🏙️ Medicine Hat’s Energy Business Plan – Simplified
Tommy here, I know I’m your plug. Lemme chop up this energy biz and break it down for easy consumption -
🔌 What’s Happening?
Medicine Hat is thinking about creating a new company—called a Municipally Controlled Corporation (MCC)—to run the city’s electric and gas systems.
Right now, the City owns and runs these services directly. If the MCC is created, it would still be owned by the City, but it would work more like a regular business, with its own board of directors and rules.
🧠Why Consider This Change?
Confusion: The energy business (which makes money) and city services (which spend money) don’t always work well under the same roof.
Money Trouble: The City used to make lots of money from natural gas, but now most of the gas wells are shut down. The City is now spending money on clean-up.
Electricity is still profitable, but costs are going up and big upgrades are needed.
Outside experts (KPMG) said it would be smarter to run the utility business like a company. They also suggested creating a Rate Review Committee (RRC) to check prices and make sure rates are fair.
🛠️ What Would the MCC Do?
Deliver electricity and gas to homes and businesses.
Maintain the grid and gas pipelines.
Sell extra electricity to Alberta’s power market.
Try to make profits for the City through smart planning and good investments.
Be run by experienced experts, not City Council.
🏛️ How Would This Be Governed?
The City owns 100% of the new company.
A Board of Directors would run it, not City Council.
The City can still pick directors, receive money (dividends), and set rules.
A Rate Review Committee (with experts and two council members) would make sure utility prices are fair.
đź’° How Much Will This Cost?
Setup costs: Around $1.3 million one-time cost.
Ongoing cost: Adds about 1.75% to electricity and gas bills.
Expected gain: MCC can access more funding and bring in more money for the City over time.
🧾 What’s Next?
A public hearing will be held on June 24, 2025, where anyone can speak up or ask questions.
After that, City Council will decide if they will go ahead.
✅ Pros and ❌ Cons of Creating an MCC
âś… Pros
Expert Leadership: Energy business run by people with actual experience—not just politicians.
More Transparency: Clearer financial reports under business rules.
Separate Risks: If energy business loses money, it doesn’t hurt the whole City as much.
More Money Options: Can borrow money in ways the City can’t.
Better Dividends: Could give the City more profits if run well.
Rate Review: New committee to keep prices fair and transparent.
Avoids Selling: Keeps local control rather than selling to private companies.
Energy Transition Ready: Better prepared for green energy changes.
❌ Cons
Higher Bills (Slightly): 1.75% increase on electricity/gas rates.
Less Direct Control: Council won’t run the utility directly anymore.
Startup Costs: $1.3 million just to get going.
Board Risks: Could be hard to find the right people or control bad decisions.
Still Tied to Market Risks: Energy prices still go up and down.
Liability Grey Areas: If the City tries to interfere too much, it could still be on the hook legally.
Public Confusion: People might not understand how it works or still blame City Council
