Online Engagement Sessions Hears of Continuing Challenges in Explaining MCC to Public

The City of Medicine Hat’s municipally controlled corporation (MCC) project team during a one-hour public engagement session held Wednesday evening. (Screenshot courtesy of the City of Medicine Hat)

An online public engagement with city staff pitching the benefits of moving the city’s power generation division into a municipally controlled corporation heard the topic was complex, challenging and difficult to explain.

The 20 participants who took part were also told there will be no information mailouts or further engagements prior to a public hearing on the matter later this month. Around three-dozen interested residents attended the city’s only in-person engagement held mid-day last Friday.

As for why a transition to a MCC is required, Rochelle Pancoast, managing director of the city energy division, stated many in the public don’t understand the complexities of the operation.

“In fact, council doesn’t always know about some of our complexities,” Pancoast stated. “Should staff continue to drive what we need to drive? Sure. But even I’ll argue it’s not the best governance model if we are the ones educating new council members on what the energy business is about and then we also become the advisor and recommender of what we should be doing.

“And we tend to know more about the business than council. They don’t necessarily feel equipped to be asking the right questions or, if they are asking questions, they tend to trust our answer. That’s poor governance.”

In response to a question regarding whether the power generation assets that would be turned over to a corporate entity under a municipally controlled corporation (MCC) would be valued correctly, Lola Barta, the Medicine Hat’s director of finance, said they would.

But she didn’t state what that value is.

Barta stated, “the intent is the existing assets that we currently have on the books today will be transferred to the MCC at the net-book value.”

Medicine Hat’s Unit 16 and 17 natural gas-powered electric generation plants worth about $60 million each at the time of construction would be transferred to a private corporation with the city as sole shareholder if council approves the MCC model. (File Photo)

In response to a question of where the startup costs for the MCC would come from, Barta said it is not anticipated to impact property taxes.

“We really haven’t looked into this, but the assumption is that it would be funded through either the energy transition reserve or be funded by the business units that would be moved over to the newly created MCC,” said Barta.

The city’s energy transition reserve was established eight months ago through a bylaw creating a more than $75 million fund on the basis it would be used, “to achieve a net zero emissions target,” according to the city’s 2024 financial statements.

And in response to a question about boiling down the vast amount of information provided to the public in the last month, and the industry jargon associated with it, Pancoast said that’s a challenge.

And it’s a challenge to even present the information to council in a way they can understand.

“It’s not easily done,” she said. “I think we are always looking for opportunities to improve in that area, it’s a common challenge – how to describe our business in a way that simplifies to a point without losing the actual essence what we are trying to achieve is one of the challenges we have.”

Despite those challenges and no indication they have been overcome, council will be proceeding with a public hearing on the matter June 24 utilizing the near minimum 30-day timeline allowed from the public disclosure heard at the May 20 council meeting.

Following the public hearing, council will be able to make a decision whether to start the process to transition the energy division into an. MCC.

With a municipal election four months from now, indications are that any decision by this council can be reversed by the next.