Maine Residents Tell ENMAX to “Butt Out!”

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By: Darren Chu

It’s been a difficult few years for Calgarians. COVID decimated the economy. Then global supply chains were impacted. The cost of living has increased, and inflation has risen to new heights. Moreover, these factors are not hidden or hard to see – we see them in the news daily. What’s even more alarming is that Mayor Gondek has called a rare “Special Meeting of Council” to address the affordable housing crisis, to be held two days after Council hears feedback on their new housing strategy.

None of the crises we’re currently seeing happen overnight. The affordable housing crisis has long been an issue for Calgary, yet ENMAX still proceeded with their deal to purchase Emera Maine (now Versant Power) to the tune of $1.8 billion in 2020. The question Calgarians should be asking is, has this investment paid off?

In 2020, ENMAX’s financial statements show Versant Power had an operating profit of just $62M. In 2021, this value was $80M, and then $73M in 2022, for a grand total of $215 million. At a time when Calgarians are struggling with affordability, wouldn’t that money have been better spent here? Now consider the dividend ENMAX paid the City of Calgary in 2022 was a mere $62 million and only $58 million the year before.

Let’s take it one step further. In June 2020, Wayne O’Connor was hired as CEO of ENMAX. Mr. O’Connor was President and Chief Operating Officer of Emera Energy (now Versant Power). Then, in October 2021, he was abruptly let go. A report issued by ENMAX outlined $3.8 million in compensation for just ten months of work in 2021. ENMAX representatives have said they needed to provide competitive compensation to get top-tier talent, but let’s be honest: $3.8 million seems extravagant for less than a year’s worth of work.

There’s more. ENMAX owns several natural gas-fueled generation facilities, including the Shepard Energy Centre (the province’s largest natural gas generation facility). Revenue from generation has been incredibly high over the last few years – so much so that in their 2022 Financial Report, ENMAX highlighted a $301 million increase from 2021 ($919 million) to 2022 ($1.2 billion) with the following note, “Higher electricity prices contributed to increase in generation and retail revenues.”

These “higher electricity prices” are the main driver behind the increased Regulated Rate Option (RRO) prices that ENMAX has been charging consumers. The RRO price for August was just under 31.8 cents/kWh; in September, it’s 26.5 cents/kWh. These RRO prices waterfall into the Local Access Fees (ENMAX sets the RRO, and the Local Access Fee is indexed to said RRO, leaving the City with windfall tax revenues). It’s a shell game, and the City needs to put a stop to it.

ENMAX is currently faced with a new problem. Residents in Maine have initiated a referendum on whether Pine Tree Power, a non-profit utility company owned by the people of Maine, should buy out Versant Power and Central Maine Power (the two privately owned utilities in Maine). To combat the threat to their investment, ENMAX has spent $7.5 million to fund a campaign urging Maine citizens to vote to keep Versant (CMP has also heavily invested in this campaign).

When you tally up ENMAX’s expenditures on matters related to Versant Power, you have $1.8 billion on the acquisition (debt-financed), $3.8 million on an executive who came from Emera Energy, and another $7.5 million on a referendum campaign. Naturally, the City of Calgary supports ENMAX’s decisions to protect its investment. Do you?

Moreover, on their website, Versant Power states they employ over 530 employees in the state of Maine. That’s roughly a third of how many people ENMAX currently employs here in Alberta. Shouldn’t those jobs have been given to Albertans?

Calgary’s Mayor is responsible to those who voted for her (and those who didn’t). She has already stated that she intends to have City Council investigate ENMAX’s Local Access Fees (found on all electricity invoices) and the estimated $300 million that the City will net from those fees this year. She should be directing City Council to also investigate the Municipal Franchise Fees (found on all natural gas invoices), which net the City an additional $150 million in 2023. If Versant Power is profitable, why does the City of Calgary insist on continuing to gouge consumers through ENMAX? We hope City Council will not look at “utilities” and “affordable housing” as two separate issues but rather as two closely intertwined issues that require a more complex solution.

Should ENMAX, as a municipal utility, have the same luxury as other privately owned corporations? The City of Calgary is the sole shareholder of ENMAX Corporation; it’s time that Calgary (and, by extension, ENMAX) answers to its residents. The residents of Maine have asked Calgarians to show them the same respect they would expect if the roles were reversed. It doesn’t seem unreasonable to ask why this money isn’t being spent here to help Calgarians. It should also be noted that although the Versant Power deal wasn’t part of Gondek’s mayorship (it happened under Nenshi), the buck still stops with her. Former Mayor Nenshi was once quoted as saying it’s “good debt” when asked about the deal to buy Emera Maine, but how can that be when there was a more immediate need here in Calgary?

Mayor Gondek, we are calling on you and the City Council to take a serious look in the mirror and ask yourselves, what are you actually doing for Calgarians in their time of need?

When the City looks at Local Access Fees, they need to factor in the deal with ATCO Gas on Franchise Fees, the windfall profits from the Shepard Generation Plant, and the $1.8 billion in debt that City Council approved in 2020. Do you agree with Nenshi’s assessment of the investment as “good debt” when he allowed ENMAX to expand into the United States?

The bottom line is that Calgarians are the true shareholders of ENMAX, and they deserve a say when it comes to the literal billions of dollars that clearly aren’t being reinvested in the City of Calgary. Mayor Gondek has “talked the talk,” now she needs to walk the walk.