Calgary corporation could take over regional water delivery
Okotoks: Councillors express concern over plan
Wednesday, May 09, 2012 11:33 am
A proposed water pipeline from Calgary could be operated by a city corporation – a scenario that’s raising concerns among some town councillors.
The city is creating a utility company that will provide water services outside Calgary’s borders. It will be separate from the utility that provides water to residents within the city and would maintain and operate the pipelines and delivery system for regions like Airdrie, that already receive water from Calgary.
City of Calgary council voted for a system that would be for-profit, similarly to their electricity provider, Enmax.
“That was the business model our council picked… it’s a company that would stand on its own and it would provide a very modest return for the risk that it takes,” said Paul Fesko, Calgary manager of strategic services for water resources.
He gave a presentation to Okotoks town council on April 23 on how the city of Calgary will provide water to outlying communities and what they could expect with a pipeline.
The City has applied to the provincial government to create the utility and city councillors set aside $2 million for the water utility.
Calgary provides water to Airdrie, Chestermere and Strathmore via a pipeline and the utility would take over this function.
Fesko explained the company would purchase water from Calgary and communities would pay a bulk rate for water services. The water would be stored in reservoirs in outlying communities and it would then be up to the municipality to distribute it to homes.
Fesko said the Town shouldn’t be concerned about receiving water from a city-owned, for-profit utility. He said a pipeline wouldn’t be much different than Okotoks’ current practice of contracting the operations of its water services to Epcor, which is owned by the City of Edmonton.
“The operator right now, Epcor, is making a profit off Okotoks and returning it to Edmonton,” he said.
A water pipeline from the city or directly off the Bow River would be required if Okotoks’ grows to a population of 60,000 or more, said Marley Oness, Okotoks municipal engineer, but is not needed if the town caps growth.
With a pipeline from the city Okotoks would be required to increase the density of development in Okotoks under the Calgary Metropolitan Plan.
“There is an expectation that if the city is going to be supplying water that that municipality it’s supplying water to would be developing in a sustainable manner,” said Oness.
It’s not known what a pipeline will cost the Town, both in the cost to build it and what residents would pay for Calgary water.
A recent report on different options to provide water for future growth in Okotoks estimated a pipeline from the city could cost as much as $60 million to build.
Oness said the provincial government has played a role in providing grants for regional water pipelines in other areas. The Province paid 87 per cent of the $53 million cost to build a pipeline between Calgary, Chestermere and Strathmore.
The cost of drinking water in Okotoks is comparable to communities that receive drinking water from Calgary.
Okotoks water rates for low and mid-level water users are comparable to those in Airdrie and slightly less than Strathmore and Calgary. Costs for high-level water users are higher in Okotoks, largely to discourage people from using large amounts of water.
Some town councillors are concerned about a City of Calgary entity making money on water.
“They are profiting off a water license they were given free,” said Coun. Florence Christophers.
She said there are benefits to regional water services, such as possible financial savings. However, given the potential cost of a pipeline, Christophers said might also make sense for the Town to build a pipeline to the Bow River to retain autonomy over its water source. She said a pipeline would also mean the Town would have to mothball its recently expanded water treatment plant.
Ultimately, she said she is flexible while considering the options the Town is facing.
“I’m not entrenched,” she said. “I’m open minded about the direction we take our community, acknowledging there’s pros and cons about every course of action.”
Coun. Laurie Hodson said the city’s possession of the vast majority of water licenses in the region put it in the drivers seat on water issues and he doesn’t want Okotoks to be taken for a ride.
“They have the excess capacity and he who has the excess capacity has the control,” he said.
Hodson’s preference is for a regional water utility run by regional municipalities.
He has long asked for scientific evidence showing whether there is enough water in the Bow River to serve a pipeline to parched communities in southern Alberta.
“I don’t think it’s unreasonable to ask,” he said.
He is also concerned about the City of Calgary having a “water hammer” to control development decisions in the region.