Billions Invested in the U.S. by Alberta Regulated Utilities
Dear Mr. Nenshi,
Looking back at your record as Mayor of Calgary – the city, as the sole shareholder of ENMAX, approved the investment of $2 billion to buy Versant Power, a utility in Maine.
You supported ENMAX’s highly leveraged investment in the United States (U.S.) and said: “The purchase by the city-owned company involves ‘good debt.’ ”
Times have changed, and municipalities throughout Alberta will likely be affected by tariffs imposed by President Trump. Given this new reality and that you are now the leader of the NDP, what is your opinion on governments supporting/promoting utilities that have expanded their business interests by investing in the U.S.?
As a local taxpayer, a local company, and a strong proponent of Canadian sovereignty, we believe Premier Smith should encourage our major municipal utilities to do the right thing and bring their foreign investment dollars back to Alberta. If our government wants to promote ‘Affordability,’ the big regulated utilities must focus on reducing transmission, distribution, and overhead administrative charges.
Mr. Nenshi, if you were Premier, would you approve of and/or pay no heed to municipalities investing in the U.S. as you did when you were Mayor of Calgary?
Although ENMAX purchased a utility in Maine, they are not the only ones lured to the United States. EPCOR expanded its utility business into Arizona, Texas and New Mexico. Alberta’s third largest Rate of Last Resort provider is run as a division of NRG Energy, with headquarters in Houston, Texas. We strongly recommend to the Minister of Affordability and Utilities, Nathan Neudorf, that Alberta stop approving, subsidizing, and pandering to the regulated utilities, who have moved billions of dollars out of the province.
Mr. Nenshi, since you authorized the investment of ENMAX in Maine, we think you might find the following numbers interesting:
- In last year’s annual financial statement, the Consolidated Revenue (ENMAX Power, Versant Power, ENMAX Energy) totalled an impressive $3.8 billion. However, if you dig deeper into the financial statements (2023 fiscal year results), you will see a net loss of $16 million.
- Versant Power has assets of $2.5 billion in Maine, representing 27% of the total $9.4 billion in total assets of the city’s utility.
- The dividend paid to the City of Calgary last year was $95 million, which we applaud. But then again, you need to understand why the utility’s earnings increased. They are due in part to an increase in transmission and distribution margins, which is the main complaint consumers have when they receive their monthly utility bill. Putting the $95 million dividend into perspective, it represents only a 1% return on the company’s total assets invested.
- The U.S. company’s EBITDA is respectable—at $133 million—making it an attractive acquisition. If the City of Calgary is cash-strapped, raising taxes and asking the province to help fund the shortfall in money needed to build municipal infrastructure projects such as the Green Line is wrong. Perhaps the city should sell Versant Power to reduce the debt load and invest the proceeds in Alberta, not the USA.
Ask yourself, Mr. Nenshi, in retrospect, do you still consider this a “good debt”? What are your thoughts?
Today, ENMAX is laying off people and recently sent a note to Alberta Commercial and Industrial (C&I) clients stating that they will no longer provide electricity to them, telling these Oil & Gas customers to find another retailer.
When core industries in Alberta’s supply chain are now facing possible US tariffs on exports – the last thing they need is uncertainty in the supply of retail energy services needed to run their facilities. The timing of ENMAX’s exit from the C&I retail market should concern our political leaders.
FOOTNOTES:
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