NT Power Merger/Sale

The Town of Newmarket and the Township of Tay“The Shareholders” of Newmarket-Tay Power Distribution Ltd. (NT Power) have formally approved a sale of Newmarket-Tay Power Distribution Ltd. (NT Power) to Alectra Inc. via a deferred payment structure, creating a new and innovative utility transaction structure in Ontario’s Local Distribution Company sector, which is a first of its kind.

“This is a historic and future-focused decision for our community as Alectra’s proposal gives Newmarket and NT Power the strongest combination of financial security, innovation, and community protection,” said Mayor John Taylor. “We were clear from the outset that protecting our employees and maintaining local service and improving our long-term financial sustainability were our top priorities. Alectra’s proposal delivers financial strength, innovation and long-term stability while guaranteeing job protection, preserving our local presence and providing multiple safeguards for taxpayers. This transaction positions Newmarket and Tay to thrive in a rapidly transforming electricity sector.”

The decision follows a rigorous, multi-year review that began in 2022 and included independent financial and legal analysis, sector benchmarking, and a competitive market testing process. Throughout the review, both Councils were guided by clear priorities: protecting all NT Power employees, maintaining local service presence, ensuring competitive electricity rates, preserving reliability and customer experience, securing long-term capital investment, and delivering a strong and prudent financial return for residents.

At the conclusion of the 45-day “Go Shop” process, Alectra’s proposal emerged as the strongest and most balanced option. While other utilities participated, they did not meet the core criteria to the level of the Alectra bid. As a result, the Shareholders determined that Alectra’s structure provides the most appropriate balance between opportunity, growth, and protection for employees and the community.

Alectra’s agreement includes an industry-leading deferred purchase price model. Under the approved terms, the municipalities will receive (i) fixed annual payments of $4.35 million for the first seven years following closing, more than triple NT Power’s historical annual dividend, (ii) annual payments in years 8-13 that are equivalent to dividends received by Alectra shareholders, (iii) the opportunity to participate in equity growth of the combined entity, and (iv) protection from downside risk by a guaranteed minimum payout of $110 million and multiple future decision points at years 7, 10 and 13. The valuation-based structure shields the municipalities from downside risk while allowing participation in future sector growth.

The guaranteed annual payments will support long-term municipal priorities, infrastructure planning and financial sustainability. Council will determine the most appropriate allocation of the final payout of funds at the end of 7, 10 or 13 years within the Town’s broader financial strategy.

Equally important are the commitments to employees and local operations. Alectra has guaranteed job protection for all NT Power employees. After closing, employment will continue for all NT Power employees on the same or no less favourable terms. They have also committed that no employee will be required to relocate before at least 2031.

Newmarket’s operations centre will be maintained for a minimum of 10 years, ensuring continuity of service and rapid response for customers. The agreement also includes guaranteed capital investment in the local system and ensures distribution rates will be frozen at 2026 levels for 2027 and 2028, except for potential adjustments tied to inflation.

“NT Power’s Board of Directors fully supports the approved direction and agreement with Alectra Inc.,” says NT Power Board Chair, David Charleson. “As we move to the next steps, we truly believe this watershed agreement is the best option for our customers and employees as it provides infrastructure investment, community presence, and staff protection”.

The agreement also opens the door to a potential future merger opportunity, subject to further consideration, and establishes a Transition Committee with senior executive participation and municipal oversight to safeguard community interests during integration.

The transaction will now proceed to the Ontario Energy Board (OEB) for regulatory review, which can take several months. NT Power will continue to operate as an independent entity under its existing Board of Directors throughout the OEB process. Closing is anticipated in late 2026, subject to regulatory approval.

This landmark partnership positions Newmarket and Tay as leaders in responsible and innovative stewardship of public assets, protecting employees, maintaining reliable local service, and securing long-term value for residents.

Following an exclusive due diligence period with Alectra Inc., the Town of Newmarket and Tay Township (collectively, the shareholders of Newmarket-Tay Power Distribution Ltd.) have signed a Securities Purchase Agreement (SPA) with Alectra Inc., subject to a 45-day “Go Shop” period. The “Go Shop” period enables the shareholders to determine if there are any other parties willing and able to offer more favourable terms. The “Go Shop” period will commence on January 12, 2026.

At the conclusion of the “Go Shop” period (approximately February 26, 2026), the Town of Newmarket and Tay Township (NT Power Shareholders) will make a final decision on whether to move forward with a sale or merger of Newmarket-Tay Power Distribution Ltd. (NT Power), and, if so, with which purchaser.

