City Council as Shareholder of GMHI

17:59We ready? So I'm going to call to order the meeting of City Council as the shareholder

18:06of Glow of Municipal Holdings Inc. And we have the agenda in front of us. So first of all,

18:13is there or are there any disclosure of pecuniary interest? Seeing none. Could I have confirmation

18:22of the open minutes from April 7th held 2026. I had to read look at that and make sure it

18:31was from last year. Councillor Busuttil. Any questions? Seeing none. I'm going to go to

18:41the vote. Is anyone opposed? No one opposed. Thank you. That passes. So the items for discussion

18:48then. We have the annual report and financial reporting to the shareholders in front of

18:54us. And we're going to have a presentation first with Stephen O'Brien, Justin Wee and

19:00Jane Armstrong. Thank you very much, Chair Downer. And good afternoon to members of Council.

19:10Thanks for having us and we appreciate the opportunity to share some updates on GMAIs

19:17at our AGM and also to hear from our colleagues at Electoral represented by Ms. Armstrong.

19:24Today, Council meets as representative of the city in its capacity as the shareholder

19:29of GMAI, Guelph Municipal Holdings. I'll use the GMAI acronym for short. My name is Stephen

19:36O'Brien. I'm the city's Deputy CEO of Corporate Services. I'm also a director on the GMAI

19:41board with me today. As you mentioned, Chair Downer is Justin Wee. Justin is the GMAI's

19:47Chief Financial Officer, but also the city's Deputy Treasurer and Manager of Financial

19:51Strategy and Reporting. You'll also hear from Ms. Jane Armstrong, Director and actually

19:57Board Chair of Electra and the city's appointee to Electra. For those in attendance today

20:05who may not be familiar with the corporate structure, GMAI is a municipal holding corporation.

20:10Its purpose is to hold an equity interest in the securities of other companies. Presently,

20:14GMAI owns 4.63% of the issued and outstanding shares of Electra Incorporated. GMAI creates

20:21financial value to the city through its equity holdings and dividend returns. As at December

20:2731st, 2025, GMAI's investment in Electra is valued at $115.7 million, an increase of

20:34$7.1 million over 2024. The increase in value represents GMAI's proportionate share of

20:41Electra's earnings, totaling $10.8 million, reduced, of course, by the dividends declared

20:46and paid to GMAI of approximately $3.6 million. GMAI's total comprehensive income in 2025

20:54was $10.1 million, compared with $7.5 million in 2024, an increase of $2.6 million year

21:01over year. The favorable change is a result of higher net comprehensive income of Electra

21:06in 2025. In 2025, GMAI received $3.6 million in dividends from Electra, which was a slight

21:13decrease compared to prior year dividends of $3.7 million. Overall, GMAI has continued

21:21to be a contributing asset for the city. The city's net income from GMAI in its 2025 financial

21:27statements totals $10.8 million, and the city recognized a gain of $7.1 million in its investments

21:34in GMAI for 2025, and as I said earlier, GMAI paid $3.7 million in dividends to the city.

21:42I will wrap there. It is a pretty brief presentation in terms of the GMAI side of things. Perhaps

21:49we'll hold questions until after Ms. Armstrong's presentation, but with that I will turn it

21:55over to Ms. Armstrong to deliver her remarks. And we have that presentation coming up as

22:02well.

22:07Thank you. Good afternoon. And thank you for inviting me to speak to you today. I'm happy

22:24to be here today to update you on another productive year of continued partnership. I'm pleased

22:30to provide a brief update on Electra's operational progress, investment priorities, and the work

22:35underway to support a reliable, affordable, and sustainable electricity system in Guelph.

22:42Electra's formation has provided dividends of 30% greater than forecast without the merger,

22:47with continued strong competitive metrics relating to reliability, affordability, and sustainability.

