Can a utility company owned by a city survive in Alberta’s deregulated market? Calgary’s ENMAX is up for sale, but how was the decision made? What’s the rush to get rid of it? As the city heads to the polls to pick a new mayor, ENMAX has become a powerful election issue. Mayoralty candidates Dave Bronconnier and Bev Longstaff go head to head for Business Edge readers.

As a candidate for Mayor, I think it’s important for Calgarians to know why I am in favour of selling the city’s now unregulated electrical distribution business.

I have heard from many of you on both sides of the issue, but I remain steadfast in my position that pursuing the opportunity to sell ENMAX is the best position for Calgarians.

To those who say the city is moving too fast, the facts are this process began many years ago. It started when the provincial government began restructuring the industry in 1996, prompting the city to incorporate ENMAX as a wholly owned subsidiary in 1998.

Then, in January 2001, council asked the city administration to review the ownership of ENMAX in light of a fully deregulated retail market.

Your representatives on council, several of whom sit on the ENMAX board of directors, have carefully reviewed all options. Board members and outside experts alike feel the city should not be in the power business. I agree.

For almost 100 years, the City of Calgary’s electric utility (now ENMAX) has provided Calgary with excellent service in a very structured and regulated environment.

Since Jan. 1, 2001, deregulation has forced ENMAX to buy energy in a volatile commodity market while competing with a variety of other power retailers ranging from assorted multinationals to Epcor, the City of Edmonton’s electric utility.

Competing and surviving in this new free-smarket environment will entail considerable risk and a considerable investment to make ENMAX competitive in the fight for market share throughout the province.

Why should Calgarians hold a company that increasingly needs to operate outside of the city in order to survive?

Two other factors are also compelling:

1. All indications are that ENMAX is now at the peak of its financial value and will attract a handsome price from prospective private-sector investors. But in this new market much can change in a very short time. There is a very good chance that next year or even next month, ENMAX will be worth less than it is today due to lower wholesale prices for electricity. Only those companies with deep pockets and a wealth of deregulated experience will remain on top. There is a real risk the value of ENMAX will fluctuate with volatile electricity prices and increased competition.

2. I believe that in the competitive, deregulated environment created by the provincial government, public ownership of an electrical distribution and retailing concern is a risky proposition because the market, not the company, sets the prices. There are many examples of provincial and federal governments opting out of utility ownership over the past 10 years. The demise of our electrical monopoly is upon us and must be considered with respect to the sale of ENMAX.

The experts I have consulted believe that even if the ownership of ENMAX changes, our power bills likely will not. The reason for this is the cost of power is set by the marketplace.

I have considered carefully the arguments for and against the sale of ENMAX. It has been on city council’s agenda, one way or the other, since last February. In my opinion, selling ENMAX for the “right” price to the private sector is the best deal for taxpayers.

Calgary will benefit in many ways from a successful sale and Calgarians can expect to have meaningful input over where the proceeds should be directed. Some exciting possibilities are on the table, including one proposal to create a municipal “centennial” fund that would likely generate a greater revenue stream for the city than ENMAX provides. An open, public discussion on how to use such proceeds will be a top priority of my administration.

My long experience on this council has helped me to arrive at what I believe is our best option. My experience has also taught me another lesson: It is important to listen because I don’t have all the answers.

In the end, some may not agree with our decision. That is democracy. I have listened to and carefully considered the views of Calgarians on this important issue, but I also believe that taking a firm position is a responsibility of leadership. It is vital for Calgarians to question their candidates about their position on this and other important issues.

We are at a major crossroad in our city’s history. As a Calgarian first, I’m confident that selling ENMAX for the “right” price is the right decision because I’ve wrestled with it for years both as a citizen and council member.

We have a diamond in our hands. Let’s get our full value while it still sparkles.