With electricity demand in Ontario evolving rapidly due to growth, electrification and climate change, the Town of Newmarket and the Township of Tay are proactively exploring strategic options for NT Power, including a potential sale or merger, to build on the utility’s strong foundation and further enhance the delivery of safe, reliable, affordable, and sustainable local energy services for customers and residents in both communities over the long term. At the forefront of the SPA with Alectra Inc. are the following priorities:

• Prioritizing reliability and customer service

• Job protection for all NT Power employees

• Guarantee that employees can continue working in their current locations until at least 2031

• Ongoing capital investment into the system to ensure effective and efficient service today and into the future.

After the “Go Shop” period concludes and should the NT Power Shareholders choose to move forward with a signed SPA with the preferred purchaser, an application to the Ontario Energy Board (OEB) to approve the merger/sale would be filed. This process can take several months and during this time, NT Power would remain an independent entity with an independent Board of Directors.

Background

In December 2024, it was announced that the NT Power Shareholders were exploring a potential merger/sale of the utility company.

In August 2025, NT Power Shareholders entered into an agreement with Alectra Inc. that outlined the key terms in an Indication of Interest (an “IOI”) for the potential sale or merger of NT and to commence a 120-day exclusivity period to conduct due diligence.

About NT Power

Newmarket-Tay Power Distribution Ltd. (NT Power) is a local electricity distribution company licensed by the Ontario Energy Board. NT Power is jointly owned by the Municipalities of Newmarket (93%) and Tay (7%), serving 50,000 customers in the areas of Newmarket, Tay and Midland.

About Alectra’s Family of Companies

Serving more than one million homes and businesses in Ontario’s Greater Golden Horseshoe area, Alectra Utilities is now the largest municipally owned electric utility in Canada, based on the total number of customers served (Approximately one million businesses and families). Alectra contributes to the economic growth and vibrancy of the 17 communities we serve by investing in essential energy infrastructure, delivering a safe and reliable supply of electricity, and providing innovative energy solutions.

Alectra Inc. (Alectra) is an investment holding company with a head office in Mississauga, Ontario. Alectra owns 100 per cent of the common shares of each of Alectra Utilities Corporation (AUC) and Alectra Energy Solutions (AES), which in turn has two wholly owned subsidiaries: Alectra Energy Services Inc. (AESI) and Alectra Power Services Inc. (APSI). AESI has two wholly owned subsidiaries – Util Assist Inc. (UA) and Holland Power Services Inc. (HPS). HPS has two subsidiaries: Holland New England and Gagnon Line Construction.

The Town of Newmarket and Tay Township (NT Power Shareholders) have entered into an agreement with Alectra Inc. that outlines the key terms of a potential merger/sale with NT Power. In December 2024, it was announced that the NT Power Shareholders were exploring a potential merger/sale of the utility company. NT Power Shareholders then explored options with various potential utility partners.

With the landscape for electricity demand in Ontario rapidly changing fuelled by growth, electrification and climate change, the Town of Newmarket and the Township of Tay are assessing how a merger/sale of NT Power could support their customers in providing a safe, reliable, affordable and sustainable local energy system for future generations.

Following a thorough review by the Town of Newmarket and Tay Township and legal and financial advisors, the Shareholders have decided to enter into an exclusive 120-day due diligence period with Alectra Inc. for final consideration by the two Town Councils.

NT Power Shareholders have indicated to Alectra Inc. that its priorities for a final agreement include the following:

• Prioritizing reliability and customer service

• Job protection for all NT Power employees

• Maintaining NT Power offices/operations centre in Newmarket

• Continued presence in Tay Township and Midland

• Ongoing capital investment into the system to ensure effective and efficient service today and into the future

Next steps include providing Alectra Inc. with the exclusive 120-day period to complete more extensive due diligence, and to formulate a merger/sale agreement for final consideration. If the final agreement is accepted by Newmarket and Tay Council, the Shareholders will have the potential to speak with other interested utility partners to ensure that they receive an agreement that reflects their best option going forward.

If this process deems Alectra Inc. to be the best fit for Newmarket and Tay, an application to the Ontario Energy Board (OEB) to approve the merger/sale will be filed. This process can take several months and during this time, NT Power would remain an independent entity with an independent Board of Directors.

