Enmax open to mayor’s call for it to run Calgary’s water system

Councillors are split on Mayor Jeromy Farkas’s pitch to let Enmax take over Calgary’s beleaguered water system, but the city-owned power utility itself said it’s “well positioned” to run another service.

Farkas hasn’t formally brought the idea to city council or Enmax, but said Wednesday he views it as a way to fulfil the recommendations of the panel that reviewed the city’s handling of the catastrophically failing Bearspaw water main.

That group recommended city hall spin off its water department into a standalone company, and said the “municipally controlled corporation model,” like Edmonton-based utility Epcor, is a model structure to emulate.

Epcor is wholly city-owned like Enmax is, but it runs the Alberta capital city’s electricity and water systems. While Enmax collects Calgarians’ water, sewage and waste management fees, the city runs those services.

Farkas has pledged to implement all the review panel’s recommendations, and sees handing water over to Enmax as an option that doesn’t include the same costs as starting up an additional company.

“I’m just really looking at ways that we can action those reports without inducing rates or tax shock for ratepayers or taxpayers,” the mayor told CBC News in an interview.

“And I think having a pre-existing entity with an accountable governance mechanism with a proven track record of success, which Enmax is, it makes a lot of logical sense from my perspective.”

The company itself was quick to express interest in the mayor’s idea, saying in a statement Wednesday that water aligns with its “growth strategy.”

“As a utility with strong governance and operational discipline, Enmax is well positioned to operate water services and welcomes the opportunity to work with the city to explore this option,” spokeswoman Alexandra Frison wrote in an email. 

“We have proven expertise in operating and maintaining critical infrastructure in Calgary and, with this, our priority will be to bring our expertise, capabilities and resources to support any constructive conversations.”

Farkas also noted that because the electrical company already assists on city infrastructure expansions in new suburbs and on upgrade projects, there could be a solid case for consolidating all utility work into one company.

The mayor said he’s in the early stages of exploring this idea, while many fellow councillors were only beginning to chew it over.

“I have a lot of learning to do before answering that question in a way that is constructive and completely understands the issue,” rookie Coun. Nathaniel Schmidt told reporters Wednesday.

Andre Chabot, the longest-serving councillor, said if Calgary was going to pursue turning over water management, moving it to the existing bureaucracy and structure within Enmax makes sense.

But he’s skeptical the review panel had it right about the need to move water services out of city hall’s direct oversight. 

“I think it could be managed internally and at a much lower cost than if it does end up going to Enmax,” Chabot said.

Coun. Dan McLean said he’s “supportive” of Enmax taking over Calgary’s waterworks. “But a lot more has to be discussed, a lot of parameters here.”

Council has oversight of Enmax because the city is its sole shareholder, but seldom votes on any particular business decision by the subsidiary.

Farkas also made a second, separate proposal for Enmax’s affairs. He said it should consider selling Versant Power of Maine, seven years after Calgary’s utility acquired the northeast U.S. energy company for $1.8 billion.

He’s suggesting that Enmax could redirect sale of this asset to pay for the Bearspaw feeder main replacement project and other infrastructure needs, which are likely to be paid through higher utility rates for Calgarians.

“What are some ways that we can creatively use what we have rather than just asking ratepayers and taxpayers to pay that much more next year?” the mayor said.

McLean lent his early support to this suggestion. “I don’t see why we’re involved in an American utility — and we could probably use the money.”

Chabot, however, cited the revenue upside that Versant delivers to Enmax, contributing to the dividend the company deposits annually into city coffers.

Enmax itself signalled some resistance to being told to unload its Maine utility.

“Versant Power is a regulated utility and part of Enmax’s long‑term strategy to support stability and reduce risk,” the company’s statement said. “There has been no discussion at the board level regarding divesting Versant.”