Alberta cities fighting forced sale of utilities

June 12, 2002

Alberta cities fighting forced sale of utilities

EDMONTON (CP)

The Alberta government should abandon proposed regulatory changes and leave big city-owned utilities to manage their own business affairs, says the head of Edmonton's power and water utility.

In letters to the province and to the chairmen of the utilities' board of directors, Epcor CEO Don Lowry objects to planned changes some believe would give the Alberta government the power to force cities to sell their utilities.

The cities of Edmonton, Calgary and Medicine Hat own utilities.

"While the Department of Municipal Affairs has a role to play in helping certain municipalities mange their risk, in the case of a sophisticated business entity like Epcor, the City of Edmonton and Epcor's board of directors have the experience required to manage these risks," Lowry said in a letter to the province.

Last month Alberta Municipal Affairs proposed amendments to the Control of Corporations regulation. One proposed change would allow the minister to set a time frame in which a municipality must "divest, amalgamate, merge, reorganize or wind up a controlled corporation."

Another would force city-owned corporations to get provincial approval before they buy a subsidiary.

This year, the city received a $100.5-million dividend from Epcor, money it used to help pay for city services. Without it, property tax increases would have been much higher.

Epcor recently started a big push into Ontario, where it now has about 1.3 million customers and has a subsidiary, Union Energy.

The company also owns a 50 per cent stake in a new, $400-million power plant being built in Sarnia, Ont., by Calgary-based TransAlta.

Enmax, Calgary's city-owned utility, also made a submission to the province, company spokesman Tony McCallum said. Like Epcor, Enmax largely rejected the proposed changes, he said.