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By Chris Brown

City seeking offers on sale or partnership in power generation

Jan 13, 2021 | 6:41 AM

MEDICINE HAT, AB – The City of Medicine Hat is examining the future of its electric generation assets and that could mean selling them off or partnering with the private sector.

“The strategic goal of this exercise is to decrease volatility in our commodity business by realizing the inherent value of our asset base and to subsequently reinvest the proceeds in a manner that delivers more predictable economic returns to the City,” Brad Maynes, Commissioner of the city’s Energy and Utilities Division, says in a release regarding the assets often referred to as GENCO.

The city wants to remain in the energy business but wants to do that from a “more diverse and less volatile position” more suited for the current energy markets.

Maynes says the future pricing of electricity for Medicine Hat consumers will be a strong consideration of any proposed transaction.

He goes on to say the City wants any company they sell to or partner with to maintain the current attention to the environment, health and safety and “utilize the very qualified skillset of the current plant staffing compliment.”

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The city says the transmission and distribution functions are not being considered for sale or partnerships at the moment.

For the past number of years, the city has sought to find efficiencies and new opportunities in the depressed energy market as part of its Financially Fit initiative.

This includes selling the Glauc C field last year and a plan announced in September 2019 to abandon 2,000 gas wells.

Read yesterday’s full release from the city below.

Medicine Hat – The City of Medicine Hat, through its Energy & Utilities Division, continues to explore commercial opportunities to evolve its asset portfolio when economic advantages are evident.

Starting in 2017 with the Horizon disposition of all non-operated gas properties in Saskatchewan to the recently announced planned disposition of the city’s interest in the non-operated Glauc C oilfield, the city is executing on the strategic vision of its administrative and political leadership.

Recognizing similar opportunities within the electricity generation business, the City of Medicine Hat is actively sourcing strategic alternatives for its electric generation assets (GENCO).

“The strategic goal of this exercise is to decrease volatility in our commodity business by realizing the inherent value of our asset base and to subsequently reinvest the proceeds in a manner that delivers more predictable economic returns to the City,” says Brad Maynes, Commissioner of the city’s Energy and Utilities Division.

The city plans to retain its unique opportunity to continue in the energy business but in a more diverse and less volatile position that better reflects the evolving economics and supply of global energy.

“We want our ratepayers to know that any changes to how electricity is priced in Medicine Hat will be a strong consideration of any proposed transaction,” adds Maynes. “Furthermore, we would seek to partner with or sell to parties that would demonstrate the same attention to the environment, health, and safety as we currently do and utilize the very qualified skillset of the current plant staffing compliment.”

The city’s transmission and distribution functions are not currently being considered for disposition.

The City of Medicine Hat will continue to update residents as this process unfolds and reminds the public and other interested parties that any such commercial transaction is subject to a rigorous municipal and regulatory process and approval.