In a narrow vote, Edmonton city council voted Wednesday to transfer control of the city’s drainage infrastructure to EPCOR. The asset has a book value of more than $1 billion and includes nearly 6,000 kilometres in pipes.
The decision passed in a close vote of seven to six.
“I think that this will work out well for citizens in terms of the services,” Mayor Don Iveson said. “They should notice no change.
“I have no doubt in my mind that EPCOR will be owned 100 per cent by the City of Edmonton for the long term. It’s a great company, it’s a great asset, it produces a return.”
However, concerns were raised over transparency and that the company wouldn’t have to open its books to the extent the city does.
READ MORE: Stakeholders voice concern over EPCOR’s proposed takeover of Edmonton drainage utility
“At the end of the day, it’s still a different relationship,” Coun. Dave Loken said. “We’re still dealing with an arms-length entity and we just don’t have the control as city council.”
“Today with drainage, as with other city operations, any member of the public can find out a lot of what’s happening within their government,” said Lanny Chudyk, president of Civil Service Union 52.
“With EPCOR, it’s a different issue.”
Several clauses have been added to the deal to address transparency concerns. The city will have the final call on rate increases. The deal is described as a transfer, not a privatization, since EPCOR is owned by the city.
READ MORE: Edmonton city council to discuss EPCOR’s possible takeover of drainage
EPCOR already provides drinking water and cleans waste water.
Last October, a consultant found “strong merit” in EPCOR’s proposal to handover the city’s drainage branch to the utility company.
As part of the deal, EPCOR has promised not to increase drainage rates any more than three per cent annually through the end of March 2022. The company will pay a $75 million transition fee and promising to increase its dividend to the city by $20 million.
“Any growth that EPCOR has in other markets produces a return that comes back to the City of Edmonton,” Iveson said.
EPCOR also hopes its reputation will ease concerns in the case of outages and other unexpected situations.
“When there are major power outages, how do we respond? We respond immediately, with well-trained crews that have practice for those types of emergency situations,” EPCOR president and CEO Stuart Lee said.
“We can take that expertise and grow it outside of the city and sell it to other communities and, by doing that, increase our profitability and increase the dividend back to our shareholder.”
The transfer should be complete by this September.
WATCH: EPCOR wants full control of Edmonton’s water system
Still, before the final vote, several councillors pushed to delay the draining issue until after the municipal election.
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