Councillor believes Pickering will be ‘losers’ if they sell of Elexicon Energy shares

Polarizing Pickering councillor Lisa Robinson said the city should “play the long game” and not sell its shares in Elexicon Energy.

Robinson used the board game Monopoly as an analogy, saying it’s the “losers” who are forced to sell in the game, leading to bankruptcy and “elimination from the game.”

The potential sale of Pickering’s 27.9 per cent share in Elexicon was up for debate in a closed meeting of Council Monday afternoon, with the city exploring the merits of a sale of their utility assets because ownership of an electric utility is not a “core service” or responsibility like snow plowing, parks, roads and 24-hour fire response.

CAO Marisa Carpino and Mark Rodgers, a partner with Toronto law firm Borden Ladner Gervais, provided updates on the process in an in-camera meeting at 3 p.m. Monday. The law firm, which specializes in commercial, regulatory and government relations components of electricity and natural gas markets, was contracted by both Pickering and the Town of Ajax to undertake a confidential exploration of the sale of their Elexicon holdings in early July.

Ajax holds a 21.8 per cent share.

Mark Guinto, who heads up Pickering’s Public Affairs and Corporate Communications division, said in the summer the city was considering selling its shares because “now is an opportune time” because of the “potential economic opportunity that a sale may generate.”

But Robinson said those economics are exactly why the city should hang onto its assets, noting Elexicon brings in a “steady income” for taxpayers.

Pickering Councillor Lisa Robinson

“Selling off might give us quick cash but we’d lose a source of income that pays off year after year,” she said. “Should we play the long game or should we sell out?”

Three years ago Pickering considered selling its shares in Elexicon to help pay for its ambitious CityCentre project, but after massive cost overruns during the pandemic forced the city to defer the project the decision was made to hold off on any sale of its shares.

That potential sale is now back on the table, with Ajax joining Pickering – two of ten municipal shareholders – in looking to maximize value for taxpayers.

Prospective buyers for Elexicon could include private equity firms, other utility companies or even other Elexicon municipal shareholders such as the Town of Whitby (which owns 32 per cent of the utility) or the Municipality of Clarington, which has a 9.2 per cent share.

It’s also possible the due diligence may recommend the communities hang on to their shares.

Elexicon paid just over $6 million in dividends last year, with the Town of Ajax realizing about $1.3 million. The value of Pickering and Ajax’s share value has not been disclosed but it is believed to be in the neighbourhood of $175 million combined.

Thirty years ago there were 300 municipally-owned electric utilities. Today, thanks to rapid and ongoing consolidation that includes both sales and mergers, there are just 50. Elexicon itself is the result of a series of mergers involving the former Veridian Corporation.