( Tiffany Goodwein/ CHATNEWSToday)

By Tiffany Goodwein

Council approves borrowing $66 million for new electric generation unit

Aug 18, 2020 | 12:38 AM

MEDICINE HAT AB- In a unanimous vote, Medicine Hat City Council voted to approve
the borrowing of $66 million for a new 44-megawatt electric generation unit, unit 17.

The city maintains there is a need to obtain additional electric generation, on top of GENCO’s existing 255 MW fleet in order to provide a reliable supply and to provide back up power if the city loses its largest generation unit.

At Monday’s council meeting, Coun. Julie Friesen and Coun. Phil Turnbull noted that while
the borrowing of $66 million may seem like a lot, it is an investment for the city.

” It’s an investment in the future in many ways. It ensures our capacity is there to serve those that we already serve. For me, it is also about a lot about the future because it can help with economic vibrancy it can help with drawing more business to the area, it could help with creating more jobs,” Coun. Friesen said.

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The new electric generation unit isn’t anticipated to significantly affect the city’s debt load or future borrowing capacity, according to the city.

” The debt load is picked up by GENCO itself so they pay the principal and interest payments from their revenue stream. So you have revenue and costs. So right now they have costs of financing for other equipment like Unit 16 when they built it, and even when they paid those costs out, they still made a profit last year of over $40 million. So we don’t simply go after this from a debt perspective, we go at it and say, ‘ is this a business case ?” Coun. Phil Turnbull said, noting the effect on taxpayers will be nil.

Unit 17 is expected to be operational by the beginning of 2022.