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​EPCOR has a proposal before City Council to bring all of Edmonton's water utility operations together under one roof.

Background

​EPCOR currently provides services for three of the four components of the City's water utility cycle – water treatment, water distribution and wastewater treatment. The City's Drainage Service utility ("Drainage") operates the wastewater and stormwater collection system. With a transfer, Drainage would remain 100% publically owned by the City through its ownership of EPCOR.

In June of this year Council voted to study transferring Drainage to EPCOR. City Administration hired Grant Thornton, an independent consultant to review EPCOR's proposal.

"The EPCOR Proposal has Strong Merit"

In its report to Council, Grant Thornton confirmed that EPCOR's proposal has "strong merit" and the "potential to bring benefits to the City, taxpayers, and ratepayers." Other findings include:

  • Lower Drainage rates with EPCOR in comparison to staying with the City.
  • EPCOR has the financial strength to support the capital investment needed to address growth, aging infrastructure and flood mitigation.
  • EPCOR will be able to increase and sustain an additional $20 million to the annual dividend. EPCOR paid the City a $141 million dividend for 2015.

EPCOR was created by the City in 1996 to deliver core utility services in Edmonton, build its expertise and grow its business across North America. Since then, EPCOR has developed a strong competency in utility cost and project management and competes for projects across the continent.

 

About the transfer

EPCOR and Drainage will be better together

Combining the technical expertise of Drainage employees with EPCOR's strength as a major utility services provider will reduce operating and capital costs – for the benefit of customers.

EPCOR will reduce Drainage operating costs by $5 million over 5 years. Coordination of work planning, safety performance, training, fleet and other areas would result in greater efficiency. EPCOR Water and Drainage have similar operations and if aligned, both would be more efficient over time.

EPCOR will Drainage reduce capital costs by 10% each year by using our proven processes for the effective management of planning, design and construction of large-scale capital projects.

Grant Thornton confirmed EPCOR's ability to deliver on operational efficiencies and capital cost savings in their report.

Flood mitigation

EPCOR has the expertise to develop a comprehensive "Stormwater Integrated Resource Plan" that will set out clear timelines for system improvements to reduce neighbourhood flooding and its impact. Working with Council, EPCOR will consult with communities to establish priorities for implementing improvements in a timely and affordable manner.

Drainage employees

There will be no layoffs. We are committed to welcoming all Drainage employees to EPCOR with comparable salary, benefits and seniority. We take pride in being an employer of choice and a safe and healthy workplace is always our first priority.

City Council as owner

City Council will continue to review and approve Drainage service levels just like it does today. This includes having oversight of all Drainage operating activities and capital plans, including those for flood mitigation.

EPCOR will report fully and openly on Drainage to the Utility Committee. We currently do this with Water.

EPCOR is a strong and growing company, 100% owned by the City of Edmonton. Our single focus is on providing safe and reliable utility services to customers.

Questions and answers

​Have more questions? We've got answers about:

  • Customers and taxpayers
  • Drainage employees
  • Oversight and regulation by City Council
  • Flood mitigation
  • Financial

Read the questions and answers

Questions and answers

 

Customer and taxpayers

How will customers and taxpayers benefit?

​The transfer will result in better outcomes for both customers and taxpayers. Customers will pay lower rates with EPCOR in comparison to staying with the City and taxpayers will benefit from EPCOR paying a higher dividend to the City.  The Grant Thornton Report has independently verified this conclusion.

Better outcomes for customers will result from operational efficiencies, lower capital costs and finding efficiencies in the delivery of support services.  City Council would continue to regulate rates and service levels just like it does for Drainage today. Customers will have one provider for the entire water utility cycle: drinking water treatment, drinking water distribution, wastewater collection, and wastewater treatment wastewater. EPCOR already bills for Drainage services today so customers will see no change in billing.

How will EPCOR achieve efficiencies of $5 M in operating costs and a 10% reduction in capital without impacting jobs, rates, or service delivery?

​Combining the technical expertise of Drainage employees with EPCOR's strength as a major utility services provider will reduce operating and capital costs – for the benefit of customers.

EPCOR will reduce Drainage operating costs by $5 million over 5 years. Coordination of work planning, safety performance, training, fleet and other areas would result in greater efficiency. EPCOR Water and Drainage have similar operations and if aligned, both would be more efficient over time.

EPCOR will reduce Drainage capital costs by 10% each year by using our proven processes for the effective management of planning, design and construction of large-scale capital projects.

Grant Thornton confirmed EPCOR's ability to deliver on operational efficiencies and capital cost savings in their report. We have a strong track record of completing major capital projects on-time and on-budget.

Drainage employees

How will you protect the employees? What have the unions said about this proposal?

​There will be no layoffs. We are committed to welcoming all Drainage employees to EPCOR with comparable salary, benefits and seniority. We take pride in being an employer of choice and a safe and healthy workplace is always our first priority.

EPCOR has engaged all three unions representing Drainage employees. We have provided responses to employee questions in the Administrative Report and will continue to work in partnership with the unions and other employees to ensure a smooth transition.

Oversight and regulation by City Council

How will the City ensure it has proper governance, control and oversight over Drainage if the transfer is approved?

​City Council will continue to have the authority to oversee all aspects of Drainage in the same way it does today.  This includes approval of customer rates and full oversight of all Drainage operating activities and capital plans, including those for flood mitigation.

EPCOR is committed to reporting on all aspects of Drainage operations under Utility Committee oversight in a transparent way.

EPCOR remains 100% publically owned by the City of Edmonton.

Flood mitigation

How will EPCOR handle flood mitigation? Can we trust you to deliver on the plan?

​EPCOR is very committed and well positioned to develop a comprehensive flood mitigation program for the City of Edmonton.  The combination of Drainage employees' expertise and EPCOR's capital planning, procurement, execution and operational expertise will be stronger than if either company were doing these alone. 

Drainage has made an excellent start on identifying all of the actions that could be taken to improve the stormwater handling capability of older parts of Edmonton. These areas are not designed to handle stormwater flooding events as well as new neighbourhoods.

The next step is to develop a comprehensive Stormwater Integrated Resource Plan (SIRP) that determines what improvements should be made first and then, where they should be made, in the coming years.  Working with Council, EPCOR will consult with communities to establish priorities for implementing improvements in a timely and affordable manner.

EPCOR has extensive experience in developing comprehensive long range integrated resource plans with community consultation. We look forward to the opportunity to combine our experience and expertise with that of Drainage employees to deliver an excellent and proactive SIRP for Edmonton.

When severe storm events and urban flooding do occur, like Drainage today, EPCOR has proven that it can provide a timely and effective emergency response on a 7x24 basis that is fully coordinated with municipal operations.

Will be EPCOR be eligible for government grants for flood mitigation?

Yes. As a 100% municipally owned utility corporation, we expect that EPCOR would be fully eligible for the vast majority of government grants available. The City would still qualify to apply for grants for "dry ponds", which it will be retaining.

Financial

How can EPCOR maintain rate increases at just 3%, maintain service levels and increase the dividend by $20 million in the first year? Will the dividend go down in time?

​EPCOR can limit rate increases to customers by realizing operating and capital cost efficiencies.  EPCOR's financial strength following a transfer of Drainage will give it the ability to increase the dividend by $20 million annually.  The Grant Thornton Report provides more specific details on these topics and supports this conclusion.

While EPCOR cannot guarantee the dividend amount, it has never once decreased or suspended the dividend since it was created in 1996. Since that time, the dividend has increased from $62.3 M to $141 M annually.