(rdnewsNOW file photo)

By Ian Gustafson

Years in the making

Red Deer city council approves electric utility transition to an MCC

Jun 24, 2025 | 3:29 PM

The phrase, “generational decision” was used by Red Deer city council and administration throughout discussions at a public hearing held Monday night through Tuesday morning this week.

Those discussions culminated in a three-year process that led to council’s decision on Tuesday to approve a proposed resolution to transition the city’s electric utility to a Municipally Controlled Corporation (MCC).

Mayor Ken Johnston and councillors Bruce Buruma, Cindy Jeffries, Dianne Wyntjes, Lawrence Lee, and Vesna Higham voted in favour of the resolution. Meanwhile, councillors Kraymer Barnstable, Victor Doerksen, and Chad Krahn were opposed.

The decision didn’t come quickly and wasn’t taken lightly by council who asked numerous questions to administration, listened to public concerns, and deliberated between each other. It’s a project that’s been years in the making.

“As you boil it down and as you try to land in a decision, where I landed was I do have faith in future councils, I do have faith that we’ll get this board right,” said Mayor Ken Johnston. “What tips me in the direction of the MCC is it’s continuing flexibility. It continues to give us off ramps, options, and the governance model that citizens can respond to…. I think we’ve been faithful to the public here, transparent, and able to be able to say we’ve looked at every alternative.”

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The transition to an MCC from the current electric utility is expected to be fully set up by 2028.

Currently, the electric utility is owned by the city and provides ongoing dividends as a return on investment. Council oversees the operation of the grid and it provides a revenue stream.

However, the electric industry is changing constantly and administration’s recommendation comes from discussions and a process over the last three years. In 2022, the city began exploring ways to modernize the electric utility by looking at nine different options that were later trimmed down to three. In 2023, administration brought forward a business model review about the risks, and impacts of each option.

In 2024, council received a thorough study on all three options which recommended an MCC as the best option. Council directed administration to create a plan. The different options included staying on the same route and operate the electric utility, the second was an MCC, and the third was to divest.

An MCC is a corporation controlled by a municipality to manage assets on the municipality’s behalf. The utility stays publicly owned by the city and operates as a business at arm’s length with more flexibility and independence, and anticipated financial benefits. The MCC has it’s own board of directors, which will be appointed by council. There will also be executive leadership. In addition, the city will also no longer have to stay on top of the day-to-day operations, as before. Ultimately, the MCC is expected to strengthen long-term financial and operational sustainability

“I thought about this and came back to some wisdom my dad often shared with me when making big decisions. It was ‘get the facts. Make sure you have all the facts for your decision.’ Listening to the voices in our community and learning things in the public hearing, that there’s opportunities for joint ventures and partnerships,” said Councillor Chad Krahn. “Those seem like black boxes that I don’t understand what could look like… and so at this point, I’m not ready to support an MCC.”

Modernizing the electric utility has a price tag, which is expected to be a one-time payment of approximately $4.1 million and ongoing operational costs of $1.1 million per year. These estimates from administration are based on benchmarking other Canadian utilities and assessing the specific needs of the EU MCC.

To gauge the public’s thoughts, administration held five open houses on the utility with one specifically for Chamber members. Events were lightly attended with the biggest attendance at the Golden Circle.

They also held a public hearing on Monday evening where citizens expressed concerns and provided words of support for the potential decision.

Red Deer resident Margaret Day said it was important that the city retained the electric utility.

She explained if the city decided on an MCC, the big corporations won’t care about the citizens of Red Deer. As an example, under the current electric utility, she says if you have an issue, all you have to do is call the city and they typically fix it. However, she’s skeptical the bigger corporations would do the same.

“They’re purely for profit and have no concern for the public,” she said.

Meanwhile, Len Kangas said it’s a longterm decision and urged council to think further ahead than just five years.

He also expressed that when a board of directors is chosen, it’ll be important to get it right. Ultimately, he was torn on what council’s decision should be.

“I favour [an MCC] but it has to be done right… It could cost future generations a lot of money.”

The city will begin implementation planning in the months ahead, including the development of the MCC’s governance framework and transition details. The Electric Utility will continue to operate under its current structure until the transition is complete.