FORTIS INC. AND THE CHALILLO DAM
Professor Robert Sexty wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality.
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The executive offices of Fortis Inc. overlooked the harbour in St. John’s, Canada. Ships could be seen entering and exiting through the Narrows, the outlet to the North Atlantic Ocean. It had snowed and the trees on the Southside Hills were covered with a light dusting of white. H. Stanley Marshall, President and CEO, and John Evans, chief engineer, turned away from the view and began discussing the main issue the board of directors would confront at its next meeting in January 2002. Marshall and Evans were planning a presentation on the company’s Chalillo Dam project in Belize. They believed the project should proceed, but they had to convince the board of directors. The task was to make a recommendation including supporting arguments with a defence to counter the attacks being made on the project by international environmental non-governmental organizations (ENGOs). Fortis had to prepare for the negative publicity that would most likely occur if the project was approved. If the company was unable to make a convincing argument, it was unlikely the project would proceed. FORTIS CORPORATION
Fortis Inc. was a diversified electric utility holding company headquartered in St. John’s, Newfoundland, Canada. Fortis is a Latin word meaning strong, powerful, and firm. The Fortis international banking and insurance financial firm headquartered in The Netherlands and Belgium was not associated with Fortis Inc. In 2001, Fortis wholly owned Newfoundland Power Inc., the principal distributor of power in the province of Newfoundland, and Maritime Electric Company, Limited, the main distributor in Prince Edward Island. Other financial interests included:
FortisUS Energy Corporation, which operated four hydroelectric generating stations in upper New York state.
Fifty per cent of Canadian Niagara Power Company, which sold energy to Canadian and U.S. customers.
Twenty per cent of Caribbean Utilities Company Ltd., the sole supplier of electricity on Grand Cayman, Cayman Islands.
This document is authorized to be used only in the BU111- Introduction to Business Organization course by Professor Leanne Hagarty, at the Wilfrid Laurier University from 09/10/2012 until 12/19/2012. Use outside these parameters is a copyright violation.
Sixty-seven per cent of Belize Electricity Limited (BEL), the only distributor of electricity in Belize, Central America.
One hundred per cent of Belize Electric Company Limited (BECOL), which owned a hydroelectric plant on the Macal River in Mollejon, Belize.
A non-utility subsidiary, Fortis Properties, with investments in commercial properties in Atlantic Canada.1
Exhibit 1 is a summary of Fortis’ financial performance for the years 1997 through 2001. FORTIS’ BELIZE OPERATIONS
The Fortis operations in Belize embroiled the company in a social responsibility issue that consumed substantial costs, time, and energy. Belize Electricity Limited (BEL) had been owned by the government of Belize and was the main supplier of electricity...