St. Albert will scale back its pursuit of a Municipal Energy Corporation (MEC), city council voted on Monday.
The MEC's structure previously centred on growth and included multiple revenue streams, with an expensive corporate structure requiring around $400,000 to set up in the first year, according to the feasibility report brought before council in July of last year. The corporation’s main source of revenue centred on a 15-megawatt commercial solar farm to be located in the city’s Badger Lands, but additional projects such as Level 3 electric vehicle charging stations (high-speed stations that fully charge a car in 30 minutes) and rooftop solar panels were also included in the proposal.
On Monday, Regan Lefebvre, St. Albert’s senior manager of utilities, presented a motion to council that would substantially scale back the City’s exploration of an energy corporation. Instead of pursuing a business plan and market impact analysis of the MEC described in July 2021, City administration recommended exploring an MEC only as it is made necessary should council choose to pursue the creation of a commercial solar farm at its upcoming July 13 meeting.
“What was envisioned was a much larger utility entity that would grow,” Lefebvre said. “In this case — tied to the solar farm — we're going to look at the minimum that's required."
Lefebvre said there are “much smaller municipalities than the City of St. Albert” which have set up municipally-controlled corporations that don’t have dedicated boards or dedicated employees.
“It's sort of a part-time job off the side of the desk that employees will undertake,” Lefebvre said. “We don't expect there's a lot of big decisions that need to be made other than selling the electricity and just making sure that all of those contracts are in place.”
In addition to using pre-existing staff to run its operations, Lefebvre said the MEC would be governed by council members instead of an external governing body.
Going with the pared-down option will mean that around $73,000 of the remaining $75,000 in funding approved for the MEC's business plan and market impact analysis will be returned to the stabilization reserve.
MEC only necessary with commercial solar farm: Lefebvre
Administration is currently preparing a detailed cost-analysis of three solar-farm options for the city-owned Badger Lands — as well as alternate options, including commercial, residential, and industrial development — to come before council July 13.
The three solar-farm options include a commercial solar farm, a smaller farm to power the city’s own facilities, and a hybrid model combining both options. During a Feb. 7 meeting, council directed administration to pursue detailed design of the hybrid option to best keep the first two choices open.
Lefebvre told councillors Monday that an MEC would only be necessary if council chooses to pursue a commercial solar farm.
“There’s a higher level of scrutiny that’s expected,” Lefebvre said of the commercial solar-farm option, noting that the city would need separate accounting to calculate the taxes it would pay to other levels of government, and a straightforward way to prove that the farm is not being subsidized by the city through exemptions — for example being exempt from municipal taxes.
When asked by Coun. Mike Killick whether council could still explore other aspects included in the original MEC feasibility report, such as EV charging stations, Lefebvre said for some of the options it already is, noting the charging stations are still on the table as a separate project.
Additionally, Lefebvre said the City is still looking into another aspect of the MEC as it was previously proposed: energy marketing. In the former MEC proposal, this took the form of an agreement with a company called Utilitynet to market its energy services to residents of St. Albert in exchange for a commission.
“We expect that we do not need a Municipal Energy Corporation in order to participate as an energy marketer,” Lefebvre said.
Coun. Sheena Hughes said she appreciates the scaled-down approach to the MEC.
“I think it's reduced the risk substantially,” Hughes said of the recommendation. “It has narrowed the focus to specifically one area, which was really the only area of the initial MEC that was projected to generate any revenue … it helps me gain more confidence about what's going to be coming forward in July.”
The motion to cancel administration’s pursuit of an MEC business plan and market impact analysis, and to have administration explore instead the simplified MEC as it would be of use to the commercial solar farm, passed unanimously.
