that can provide those services. Um we would be you know amanable and part of our strategy would be to um have that affiliate where where it makes sense to provide those water building services to municipalities if they can. Okay. Thank you. Thank you councelor Cooper. The last person on our populated list is Brad Clark. Uh, Councelor Clark, you're online and uh, ask your questions now. Thank you, Deputy Mayor Tatis. Just just a few questions. I heard a few times uh, that they were comparing themselves to their peers. Who are the peers that you're comparing your capital and operating costs to? Yeah, we compare ourselves to um in in one case the the larger utilities. So that would be Hydro 1 and Toronto Hydro, but also I'll say the midsize utilities. So you have Grand um which is um Brand County and Cambridge, uh Oakville, Burlington, Grimby. Our rates are we're we're in the lower quartortile in rates. If you compared there's about 50 LDC's in Ontario, we're in the lower quartortile uh in terms of the distribution charge. So with our peer group there is a the larger utilities there's a significant delta on the distribution rate. on the um you know the I'll say the midsize utilities it's uh it's not as dramatic but relatively lower. Is one of the goals then to maintain affordability? Yes. So the fact that we're at the low end is that considered a positive or negative? It's a positive for consumers because you know effectively um the example we give we're about say $52 a month for an average residential customer the distribution charge the hydro1 rate is $62 a month for the to deliver the same energy. So $10 a month, $120 a year lower rate for a consumer, for an electric customer versus a Hydro1 urban customer. In terms of electricity uh generation, it is now mostly water or natural gas. Is that a correct statement? Um the primary source of electricity in Ontario is is nuclear. Okay. Yeah. is there and natural gas is there some renewables but it's primarily nuclear. Do you do you and this is an an unfair question but I'm going to ask it anyways. Do you have a rough idea of the breakdown percentage-wise of natural gas versus nuclear in in the province? Uh in terms of the installed capacity or the price? Um in terms of the capacity. Oh. Um, we can get you that. Um, yeah, the installed capacity in the province is around 30,000 megawws. I'm going to say half that is nuclear, you know, and you know, gas 6 8,000 maybe. I but I'll check. So given those ratios, is there any trepidation with regards to the spikes in um natural gas markets around the world as a result of the war in Iran? Um there there would be some short-term spikes in the there, you know, the there is an hourly Ontario energy price that's set by the ISO every five minutes. It's called the market clearing price and typically gas sets that price. So I would imagine that in the near term there'll be higher cost per kilowatt hour on that market clearing price. That price gets folded in to an average residential price for customers every 6 months by the OEB. So it's smoothed out. But yes, there's probably some short-term increase in um electricity prices due to spiking you know natural gas prices. So then deputy mayor Tatis and I'm to take from that that the increases in natural gas pricing around the world there are some countries right now that are showing 75% increase in Asia Europe is over 75%. Um it does not simply affect the users the rate payers for the electricity that is being produced by natural gas it gets averaged into the overall price across the province. Is that Yes. Yes, that's correct. And and in that mindset, given the ratios, um we would be in better shape than other um providers in North America. Yes, we we have a 90% decarbonized grid that you know is as I said largely nuclear with lot significant renewables um relative to other jurisdictions largely decarbonized so the exposure to fossil fuels in our electricity pricing is lower than most jurisdictions. Thank you. That brings some comfort to folks. Thank you very much. Thank you councelor Clark. Are there any more questions? Not seeing any. Thank you to Julia, Jeffrey, and Brian. Oh, Councelor Wang, you want to go on a second time? Okay, Councelor Wang. Uh, thank you, Deputy Mayor. Uh, just a question around back to reliability. Um when it comes to Electra being the distributor uh how flexible are we about exploring new in innovative infrastructure projects? I'm thinking about the industrial north end there has been talk around uh waste heat recovery and those those are very new innovative exciting type projects. Is the elector positioned to be able to be nimble enough to support those types of projects? Absolutely. Uh part of our strategy is around innovation. We have a green energy and technology center and innovation hub in G. We have Electra Energy Solutions