A third-party review of the city's energy division has suggested a possible shift to a municipally controlled corporation, like Enmax or Epcor, but the head of a group that has vocally complained about power profits for more than year now is suggesting the report's findings are unsurprisingly anti-lower rates.--NEWS FILE PHOTO
@@CollinGallant
A major review of the city’s energy business launched after sky-rocketing power prices last year suggests the power plant and energy distribution business become apolitical through a municipally controlled corporation.
But Hatters who called for the review last year aren’t sold on the idea, while council members are calling for more information.
“This is a long-standing business that’s fundamental to this city, and I don’t think this council should be making any decisions without consulting the public,” said Mayor Linnsie Clark at a special meeting on Monday.
Councillors voted 8-1, with Clark against, on a motion to hold another special meeting on Dec. 9 to receive staff evaluation of the proposal.
“I know we’re tasked but I’d like to get this (information) by the end of the year,” said Coun. Cassi Hider.
“The citizens should know what city admin views of the plan – that doesn’t mean we’re approving anything – but let’s end that speculation in the public,” said Coun. Ramona Robins.
Sou Boss, head of the Medicine Hat Utility Ratepayers Association, a small but vocal local group that formed to challenge city council on power profits, lobbied for the report to be done in late 2023.
She attended Monday’s meeting and said creating a new entity to manage power and gas delivery could result in more income through higher fees and rates.
“I’m not surprised – it’s been talked about before,” she told the News. “For a $590,000 report, it’s not very valuable. We’re asking for lower rates and it looks like rates are going up, not down.”
A spin-off to a city-controlled independent entity would help the century-old business survive major challenges in the sector, said KPMG officials during a presentation Monday, while commodity rates for customers should deal with be a council-appointed panel.
“It can’t fundamentally change the risks, but it can strategies to address the risk,” said Tim Swanson, an official with KPMG, who said City Hall would maintain a level of control over an separate business and board as its only shareholder.
An MCC could have better access to capital, increase an energy trading savvy to thrive in a low-cost environment but would also make apolitical decisions on capital and could rise rates to recover losses.
