Helping Municipalities Do More With Less



By: Nick Clark

“It has to be said: there is a fiscal reckoning coming. We will all be forced to make changes as we deal with this very challenging reality.”

The above words were spoken by Municipal Affairs Minister Tracy Allard to Alberta cities and members of Alberta Urban Municipalities Association (AUMA) last week. The AUMA membership includes cities, towns, villages, summer villages, and specialized municipalities - where over 85% of Albertans live. The “challenging reality” she refers to is of course the economic fallout from the COVID-19 pandemic and falling oil prices.

As municipal leaders in Alberta see their capital transfers and grants slashed, the message from the Premier and Municipal Affairs Minister was clear that local governments need to confront the challenges ahead. They need to think beyond the provincial stimulus plan, tighten their belts, and think outside the box to find new income generating opportunities.

While this message doesn’t seem surprising considering the challenging economic climate Alberta is facing, municipalities aren’t the only ones who need to focus on making changes. The provincial government can also help bring jobs back to Alberta and make changes to the energy market that could help consumers and municipalities alike.

Dear Cabinet Ministers:

  1. It is time to break up the franchised monopoly that the large incumbent utilities have enjoyed.
  2. Other municipalities should be encouraged to do exactly what Calgary and Edmonton have done: create their own retail energy division and capture the profits in their own communities. Associate Minister of Red Tape Reduction, Grant Hunter, may want to add this to his agenda.
  3. Consumers are angry over the seeming gouging by government regulated utilities and want the government to focus on trying to reduce some of the extra surcharges on consumer’s utility bills.
  4. The province should encourage Alberta’s regulated utilities to stop outsourcing jobs. If they are going to profit off of Albertans, they should be required to bring the jobs back.

Tap into the “Big Five’s” Revenue Stream

It’s no secret that Alberta’s economy is driven by the energy sector, which includes our reliance on the electricity market and the grid. For many years the utility giants of Alberta (ENMAX, EPCOR, Direct Energy, ATCO, and Just Energy) have been making massive profits off of the energy used by Albertans to power their homes and businesses.

What if smaller Alberta municipalities could capture some of those profits that are flowing out of their local community each month?

Of course, they can! Just think outside the box.

A proven formula for success: For over a decade, Utility Network & Partners (UTILITYnet), based out of Calgary, has been offering a low-cost business model that provides municipalities and cooperatives alike the opportunity to enter Alberta’s deregulated energy market and create a new revenue stream to fund community programs and infrastructure.

Created in 2008, the Energy Marketer Program leverages all of the technology horsepower UTILITYnet has amassed during its 40 years in business and provides a turn-key solution which allows municipalities to easily tap into the profits made by selling electricity and natural gas across the province.

The municipalities of Black Diamond, Lacombe, and Olds were the first of over 20 other independent retailers that have tapped into this innovative idea, and the benefits they have realized are significant. In early October, the village of Stirling will launch Ridge Utilities with plans to reinvest its profits into the local community.

“Ridge Utilities is owned by communities in the region and was founded with a goal to save residents money and make life simpler,” said Trevor Lewington, Mayor of Stirling. “We will reinvest all of our profits right where our customers live rather than send the money to a faceless corporate headquarters in another region or country.”

A Proven Revenue Generating Business Model

The town of Olds was the first municipality in Alberta to take advantage of this unique revenue opportunity, launching an energy retail business named Mountain View Power (MVP). 100% of the profits generated are used to support and grow the community.

“Our business model leverages community spending for community good,” said Mitch Thomson, Executive Director of Olds Institute/Mountain View Power. “Our profits from the sale of energy have created opportunities for community sustainability, and economic and community development.”

Since its inception in 2010, MVP has generated over $1 million for the Olds community. The funds have been invested in programs such as:

  • Physician attraction
  • The Boys and Girls Club
  • Olds Crime Prevention Committee
  • Olds Splash Park
  • Community sustainability plan
  • O-NET (which offers free WiFi across the community)

“Every citizen in our community has been touched by a program or service that has been funded by Mountain View Power, whether that be the WiFi, a doctor, or a school program,” said Thomson.

Another example, Echo Energy, owned by the City of Lacombe, directs and deposits the net proceeds from energy sales from their local e-commerce retail store directly into the Echo Lacombe Community Fund. This fund was established to provide support for projects dedicated to improving the quality of life within the community and to help build a better Lacombe.

With over 20 Energy Marketers currently operating across Alberta, and customers in over 400 communities in Alberta, UTILITYnet’s network continues to grow as more become aware of the benefits of the program.

Stop Gouging - A Win-Win Solution

Opening a locally-owned and operated Energy Marketer business, similar to the online retail operations of Spot Power, not only benefits the local community as a whole, it also benefits residents directly. The energy prices offered by Energy Marketers in UTILITYnet’s network are often lower than those offered by other retailers in the province.

For example, during September, as the government was bringing the hammer down on municipalities at its annual convention, the government’s own regulated utilities were charging over 40 to 50% more for electricity on the Regulated Rate Option (RRO) than Spot Power, an Energy Marketer in the UTILITYnet group of companies.

 

Spot Power (Variable)

ENMAX (RRO)

EPCOR (RRO)

DIRECT (RRO)

September 2020

4.99 ¢/kWh

7.167 ¢/kWh

7.684 ¢/kWh

7.312 ¢/kWh

The UTILITYnet Energy Marketer program provides a better way for communities to do more with less. Local residents can support their community and keep the profits in their own municipal bank account simply by buying electricity and natural gas from their own retailing operation, just like Olds, Black Diamond, Lacombe, and Stirling.

Generate a new income stream and save your residents money, it’s a no-brainer.

“We are at a turning point that could lead to more equity in communities sharing in the massive profits that the utilities are making,” said Nick Clark, Director of UTILITYnet. “A few billion dollars have been shipped out of the province by the big five utilities. Hundreds of jobs have been outsourced out of the country in an effort to reduce costs and increase profits. We can be more resilient if the municipalities had their fair share in the utility market.”

“Things would be different if a municipality could set the energy rate for their community. They could offer businesses, who are suffering economically, a discounted energy rate, just like Foothills Energy is doing in Black Diamond. The reality is that we need to constantly adapt to the changing conditions, and today we are in a state of change.”

A Challenge to Municipalities

It would be easy to see the government’s message as disheartening, but it can also be seen as a challenge.

Now is the time for municipal leaders to think smart and be proactive. Face these challenging times head-on and take control over retailing of electricity and natural gas to their residents. Use the profits for local community programs or create a retailing pricing strategy that would be attractive to the local business community.

Join a thriving network of Energy Marketers and start doing more with less. Now is the time for other municipalities to take action. Stop letting potential revenue from your resident’s hard-earned dollars end up in the pockets of the big utilities. Keep the money in your community.

Today, our network has retail customers in over 400 communities across the province. Education, training, sharing of ideas, and the synergy gained through a collective group of like-minded businesses working together can produce amazing results. We have proven that we can compete against the big five!

Joining our network is easy. We have created a plug and play solution that has made what was complicated be seamless and simple. Just plug into our cloud and our customer care team will look after all the logistics of signing up customers and billing services. We have opened the door to the competitive retail business. We have unraveled the ball of string, automated every integrated business transaction, and provide unrivaled local customer support. Best of all, we are selling electricity for less!

Join us as we work together to challenge the giants that dominate the market.

To learn more about joining the Energy Marketer program contact Christie Murnaghan (christie.murnaghan@utilitynet.net) or click here.

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