22:55We have been effective in providing our customers with much better electricity reliability than

22:59the sector average and other large utilities, including Toronto Hydro and Hydro One. Over

23:05the past year, we have continued to make disciplined investments in renewing aging infrastructure,

23:11strengthening system resiliency, and preparing for significant load growth driven by electrification,

23:17new development, and emerging industries. These efforts are central to ensuring that

23:21our customers continue to receive safe, dependable, and affordable service. Looking ahead, we

23:27are preparing for the decision of our recently filed rate application, which will support

23:32the investments required to renew deteriorated assets, expand system capacity, and modernize

23:38the grid. These investments are essential to meeting customer expectations, supporting

23:44economic growth, and ensuring that our infrastructure remains resilient in the face of increasingly

23:49severe weather. We are also advancing our sustainable financing strategy, which is designed to support

23:56long term capital needs while maintaining rate stability for our customers. This includes

24:01ongoing engagement with federal and provincial partners. Electra has been advocating federally

24:06and provincially for more than two years for tax relief in an effort to remove barriers

24:12for non-municipal financial options. This slide is a snapshot of our 2025 performance.

24:26Our 2025 results reflect from both operational strength and discipline financial management.

24:35Total revenue of $825 million was primarily driven by strong regulated operations, higher

24:42distribution revenue from the price cap index adjustment, and increased customer demand.

24:49Net income of $144 million was $24 million higher than budget and $5.2 million higher

24:57than 2024 net income. The principal drivers of our net income in 2025 are, for the regulated

25:04business, distributed distribution revenue in the regulated business increased due to

25:10the price cap index adjustment of 3.3 percent in 2025. This increase was partially offset

25:16by higher operating expenses, principally as a result of inflationary labor increases,

25:22third party support for reactive repairs, credit losses due to higher aged accounts principally

25:28from residential customers, and environmental expenses. On the competitive business side,

25:34net income was impacted by lower storm response revenue, which was partially offset by the

25:40one-time gain on the sale of our submetering operations of $3.7 million. Ibadah of $396 million,

25:49of which 99 percent came from the regulated business, continues to underscore the stability

25:54and scale of our regulated business model due to its predictability of cash flows. Historically,

26:01Ibadah from the regulated business has been 90 percent of total Ibadah. The change in

26:06ratio in 2025 reflects lower Ibadah from the competitive business, primarily due to lower

26:12HPS storm response activity in 2025. Capital investments of $391 million were primarily

26:21focused on system access expenditures, including new customer connections, major transit initiatives,

26:28and construction of distribution infrastructure for new subdivisions, as well as system renewal

26:34expenditures, to replace aging assets and system service expenditures to modernize the

26:40grid. Rate base at the end of 2025 was $4.1 billion. Rate base has increased by 5.1 percent

26:50on average per year since 2021, reflecting ongoing investment in our distribution system.

26:57Dividends on common shares of $85 million were $2 million higher than the prior year

27:03and continues our track record of attractive and growing returns for our shareholders.

27:08Electra's return on equity of 6.8 percent continues to reflect the shortfall related

27:14to the return earned on the utility's rate base, as the utility continues to make the

27:19necessary infrastructure investments, which exceed the amount supported in rates, where

27:24the amounts in rates have been adjusted to include annual inflation and improved incremental

27:31capital modules. At the end of the year, we had $800 million of unutilized short-term

27:37liquidity, providing flexibility to meet funding requirements. Electra continues to be the

27:42largest municipally owned local distribution company in Canada by customer count, with

27:49the number of customers totaling $1.1 million. In 2025, we added approximately 5,000 new

27:56customers. In summary, these results demonstrate Electra's continued ability to deliver stable

28:03earnings, invest for the future, and create value for shareholders, all while maintaining

28:09a strong financial foundation. In light of our major investment requirements, Electra's

28:18rate-rebasing application seeks to balance customer expectations, distribution system

28:24needs, and applicable public policy objectives. The three key themes are, first, renewing and

