At the June 15th, 2016 City Council meeting, EPCOR Utilities Inc. asked Council to consider transferring Drainage Utilities Services over to their operations. EPCOR currently provides water treatment, water distribution and wastewater treatment services, however the City’s Drainage Utility operates the wastewater and stormwater collection system. They believe that bringing all of Edmonton’s water utility operations under one roof will benefit the City in many ways.
Based off the discussion, here is the motion that was passed: “That Administration complete an independent assessment of the EPCOR proposal, and be reimbursed by EPCOR for the cost of the assessment, and return to the October 25, 2016, City Council meeting with a full report, with the analysis to include:
- review of EPCOR’s eligibility for Federal and Provincial grant funding
- confirmation on asset transfer decision making (roles of Council or Shareholder)
- how governance and responsibility around risk and liability, such as for flooding, climate change and other unpredictable factors would be managed
- implications of assets and liabilities reverting back to the City in the future
- comparison of EPCOR’s proposal against known utility-type transactions in the marketplace
and that Council hold a non-statutory public hearing (to be scheduled after the October 25, 2016, City Council meeting) on the EPCOR proposal before Council makes a decision on the proposal.” You can read the agenda (item 6.4) and motion here
EPCOR was created by the City of Edmonton twenty years ago with the City transferring its power generation, transmission, distribution, and customer service operations to the company in 1995. The City’s water utility was later transferred in 1996, and the Gold Bar Wastewater Treatment Plant in 2009. EPCOR’s operations are overseen by an independent Board of Directors and the City continues to serve as the regulator for all water and wastewater rates.
While I remain skeptical about the proposal, I voted in favour of this independent assessment for a few reasons. First of all, I believe that a crucial part of my role as City Councillor is to gather the best information available in order to make decisions that best serve the residents of Edmonton and Ward 1. This third-party independent report will provide that information at no cost to the City, as EPCOR agreed to pay for this. Secondly, we were assured that all employees would keep their employment status at comparable salary, benefits and seniority, so while this could impact certain aspects of their employment, job security will not be threatened thereby not leaving employees in a state of limbo over the coming months while this analysis takes place.
There are a few additional points I want to share about the current proposal. The City would continue to be responsible for drainage planning and development for new neighbourhoods. Council would continue to regulate and approve rates just like it does with EPCOR Water. EPCOR would hold Drainage rate increases at 3% for five years, the annual rate increase in the current Drainage budget. The City would continue to be the sole shareholder of EPCOR and maintain 100% ownership of these assets. And lastly, we made sure to schedule a non-statutory Public Hearing before making a decision so that residents are able to voice their concerns or support for the proposal. Hearing from the public is always an important part of any decision making process, even more so when it comes to critical public infrastructure. I encourage all of you to read the full report when it’s released in the fall, and take the opportunity to engage with Council on this very important decision.
Link to proposal from EPCOR here
Link to City Council proposal from administration here
Co-authored by Andrew Knack and Kasey Machin