What to know about Medicine Hat’s proposed energy business transition

Known as a municipally controlled corporation, the agency would be charged with running the day-to-day operations.

These agencies, known as MCCs, are found in several municipalities across Alberta, including in Edmonton, St. Albert and others.

Red Deer is currently going through the process to establish an MCC, according to a staff report.

The second suggestion from the KPMG report is creating a rate review committee that would set the prices for residential, commercial and other customer classes.

It, too, would be made up of industry experts, along with two council representatives and a non-voting community observer.

Council will at its May 20 meeting vote on if it will move ahead to a public consultation phase, passing one of the “stage gates” that brings it closer to finalizing a new structure.

Graphic/CHAT News

Launching an MCC could cost a one-time $4 to $5 million fee to set up, staff report.

Ongoing operating costs for the board, new positions, systems and additional allowance for further transition could cost $2 to $3 million annually, working out to one to two per cent of the city’s annual operating costs.

To kickoff the rate review committee, the city would need to spend $25,000 to $45,000 in a one-time cost and fund its operations with $185,000 to $215,000 annually.

Staff say separating the different elements of authority would allow for a more effective system.

Rochelle Pancoast, the city’s energy, environment and land division head, said at Tuesday’s meeting that council plays three different roles.

“Today, council wears three hats: one to represent the ratepayer, one to represent the energy business as a business and one to represent the taxpayer,” Pancoast told reporters.

The municipally controlled corporation and the rate review committee aims to solve the multi-hat problem by each taking on a role — but without taking away the city’s ultimate authority.

Graphic/CHAT News

Mayor Linnsie Clark believes the process is going too quickly and voters should have a chance to weigh in.

“This is an election issue,” Clark told CHAT News on Wednesday, in reference to the fall municipal election.

Coun. Alison Van Dyke says the speed at which the city is moving ahead is the best approach as the next term of council wouldn’t be as well-studied to make a decision.

“Someone coming into it in the fall would have to start from square one and if they were being asked to make that decision right away they would probably be ill-equipped to make it, unless they were coming from the energy sector in their non-council lives,” Van Dyke said.

Moving through the initial stages quickly also allows more time for crucial public feedback, Van Dyke added.

“The part that you want to make sure you have enough time for is the public consultation and information because you want to make sure that people in the community are not caught unawares,” she said.

“But when it comes to information being presented to council, I don’t think the speed at which that happens makes much of a difference.”

by Eli J. Ridder

What to know about Medicine Hat’s proposed energy business transition

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