Mixed Feelings at City’s Engagement Session on Future of Energy Division

A decision on the future management of the Medicine Hat’s utilities might have immense consequences but it was a moderate crowd at the municipality’s open house on the issue Friday at City Hall.

City council initiated the process to consider moving its electric utilities to a municipally controlled corporation (MCC) last month outlining, and so far enacting, minimum timelines for a legally required public hearing and decision.

That hearing is set for June 24 with Friday’s open house one of three opportunities to engage with the municipality’s staff regarding the possible move. Members of the Southeast Alberta Chamber of Commerce will be given exclusive access to ask questions of city staff during its engagement at the Esplanade on Monday followed by a public online session Wednesday.

City staff engage with a member of the public at Friday’s engagement session on the possibility of having the city’s electric generation and distribution moving to a municipally controlled corporation. (Photo Thomas Fougere)

In an interview with the Owl at Friday’s event, Redcliff Mayor Dwight Kilpatrick had concerns about impacts to his town’s ratepayers, going as far to say his municipality could remove itself from the city’s franchise area.

“In the last few years, we’ve been getting the same rates as the city residents so, if that was to continue, we would have a hard time complaining it’s unjust or unfair,” said Kilpatrick.

He said he understands that a municipality running an energy division can cause stress, adding, “that was what they were elected for.”

“I actually believe council should have those pressures because when they are elected, they are elected to do the best for the most,” said Kilpatrick. “An MCC is not that. An MCC board is probably going to be directed to wear the hat of the company and make (the city) profit.”

Kilpatrick said Redcliff residents have gotten power from Medicine Hat, “since the beginning of time,” and gas since 1985. And while his town’s residents pay for transmission lines for new sub-divisions, the city claims ownership of them.

“It’s a good deal for the city. Could we get out of that, we probably could. . .We could leave the city’s distribution system,” he said.

For Phil Turnbull, former city councillor and energy committee chair, he’s convinced a move to a MCC is a right one citing a municipal council does not have the experience to make decisions in an industry worth hundreds of millions of dollars.

“When you make these decisions, it’s not just knowing the industry, it’s also knowing the financial impact of that to the city, what does that do to the cost to operate and how is that going to affect you and I as consumers,” said Turnbull.

Turnbull pointed to a future renewable project decisions with the Saamis Solar proposal to outline the difficulty of decisions for the city’s energy utility as well as a past one represented by the Boxsprings Windfarm.

He highlighted the potentially more than $300 million investment Saamis Solar project could be profitable but is one best left in the hands of professionals from the energy sector to make.

The three wind turbines which make up the Boxsprings Windfarm. (File photo)

As for Boxsprings Windfarm which council made the decision to hand over to a private company after the municipality did the initial regulatory steps to develop it on its own, it has its own issues.

“We pay the guy who owns them 13.5 cents a kilowatt hour going up 2.4 per cent a year on inflation from the time we’ve had them 10 years ago,” said Turnbull.

While wholesale prices spiked starting in 2021, the cost for much of the past decade has been lower with the current residential rate at 11 cents per kilowatt hour.

Turnbull also stated the project does not produce a large amount of power; the owner pays taxes and will cover the remediation costs while the city gets the carbon credits generated.

Turnbull said while city administration has stated the city as a corporate entity is currently and technically the shareholder of the municipality’s energy assets, that’s not necessarily how he or other Hatters view the issue.

“Yes, we are,” he said of residents being shareholders. “We’re not shareholders which get a (direct) dividend. The dividend we get comes back in that $800 million that we put away and is supposed to offset building recreational facilities, helping to lower taxes.”

While in attendance at the open house, resident Immanuel Moritz stated its important the MCC remain separate from city council governance if it is to work.

“The best plan is to have a separate board of directors. They make the money and send it through to the city quarterly or whatever and then we’re done,” said Moritz. “And have council out of the loop. If you are not going to have council out of the loop, then you might as well leave it the way it is.”

But Moritz said he is still learning the details of how the city is envisioning the MCC set up.

The city’s electrical generation Units 16 and 17. (File photo)

Due to a city administration policy not to allow staff to be interviewed by the Owl, it is unclear what the exact role will be for council oversight of an MCC.

But Mayor Linnsie Clark said maximum allowances for time should be made to allow as many Hatters as possible to have their say in the future of the city’s utilities given the gravity of the decision.

“I would have wanted a more robust, lengthier period of two-way conversations,” said Clark. “This is a huge deal for our city no matter how you look at it. I think giving people time to process the information is important. If you are away for a month, you shouldn’t miss the opportunity to make submissions or participate in the public discourse.”

Clark said even if city council moves forward with a decision to proceed with the MCC, a new council can likely reverse the decision following the next municipal election in a little more than four-and-a-half months.

Given that situation, Clark questioned the rational in proceeding, asking, “why are we rushing this through?

“I personally don’t understand it, but I sometimes get outvoted.”