28:31replacing aging infrastructure, focusing on renewing, deteriorating, and obsolete equipment

28:37to help minimize the risk of outages, ensure safe operations, provide increased resiliency

28:43during severe storm events, and mitigate environmental hazards. Secondly, meeting growing electricity

28:50demand. Electra has a critical role to play in expanding the local electricity grid so

28:56that our customers can continue to explore and install new technologies for home heating

29:01and powering their vehicles. Electra's population across our service territory is projected

29:07to grow by 31 percent from 2021 to 2041. This growth is driving the need for new housing,

29:15public transit expansion, and new infrastructure. And finally, enabling resiliency and modernization.

29:23As more of our customers are installing electrified technologies, Electra must invest in building

29:28a more intelligent and resilient grid. We must integrate new smart technologies that

29:34can help us to restore power faster during outages. These investments are further to

29:38strengthen our grid against extreme weather and potential cyber attacks. Our application,

29:47our RAID application, was filed with the Ontario Energy Board in October of 2025. And I'm

29:52pleased to share that we recently reached a tentative settlement on all issues with

29:58interveners. As I'm sure you can appreciate, we are subject to obligations of confidentiality,

30:04mandated by the Ontario Energy Board, and at this time, I am unable to discuss any further

30:10the terms of the tentative settlement. Over the next month, we will work with interveners

30:14to finalize the settlement terms and submit the proposed agreement to the Ontario Energy

30:19Board for approval. We expect that the OEB will begin reviewing the proposal in mid-July.

30:25This is an extremely positive development in the process, and we will provide more information

30:30as we can. We are also advancing our sustainable financing strategy, which is designed to support

30:41long-term capital needs while maintaining rate stability for our customers. Electra

30:47has been advocating federally and provincially for more than two years for tax relief in an

30:52effort to remove barriers for non-municipal financing options in order to fund capital

30:56expenditures. Electra's rebasing application requests an increase to capital budgets to

31:02address load growth and aging assets. If approved, capital expenditures will reach levels comparable

31:08to Hydro 1 and Toronto Hydro by 2031. The sustainable financing consortium that is made

31:16up of representatives of all of our shareholders has been convened to explore a structured

31:21review of potential sustainable financing options and the associated governance implications

31:27to support Electra's strategy and growth plans. We have held several productive meetings

31:32with the Oversight Committee and the Finance and Governance Subcommittees over the last

31:36few months. At this point, we are pivoting to focus on direct outreach with individual

31:41shareholders, seeking feedback on the materials provided, the options presented, and addressing

31:47any questions or perspectives shareholders raise while planning to meet again with the

31:51Oversight Committee in July or August. I want to take this opportunity to thank and acknowledge

31:57the City of Boel's active involvement in this exercise. You play an important role through

32:04your representation on the consortium and financing and governance subcommittees. We

32:08appreciate the time taken by all of your representatives. Your participation and guidance continue

32:13to be invaluable as we navigate through this process. Through our Electra Cares Community

32:23Support Program, total 20-25 investments in Guelph were approximately $128,000. We put

32:32a priority on youth and families in disadvantaged communities, food security issues, access

32:38to healthcare, as well as equity, diversity, and inclusion. We commenced a new five-year

32:43commitment with the Guelph General Hospital Foundation of $300,000, $60,000 per year over

32:49five years, to support the new Women's Diagnostic Imaging Center. Our commitment is helping

32:55to purchase a second mammogram machine which is already up and running at the new community

33:00clinic. This investment has been renewed for 2026 as we continue to support frontline social

33:06service agencies in Guelph. In closing, many thanks for the opportunity to attend today,

33:13and I look forward to our continued engagement. Thank you.

33:23Is Mr. Weigel going to do a part of a presentation as well?

33:26No, through you, Chair Downer. No, that concludes the presentation, but we're more than happy

33:31myself, Mr. Weigel, and then obviously Ms. Armstrong to answer any questions you might

33:36have. Thank you.

