City scrubs power sale option

By COLLIN GALLANT on February 9, 2021.

The city announced Monday that is will now not consider a sale of the power utility during a strategic review.--NEWS PHOTO COLLIN GALLANT

cgallant@medicinehatnews.com@CollinGallant

A sale will not be considered as part of a current review of the City of Medicine Hat’s power plant, according to a statement from Mayor Ted Clugston and senior officials on Monday afternoon.

Last month the utility department announced it was conducting a strategic review to determine the potential effect of growing renewable supply on its export sales of gas-fired power.

However, the inclusion of a potential sale of the municipally owned power plant or partnership between a new private sector owner and the city-retained distribution company became a lightning rod of controversy.

“The public reaction was part of it, but we are late in the term and this would be such a huge decision,” Mayor Ted Clugston told the News. “I don’t care what business you’re in, you always have to ask yourself questions about your business. I think it’s only prudent.”

Clugston was among several council members who said that if an offer was high enough they had the authority to act on it, potentially before the next election slated for October.

Administrators Monday said work will continue into market conditions, the effect of growing renewables will affect its gas-powered portfolio and general future strategy will continue, but that does not include a sale at present.

The review was called for by members of the utility committee. On Monday, chair Coun. Phil Turnbull said the review is crucial for the business unit and for citizens to understand the potential risks of staying in the generation business that faces challenges from low cost green energy and battery storage technology.

“We need only look to (depressed markets for) natural gas – if power generation goes the same way, we will suffer,” he told the News. “We don’t have the deep pockets we once had, or others (power companies) do to weather the storm.

“So how do we avoid that? That shouldn’t be a political issue.”

That the 110-year-old power company, currently the only remaining publicly owned generator in the province, would be sold was heavily debated in the public.

An online petition asking for support to “keep Medicine Hat utilities publicly owned and operated, garnered 4,750 signatures as of Monday afternoon.

“People were opposed for a variety of reasons, – I’m very happy that council has recognized that and will postpone this,” said organizer Alison Van Dyke, who added she supports the review’s objectives as they are now stated.

“I think a review is great. It was the abrupt disclosure that there might be a sale that was the problem.”

Utility managing director Brad Maynes says with a potential sale off the table, he expects to blend the conversation about renewable power and the future of the export market to become standard items in general business operations and planning.

He also hopes to bring forward items for the public on business conditions in the energy market and potentially how the utility is planning to handle future challenges.

“This keeps the analysis and dialogue going,” he said.

“The future of energy supply and marketing are going to look different. What are our costs? Is our asset competitive? Roadmap is a good word for it.”