A plan detailing costs, processes, systems and structures for possibly shifting The City’s electric utility to a Municipally Controlled Corporation (MCC) will be presented to City Council before the end of 2024, per City Council’s direction at today’s regular meeting.
Modernization of The City’s electric utility is all about ensuring reliable service, maintaining affordability and adapting to future energy needs. Over the past two years, administration studied different models and options for how the electric utility could operate, and the development of this transition plan will enable administration to further identify costs, risks, and considerations related to implementation of a new model.
“Today’s City Council decision enables us to proceed with focusing our work on exploring the evolution of our electric utility to a municipally controlled corporation. This is a governance review, and our citizens and staff will not see any changes resulting from today’s meeting. We have lots of work ahead before we land on a decision on model,” said City Manager Tara Lodewyk. “We have proudly served our citizens with utilities since 1901 - over a century. Utilities are fundamental services we provide, and with a rapidly changing industry, increasing expectations from our community, and with our desire to grow, we need to review how we manage the business to ensure we continue to do this in the best way for our community.”
While City Council directed the exploration of an MCC with the development of a transition plan, a decision related to the potential new model will occur at a future meeting when the plan comes back to City Council. At that time, the decisions and options in front of Council will be:
- Continue to operate the electric utility as a City department, implementing additional improvements and structural changes to ensure its long-term sustainability.
- Establish a municipally controlled corporation, creating a new entity with a dedicated board to manage and operate the utility.
- Sell the electric utility, and no longer be in the business of electricity.
As this work occurs, The City is committed to sharing information with its employees, citizens and industry stakeholders. This is a complex process, and there will be many steps along the way.
“Now is the right time for this work. We are well positioned to establish a new governance model that takes into account our unique role as owners of electrical infrastructure, especially during a period of rapid evolution and change in the electricity sector," stated Mayor Johnson. "The ideal model for Red Deer is still uncertain, but City Council recognizes the significance of this decision. We are committed to prioritizing the needs of our customers and our community as we delve into the specifics and evaluate the available options."
We are being intentional in our approach to understanding which governance model will best serve our community’s need for the future. Any changes pursed must truly address the challenges of today.
A municipally controlled corporation (MCC) is an entity established and owned by a municipal government to provide specific services or undertake certain projects that are typically within the realm of municipal responsibilities. These corporations operate with a degree of autonomy but are ultimately accountable to the municipal government. The purpose of creating an MCC can vary, but common reasons include enhancing efficiency, providing specialized services, fostering economic development, and managing public assets.
More information will be shared following City Council’s meeting on Monday.