UPDATE: Major Alberta Utilities Investing Outside of Alberta
By: Nick Clark
In March 2019, we published a blog about how Calgary’s local electrical utility, ENMAX, was looking with envy at the market in the US. It is now just over a year later and they have taken the plunge and jumped the fence, borrowing billions.
The deal to purchase Emera Maine, a subsidiary of Halifax-based Emera Inc., was recently completed. Adding $1.8 billion in new debt to ENMAX’s balance sheet.
It is anticipated that the acquisition of Emera Maine (now re-branded Versant Power) will help ENMAX generate stronger returns and potentially increase the annual dividend it pays to the City of Calgary. It could be good news for taxpayers if it happens.
However, when we asked the Mayor of Calgary and our City Councillors what they anticipate the increased dividend might be, they would not or could not answer the question. How is it possible to agree to debt finance $1.8 billion without knowing what the potential profits will be? Why the silence?
Another critical question is, at times like these, wouldn’t it have been more prudent to invest in Alberta rather than Maine to help build and diversify our local industries? Why did Emera Inc. sell off their holdings in Maine? To reduce debt. As a City of Calgary taxpayer, what did we actually buy? More debt.
Some critics questioned whether ENMAX’s balance sheet is strong enough to support this move. With the intended purchase, the credit rating agency Standard & Poor’s downgraded ENMAX over concerns about debt related to the transaction.
While the critics questioned the strategy, expanding into Eastern USA might be a brilliant business move. Only time will tell. The other side of the argument is that this will help increase the regulated side of ENMAX’s business. It is like the game of monopoly: always buy the utilities!
The stewardship control of the corporation is now being handed over by Wayne O’Connor, appointed ENMAX President and Chief Executive Officer effective June 22, 2020. Most recently, he served as President and Chief Executive Officer of Nova Scotia Power (owned by Emera Inc.) plus held a series of executive leadership positions across Emera Inc. companies, including President and Chief Operating Officer of Emera Energy. On the positive side of the ledger, he obviously and most surely understands the nuances of the Emera Maine business unit that ENMAX purchased. It is a smart move.
The question to be debated remains: should our city, which is financially struggling, be moving into the US: especially now? Why not invest in Alberta?
Here is an opportunity for Mr. O’Connor to consider when he takes over the leadership of the company.
If you are looking to reduce your cost of energy and support a truly local company, consider switching over any one of the 20 local Energy Marketers operating under the UTILITYnet umbrella. Together, the small privately owned, local businesses in our network have customers in over 400 communities in Alberta and can compete head-to-head with large utilities like ENMAX, ATCO, and Direct Energy.
As an added bonus, to help our customers save even more each month, we recently added high-speed Internet services to our portfolio with the introduction of Q Wave, and are now offering Internet services in competition with Shaw and Telus.
Many of the Energy Marketers in our network are offering special bundling options. One such example is Spot Power, which is offering to reduce electricity and natural gas services administration fees to $0 when a customer bundles Internet with their existing services.
What makes us different? We have been in the Alberta energy market, supporting the Oil and Gas industry since 1978. UTILITYnet is privately owned, profitable, has zero debt, and all of our employees (technology, data processing, customer care, and billing) are proud Albertans. We have not shipped jobs offshore and the rates offered by our network are competitive.
In today’s tight employment market, most importantly, we are hiring. In the field of systems, if you are a seasoned programmer , with experience in relational databases, PL/SQL, and also interested in data analytics, drop us a line (1316, 9th Ave SE., Inglewood, Calgary AB T2G 0T3).
Cheers,
Stay Strong, Keep Safe, Be Kind.
Nick Clark Director,
Utility Network and Partners Inc.
The deal to purchase Emera Maine, a subsidiary of Halifax-based Emera Inc., was recently completed. Adding $1.8 billion in new debt to ENMAX’s balance sheet.
