Lacombe has joined forces with an energy retailer to offer competitive rates to residents while making money for the municipality.
Through an agreement with Calgary-based Utilitynet, the City of Lacombe will receive a portion of the sales proceeds when residents sign up with the power retailer through the Echo Energy program.
“It’s a great thing for the city,” said Mayor Steve Christie on Thursday. “We always talk at the municipal level at looking at alternative revenues.
“Going to the provincial government hat in hand all the time isn’t the way of the future,” said Christie.
Establishing a municipally-owned energy retailer is in line with council’s goals of forming strategic partnerships and promoting economic prosperity.
Under the agreement approved by council last month, the city is responsible for marketing and signing up customers. The city will purchase power through Echo Energy, which will handle billing.
Based on an 11 cent/kWh margin, the city anticipates it will receive about $23,000 in profits based on 250 customers.
At 1,500 customers, the city projects it will raise $200,000, which would go into a local Echo Lacombe Community Fund, which will support community initiatives.
Christie said residents will also benefit from good rates. Echo Energy’s three-year contract sells electricity at 7.95 cents per/kWh, which is nearly a cent lower than currently offered by Enmax.
The city has been looking at the partnership since spring. It is similar to arrangements that larger power providers, such as Calgary-owned Enmax and Edmonton-owned Epcor, have with their communities.
One potential roadblock was removed when a requirement was dropped that the city pay a $300 per customer prudential to insure against residents who dodge their bills. Christie said there is “minimal risk” to the community through its arrangement.
“There are no capital start-up costs. There’s no spending of taxpayers’ money for hoped-for returns down the road.”
Marketing costs are also expected to be minimal. Echo Energy is advertised on the city’s website and Facebook page and word of mouth is expected to help get the message out.
“I think we’re just going to go with a soft sell up front and just see how it goes.”
Lacombe has been watching Olds, where the Olds Institute for Community and Regional Development has been selling electricity through Mountain View Power.
That community has been steadily signing up customers with very little advertising, he said.