Red Deer District Chamber is urging the city not to rush into a decision on the future of the electricity system.
City of Red Deer has commissioned a business plan for a municipally controlled corporation (MCC) that would oversee the system that provides power to homes and businesses.
The business plan says an MCC is the "best way to fulfill" council's objectives for its electric utility, including providing a reliable, response, affordable and adaptable system that contributes to economic development and provides a revenue stream for the city."
While the city's goals of modernizing the electrical system and improving its financial flexibility is "commendable," the chamber says in a Monday statement that it is concerned the MCC model may "result in significant financial burdens."
Chamber CEO Scott Robinson said "we believe that full divestiture or partnering with an experienced utility operator should be thoroughly explored as more scalable, efficient, and lower-risk solutions."
The business plan estimates it would cost $4.1 million to set up an MCC and $3 million in operating and maintenance costs by 2027.
"This model, which has been touted as having only a mild financial impact, could place undue strain on the city's finances without delivering the necessary financial impact for long-term sustainability," says the chamber.
Selling off the electric utility – divestiture – "offers an opportunity for a one-time capital injection that could reduce debt, reinvest in critical infrastructure, and support economic development, all without raising taxes on local businesses or residents."
An MCC may also "create unnecessary competition with established private businesses already regulated by the Alberta Utilities Commission," the chamber says.
In addition, more information is needed on how an MCC – which would be city-owned and the city council would continue to set electricity rates – would operate.
City council has not decided on going to an MCC yet. A series of public open houses were organized, the last on Wednesday at Golden Circle Senior Resource Centre, 4620 47A Ave, 2-4 p.m. A formal public hearing is set for June 23 in council chambers beginning at 5 p.m.
A third option the city is considering would be to keep running the electric utility as a city department, but modernizing the way it operates to give it more flexibility in dealing with changing technologies and other challenges.
The chamber says it is concerned that the city has not taken a close enough look at all options and called on city council to consider all alternatives. The chamber also urged local residents to get involved in the public hearing process.
