A city monopoly on utilities wouldn't include gas, electricity and water, St. Albert's top administrator revealed this week, but would corner the market on non-traditional utilities such as waste-to-energy, garbage and recycling.
St. Albert chief administrative officer (CAO) Kevin Scoble said Monday a public utilities bylaw would give the city more levers to pull in generating and protecting new sources of revenue, in order to offset other decreasing revenue streams and reduce the need to raise taxes.
Scoble said competition is healthy, and the bylaw is not meant to stifle that.
“This is about seeking opportunities for collaboration, and the City of St. Albert has a lot of great ideas, quite frankly, and perhaps the City of St. Albert should get those opportunities they’ve been talking about before others take it from us,” he said.
Councillors discussed the bylaw during Monday's governance, priorities and finance committee meeting. The bylaw is slated to come back on Aug. 19 to regular council for second and third reading.
The bylaw would allow St. Albert to monopolize any utility service it may decide to offer in the future. It would also support the formation of a municipal utility corporation, although city administration stressed the bylaw could stand on its own. Administration is currently drafting a business case for a utility corporation, which is set to appear before council this fall.
Scoble said traditional utilities such as gas, electricity and water would not be impacted by the bylaw because of “natural monopolies” companies such as ATCO Gas and FortisAlberta have, and because the bylaw respects existing contracts.
Scoble said the city has franchise agreements with ATCO Gas and FortisAlberta to give exclusive rights for distribution of gas and electricity. Additionally, St. Albert has a long-term supply agreement with Epcor.
The bylaw also has a clause that would allow the city to give permission to companies that have interest in offering utilities the city already handles.
While the city may give permission for companies to provide utilities that would be otherwise prohibited under it, the bylaw states if the terms of that agreement are broken, offending corporations could face fines up to $10,000 or six months jail time.
St. Albert director of legal and legislative services David Leflar said the bylaw is about protecting ideas, and in a climate of traditional revenue “being squeezed and squeezed,” it can be an excellent source of revenue.
“If you don’t have the protection, a monopoly on exclusivity, you may find someone in the private sector swoops in and steals your idea (and) makes money on it before you can,” he said.
Although utility corporation talks were not on the agenda, the subject came up frequently during the conversation.
Leflar said while the two are not directly related, the bylaw would benefit a utility corporation.
Coun. Sheena Hughes – who opposed recommending second and third reading – said she would have preferred to have a business plan in front of her showing a corporation would be a viable option before having discussions.
She added she has never heard of a business creating a clause prohibiting anyone else from competing against them.
“I feel like you’re playing chess and I’m saying I’ll only play against you if you have only have a king and I’ve got all my pieces,” Hughes said.
Mayor Cathy Heron made the motion recommending council give second and third reading, and in closing comments said the bylaw would not be a detriment to residents, but a benefit.
"Current residents are not just protected under existing legislation and agreements, they are going to benefit from the revenue," she said. "Why would we do this if there wasn’t any benefit?"
After a lengthy discussion, the committee passed a motion recommending second and third reading to council. Hughes opposed the motion, and councillors Natalie Joly, Ray Watkins and Jacquie Hansen were not present.