It is anticipated that the acquisition of Emera Maine (now re-branded Versant Power) will help ENMAX generate stronger returns and potentially increase the annual dividend it pays to the City of Calgary. It could be good news for taxpayers if it happens.
However, when we asked the Mayor of Calgary and our City Councillors what they anticipate the increased dividend might be, they would not or could not answer the question. How is it possible to agree to debt finance $1.8 billion without knowing what the potential profits will be? Why the silence?
Another critical question is, at times like these, wouldn’t it have been more prudent to invest in Alberta rather than Maine to help build and diversify our local industries? Why did Emera Inc. sell off their holdings in Maine? To reduce debt. As a City of Calgary taxpayer, what did we actually buy? More debt.
Some critics questioned whether ENMAX’s balance sheet is strong enough to support this move. With the intended purchase, the credit rating agency Standard & Poor’s downgraded ENMAX over concerns about debt related to the transaction.
While the critics questioned the strategy, expanding into Eastern USA might be a brilliant business move. Only time will tell. The other side of the argument is that this will help increase the regulated side of ENMAX’s business. It is like the game of monopoly: always buy the utilities!
The stewardship control of the corporation is now being handed over by Wayne O’Connor, appointed ENMAX President and Chief Executive Officer effective June 22, 2020. Most recently, he served as President and Chief Executive Officer of Nova Scotia Power (owned by Emera Inc.) plus held a series of executive leadership positions across Emera Inc. companies, including President and Chief Operating Officer of Emera Energy. On the positive side of the ledger, he obviously and most surely understands the nuances of the Emera Maine business unit that ENMAX purchased. It is a smart move.
The question to be debated remains: should our city, which is financially struggling, be moving into the US: especially now? Why not invest in Alberta?
Here is an opportunity for Mr. O’Connor to consider when he takes over the leadership of the company.
- ENMAX shipped technology jobs offshore a few years ago to the TATA Group in India. Bring the jobs back home.
- At the same time, outsourcing customer care jobs to the Philippines and Guatemala by other utilities like ATCO and Direct Energy, in our opinion, is fundamentally wrong, especially when firms like ENMAX have a world-class sophisticated customer care team here in Calgary. Calgarians are more than capable of doing the job. Why not consider investing and turning Calgary into a call center hub to replace the services that HCL and Wipro are providing to ATCO and Direct Energy? Possibly consider using staff here in Calgary to manage the customer care call services required by Versant Power as well as other utilities in North America.
Time to Support Local Businesses
As we mentioned above, it is more important than ever for consumers to support local businesses.If you are looking to reduce your cost of energy and support a truly local company, consider switching over any one of the 20 local Energy Marketers operating under the UTILITYnet umbrella. Together, the small privately owned, local businesses in our network have customers in over 400 communities in Alberta and can compete head-to-head with large utilities like ENMAX, ATCO, and Direct Energy.
As an added bonus, to help our customers save even more each month, we recently added high-speed Internet services to our portfolio with the introduction of Q Wave, and are now offering Internet services in competition with Shaw and Telus.
Many of the Energy Marketers in our network are offering special bundling options. One such example is Spot Power, which is offering to reduce electricity and natural gas services administration fees to $0 when a customer bundles Internet with their existing services.
What makes us different? We have been in the Alberta energy market, supporting the Oil and Gas industry since 1978. UTILITYnet is privately owned, profitable, has zero debt, and all of our employees (technology, data processing, customer care, and billing) are proud Albertans. We have not shipped jobs offshore and the rates offered by our network are competitive.
In today’s tight employment market, most importantly, we are hiring. In the field of systems, if you are a seasoned programmer , with experience in relational databases, PL/SQL, and also interested in data analytics, drop us a line (1316, 9th Ave SE., Inglewood, Calgary AB T2G 0T3).
Cheers,
Stay Strong, Keep Safe, Be Kind.
Nick Clark Director,
Utility Network and Partners Inc.