By COLLIN GALLANT on January 14, 2021.
As the city examines the potential sale of its power plant some residents say nothing should be considered without a plebiscite later this year.
Others say that if the price is right, pull the trigger.
All were in agreement on the need for city council to approach the issue with caution.
Former alderman Graham Kelly said current councillors should be “very, very careful” discussing the future of what has been a strong financial asset of the city, is currently very profitable, and stands as a source of civic pride.
“A private company could swoop in and pick it up for less than what we paid,” he said. “With the economy being what it is, I don’t think it’s time for hasty action.”
On Tuesday municipal utility officials announced that it was exploring strategic alternatives for the 110-year-old city-owned power generation unit, including a potential sale or partnerships.
Elected officials described the process as determining a future course and the city’s part in the sector that faces great change from renewable power production.
There’s no time table but sources tell the News there is formal interest.
This comes as Hatters will next go the polls just nine months from now in October when municipal elections take place across Alberta.
Hatter Alison Van Dyke said such a crucial question as a potential sale of the municipal power company shouldn’t be able to proceed without public say.
“They’re bringing this up late in the term without public consultation,” she said, adding her belief that losing local, public ownership would be a “significant loss.”
“People in Medicine Hat who haven’t paid power bills elsewhere in Alberta don’t know how good they have it,” she told the News.
“People might see it as making a lot of money (on a sale), but once you’ve sold, you’ve lost that control, it’s gone.”
She plans to organize formal opposition to a sale to a private company.
Last summer the Canadian Taxpayers Federation expanded its criticism of local government spending by advocating that the power unit be sold off.
Alan Rose, head of the CTF-aligned Medicine Hat Ratepayers Association, said at the time he generally agreed that cities shouldn’t be in business or compete with the private sector.
On Wednesday, he told the News that City Hall should be considering getting out of the business that faces great change over the next decade.
He believes nuclear power would replace current generation in the near future and the city utility could be left behind with residents covering costs.
“There will be a lot of upset Hatters if we’re paying more for power,” said Rose, who has said he will run for mayor in the fall.
He said Wednesday that a mandate from the public on a sale wouldn’t be required in his opinion if officials properly scrutinize the offer.
“It is a touchy situation,” he said. “They should be aware that this will be harshly reviewed, but if they get a good price, sell it. I’m not opposed.”
Medicine Hat is the only municipally run power company remaining in Alberta, and has grandfathered status in Alberta’s deregulated power market.
Enmax and Epcor operate as arms-length subsidiaries of the cities of Calgary and Edmonton, respectively, and Epcor’s generation assets were conglomerated into Capital Power and sold as a publicly traded company.
The local charter allows the city to maintain its franchise area and avoid paying taxes on internal power sales, but it allows some exports under a capped production capacity.
That also keeps local customers from paying provincial transmission fees, which have risen steadily over two decades since the system was deregulated.