which is our non-regulated arm which deals with things like uh behind the meter generation, co-generation. Uh we're talking to uh you know parties that are looking at um revitalizing the uh the old Stelco site and how can we how can we help make that happen from a grid supply point of view but also behind the meter and integrated solution a lowcarbon integrated technologically advanced solution. So the answer is yes. Excellent. And I know that that was listed in your most recent strategy update. Just wanted to give a sense to council and committee that there has been opportunities with looking at alternative energy generation as well. Um and it allows for Electra to potentially uh diversify all of the different revenue streams. Is that correct, Brian? Yes, that's correct. Okay. any um sort of additional commentary when it comes to those types of capital investments because I know that those don't fit into the mold of what we're asking for in terms of like the sustainable financing. Those become a separate sort of line item in the in the accounting books. So I wonder how does Electra account for those types of innovative projects uh that are separate and distinct from the ask here today? Yeah, so Electra utilities we have Electra Inc. which is the holding company. Electric Utilities Corporation is the licensed distributor. So that's the poles and wires business that delivers from the transmission grid to the meter base. So one way we're doing that is trying to appeal to the regulator to say we shouldn't just be a poles and wires business. We should be an integrated energy services provider. So basically integrating customer solutions whether it's demand response or storage or behind the meter generation solar geothermal and allow us to include that into our into our costs because we can avoid we can avoid distribution capital by having these innovative solutions at the grid edge. uh so work working with our uh regulator and other partners on that is one way. The other way is through our affiliate business. So the sister company to AU is energy electro energy solutions and then that provides um that can provide commercial solutions directly to customers. So that we could provide we do work for the GTA for example. We do work with uh limit linomar we own behind the meter generation with automotive parts manufacturer. So whatever we can try and do to pro to provide solutions behind the meter AES can integrate those solutions with AUC. So that's our high level strategy. Excellent. Thank you. My last question is as it relates to the pulse panel um that there was a report submitted to uh Minister Leche. When do we expect that report to come back? So then that way uh this council and committee can see it. I mean it it has been delayed was expected to come out before this budget. I would say now a reasonable expectation is before the fall economic statement uh in o September October is when we'll likely see it. We'll we'll keep you informed as we move through the process. Thank you very much. Those are all my questions. Thank you, Councelor Wang, and thank you to Julie and Jeffrey and Brian for your presentation. I'm not seeing any more questions at this time. So, may I have a mover and second to receive the presentation for 6.1? Councelor Wang, Councelor Cooper. All in favor? That's a hand vote. That's unanimous. Thank you. Thank you. Thank you, Brian. We're moving to 8.1. resolutions of the sole shareholder of the corporation. May I have a mover and seconder to put the shareholder resolutions on the floor. Councelor Wang and the mayor. Is there any discussion on the resolutions? Waiting for my list to populate. Not seeing anybody reach for their button. So, I'm not seeing any discussion on these resolutions. So, we'll now require an electronic vote. Please indicate your vote when it comes up. Counselor. Yeah. Councelor Jackson is a thumbs up. Coun the mayor is a thumbs up. Councelor McMaken is a thumbs up. Yep. And everybody else is voting. Okay, that vote is up. Councelor Clark, did you put your thumb up? Yes. Thank you. That carries 13 to zero. Thank you. I do have councelor Wang on the speakers list. I'm not sure how to handle that because it's not in my but councelor Wang, you have the floor. Just wanted to thank uh Sean Donnelly for his service and the fact that we have now uh put him back onto this board because I think that this council requires that level of steadyhandedness and as well his uh his expertise really because he's also um really quite influential on the board. So I'm really thankful for Sean um to uh put his name in again to be representing us at the elector board. Thank you. Thank you for raising that. At this time, there are no more issues before us. So, I call this meeting adjourned at 10:25 April 7th, 2026. Thank you.

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