33:37So, okay, we'll start. Are there any questions from Councillors? Councillor Boussatiel.

33:44Yes, thank you. Thank you very much for the presentation and for being here. Through the

33:51Chair, this is a question I think just open to whoever can answer it. I tend to get quite

33:56a few emails from residents who say they have 100 amp service in their home, and when I

34:03do a drive-by, often it's a split, so the neighbor has the other, and they're asking

34:09for 200. So, when you speak about expand local infrastructure, is there a plan to look at

34:17neighborhoods where the infrastructure is dated and those individuals that are moving

34:23in, the new individuals with electric cars that need the 200 amps? Is that something

34:28that Electra does? Is that something the city does? How does that happen?

34:32Well, it's Electra, but it's also depending upon where the location is, the city, it may

34:37also be capacity from Hydra 1. So, to the extent that Electra can deal with it, that

34:44would likely be part of our plan, but if it's certainly we continue to advocate for increased

34:50capacity, and I know that that is an issue that has been coming up, and I've certainly

34:55been speaking to management as advised that it is something that they're continuing to

34:59attempt to address. And through you, Chair Downer, to Councillor

35:02Boussatiel, I'll just add on to Ms. Armstrong's comments. That's definitely a service request

35:06that will reside with Electra. They would then be in a position to triage and support

35:10individual constituents that you might have, Councillor Boussatiel, in terms of managing

35:14that through the relationship that is, or I should say the delivery mechanism that is

35:18Hydra 1 to Electra, in terms of then actioning those service calls. And much, I believe,

35:24I don't want to speak too much from Ms. Armstrong, much of that is sort of what she had alluded

35:28to in her presentation in terms of we know that residents are demanding more of the electricity

35:34system and the grid for things like electric vehicles. And we know on an institutional

35:40and industrial side of things that there's more demand for things, increased data capacity,

35:45not necessarily just for data centres, but there's increased capacity demands across

35:50the Electra rate base. Thank you. Councillor Cressen.

35:56Yes. Thank you for the presentation. I have a quick question with regard to a couple of

36:03complaints that I've received from more to residents, but I think that it's something

36:07that is consistent probably across the city. And that's with regard to graffiti on electrical

36:13boxes. And I know in one case in particular, I have an email chain with some staff at Electra

36:19talking about what to do about this. And so my question is, do you work with your partners

36:28at the various cities that you work with to create sort of vandalism deterrent type

36:35programmes? In Toronto, I know that they have one called Outside the Box, where they hire

36:38artists to do wraps on electrical boxes and murals, for example. And a follow up to that is

36:48if that's something that we could think about working on together with the city.

36:53Thank you. I'm not aware of that, but that doesn't mean it's not happening. So what I'd like to do,

36:59if you don't mind, I'll take that away, make some enquiries and perhaps we can, through the

37:03clerk, we can get back to you as to the answer. That's all right.

37:09Sure. And then maybe then a question to the clerk, is this something then that we could

37:15provide direction on today for staff to work collaboratively with Electra on developing a

37:21programme like this? Because I know through, you know, electric cares, for example, that's

37:25something that gives back to the community. So I'm just curious if I need to provide that

37:30direction or if that will come back to us in a different way.

37:34Okay, CAO Baker would like to answer that.

37:36Yes, and thanks through you, Chair Downer. I would say that there's no direction required. I

37:42would say this is actually more of a city staff, not necessarily a GMHI question as it relates

37:50to the programme. And so we're happy to take that away and work with Ms Armstrong, as was discussed.

37:57Sure. Okay. Thank you.

37:59Councillor Gibson.

38:03Thank you. Through you, Chair Downer. I was wondering if I could hear a little bit more

38:09about the, I believe I heard the sale of the sub-meetering business that Electra was in.

38:15Can you just expand on that? I thought sub-meetering was good business, but maybe there's others

38:20that do it more efficiently. Would you mind just to help me understand that a little bit better?