“We are pleased to be entering into an exclusivity period with Alectra Inc. that will provide them the opportunity to demonstrate that a partnership with them will focus on competitive rates, reliability and customer service and most importantly, retain all jobs at NT Power,” says Mayor John Taylor. “Demands on our local utility in the coming decades will be complex and significant as we face growth, electrification and climate change. We look forward to continuing to evaluate how our communities and NT Power customers and staff might benefit from enhanced resources which a merger/sale with Alectra Inc. may offer.” says Newmarket Mayor John Taylor.

“NT Power’s Board of Directors supports the potential agreement with Alectra Inc.,” says NT Power Board Chair, David Charleson. “As energy needs, demands and the service expectations in our communities continues to evolve and grow at a rapid pace, the Board and our Shareholders recognize the pressure to deliver safe and reliable energy to our customers while keeping rates affordable, and our infrastructure up to date. I believe this potential merger/sale will help ensure reliable and sustainable power for our communities well into the future.”

About NT Power

Newmarket-Tay Power Distribution Ltd. (NT Power) is a local electricity distribution company licensed by the Ontario Energy Board. NT Power is jointly owned by the Municipalities of Newmarket (93%) and Tay (7%), serving 50,000 customers in the areas of Newmarket, Tay and Midland.

About Alectra’s Family of Companies

Serving more than one million homes and businesses in Ontario’s Greater Golden Horseshoe area, Alectra Utilities is now the largest municipally owned electric utility in Canada, based on the total number of customers served (Approximately one million businesses and families). Alectra contributes to the economic growth and vibrancy of the 17 communities we serve by investing in essential energy infrastructure, delivering a safe and reliable supply of electricity, and providing innovative energy solutions.

Alectra Inc. (Alectra) is an investment holding company with a head office in Mississauga, Ontario. Alectra owns 100 per cent of the common shares of each of Alectra Utilities Corporation (AUC) and Alectra Energy Solutions (AES) which in turn has two wholly owned subsidiaries: Alectra Energy Services Inc. (AESI) and Alectra Power Services Inc. (APSI). AESI has two wholly owned subsidiaries – Util Assist Inc. (UA) and Holland Power Services Inc. (HPS). HPS has two subsidiaries: Holland New England and Gagnon Line Construction.

The Town of Newmarket and Tay Township, as the shareholders of Newmarket-Tay Power Distribution Ltd. (NT Power), have announced they are in the early stages of exploring the potential merger or sale of NT Power. With the landscape for electricity demand in Ontario rapidly changing, fueled by growth, electrification and climate change, the Town of Newmarket and Tay Township are assessing how the merger or sale of NT Power could support their customers in providing a safe, reliable, affordable and sustainable local energy system for future generations.

With the recent announcement from the Province to amend regulations under the Electricity Act, including the elimination of certain tax obligations arising from a sale, for LDCs (Local Distribution Companies) to December 31, 2028, the municipal shareholders, supported by the Board of Directors (the Board), believe it is prudent to explore options to ensure affordable, reliable power for our communities into the future.

The municipal shareholders, supported by the Board, are in the beginning stages of exploring and evaluating options, which will take several months. Any option will only be pursued if it benefits our communities, customers and NT Power’s employees. In this exploratory process, the focus will be on ensuring the following key priorities are met: competitive local distribution rates, improved reliability, preserving a positive customer experience, job protection for employees, maintaining offices and operations centres, and a significant return on investment.

Quotes

“Demands on our local utility in the coming decades will be complex and significant as we face climate change and increased electrification. We look forward to carefully evaluating whether our communities and NT Power customers would benefit from enhanced resources which a merger or sale could offer,” says Newmarket Mayor John Taylor. “The ultimate goal is to ensure we have the infrastructure to deliver affordable, reliable energy to our residents and local businesses, not only for the next 10 years but for the next 50 years.”

“NT Power’s Board of Directors supports the exploration of a merger or sale of the utility,” says NT Power Board Chair David Charleson. “As energy needs, demands, and service expectations in our communities continue to rapidly evolve and grow, our shareholders and the Board recognize the pressure to deliver safe and reliable energy to our customers while keeping distribution rates affordable and our infrastructure up to date.”

About NT Power
Newmarket-Tay Power Distribution Ltd. (NT Power) is a local electricity distribution company licensed by the Ontario Energy Board. NT Power is jointly owned by the Municipalities of Newmarket (93%) and Tay (7%) serving 50,000 customers in the areas of Newmarket, Tay and Midland.