Power profits could see an adjustment in an upcoming budget update as the city will have to account for changes in plans at the Aurora Sun facility.--NEWS FILE PHOTO
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A year-end city budget update to account for lost gas revenue and provincial grants will also have to be adjusted as first-year power sales are likely scaled back due to the Aurora Sun cannabis facility.
The company announced Thursday that it now plans to only commission about 15 per cent of the massive greenhouse facility next year, compared to the entire near 35-acre facility that has a huge power supply contract with the city’s power plant.
City Hall administrators said Friday they will attempt to make adjustments in the utility business plan update due in early December.
On the bright side however, part of Aurora Sun will come on line and in general, the power plant is highly profitable without it.
“It’s certainly something we’re looking at, but we don’t have all the information right now,” said utility and energy commissioner Bradley Maynes. “We’ll try to ascertain what the impact will be and try to write that into our 2020-23 forecast. If not, and (the change) is material, then we’d include that in a early update in 2020.”
The utility business plan for 2019 to 2022 has revenue projections that include the 42-megawatt supply agreement with Aurora.
That amount of power is only second to the amount provided by the city’s electricity business units to Hut 8 Cyptocurrency for its data processing facility. It’s also roughly eight times larger than the city’s next biggest customer.
Such a large contract affects power plant revenue next year, said administrators, though lower sales would be offset by better than expected operating results.
The company reiterated on Friday that it’s still committed to bringing the entire facility online, potentially in 2021.
It also stood by final job numbers that led the city to launch a labour market survey this fall to both accommodate Aurora hiring and an expanded mandate to survey existing business owners about their hiring needs.
Grant MacKay of the city’s economic development and land development office said while the need to fill 400 jobs initially at Aurora was a large part of embarking on the study, it’s been a valuable exercise for the broader business community.
“There are a lot of aspects to it,” said Mackay, who said project leader Sandra Blyth is now collating the results to determine new supports for business and job skills training for workers.
“It tries to expand the economy and diversify on a variety of fronts.”
In terms of how the company’s plans might affect other city operations, MacKay said it’s premature to say.
“There’s some discussion happening today at city hall about the implications,” he said. “We’ll attempt to meet with Aurora over the next two weeks to discuss what their intentions are next year.”
Most directly affecting the municipal government is the power revenue.
The four-year utility budget plan forecasted a $23-million dividend this year from typical business activity at the power plant, growing to $38.2 million in 2020. That $15-million increase is due partly to increased price forecasts, but also higher sales as Aurora ramped up operations.
Generally, budget forecasts are conservative, and the business unit is already predicting a 50 per cent higher profit-driven dividend for this year. Last month, budgeters stated the dividend to city coffers at year end could be $36 million, due mainly to more stable export prices and lower fuel costs, said Maynes. Those are expected to continue through 2020, he added.