38:23Well, I think it's probably like any, you know, if there's an opportunity, if there's an opportunity

38:30to make a good sale of benefit to the company, then it's an opportunity that is worth considering.

38:37So yes, I think it's a good business, but I think you also have to be aware, as you're, you know,

38:42a lot of the customers of this particular business would be condominiums, the sub-meetering, and

38:47there's obviously been a slowdown in the condominium business. So there's been a, so long term that may

38:54be something, and certainly in the past it's been a very successful business, but I think

39:00it was certainly an opportunity that I think management felt that it was appropriate to take.

39:06Okay, thank you. And one last question. It's more of a sort of a global question for Electra. When we

39:13merged with Electra a few years ago, one of the more attractive pieces of the merger was that it

39:18was municipally owned by a consortium of municipalities, but also that we were a consortium of rapidly

39:25growing municipalities, which is really the basis for the dividend and the return on investment.

39:31Are you still seeing, I think it's Mississauga, Brampton ourselves, is it very as well? I can't

39:37remember all of the families in the consortium, but are we still tracking well those, you know,

39:44rapidly growing municipalities? Well, I think in my presentation I indicated that

39:50our number of customers increased by 5,000 last year. So yes, I think we are very well positioned

39:56in a rapidly growing territory. Thanks very much. That's great. Thank you. Are there any other

40:07questions? Councillor Billings? Councillor Billings? Through you, Madam Chair. Jane, I just,

40:17I think I know the answer, but I just wanted to confirm it with you. With respect to

40:23the credit risk, was that incorporated into the capital business case? And if so, to what extent?

40:32So what's the percentage point premium? And because I was fearful that we would have then

40:39more costs in the future than what was accounted for if it wasn't in the business case.

40:44The business case for the capital? For the capital cost electrification, for borrowing,

40:51borrowing, and then we have a credit risk issue. Well, it's been something that has been highlighted

41:00and that's why we're looking at sustainable financing options. But we don't have that now,

41:10Dewey, those other options. The options are being considered, okay, but the shareholders have to

41:16approve them. Okay. And then I have one question for staff. So this was years ago, I had asked

41:30if we were complying, winding up GMHI and the answer was there was tax implications or

41:38potential tax implications. So the answer was no. And I was just wondering what's,

41:43what's the situation or the case now? Are we even considering that,

41:49winding it up and merging with the city or no? Through the chair, not at this moment.

42:01That being said, on the financial statements, you will see there's a deferred tax liability

42:06that has grown year over year. And in the case that there is a wind up of GMHI,

42:11that liability there would be used to help settle any potential costs.

42:17So you're saying we, we actually could look at merging or no? Financially speaking?

42:24Financially speaking, we haven't looked at it, but that is an option that's required for us

42:31under the accounting policy to keep that on our books just in the event that this scenario needs

42:39to be reviewed. Okay. Thanks for your help. Thank you, Councillor Allt.

42:45Thank you, Chair Downer. This is just a takeaway to staff, I believe. I was wondering,

42:50following up on Councillor Billings question, whether at some point we could look, have just

42:55a quick report, summary report on the advantages or disadvantages of winding up GMHI?

43:04Sure. Through the, through Chair Downer, yes, we will, we will consider that there's other

43:11kind of ongoing work related to, to the capital financing. And so we're happy to, to take a

43:18further look into that question as part of that work. Thank you very much.

43:22Are there any more questions? Okay. Would somebody like to move the recommendation

43:28in front of us to receive Councillor Allt, seconded by Council Coran?

43:36Any more questions or comments? Seeing none, I'll go to the question. Is anyone opposed?

43:43None. I think there's any other business on this agenda. So I would look for a motion to adjourn.

43:55Councillor Cousin and seconded by Councillor Caitlin. Anyone opposed? Seeing none. This meeting

44:03is adjourned. Thank you.