Councillors raise questions about Blatchford utility spending proposal

The city is being asked to invest another $52.8 million in the Blatchford's district energy system. A report outlining the expense was presented Thursday at a meeting of Edmonton city council's utilities committee.

'We need a really good look at how we're going to recoup our costs'

A rendering of the development planned for the old city centre airport lands now known as Blatchford. (City of Edmonton)

The city is being asked to invest $52.8 million in the renewable energy utility for the Blatchford development, but some councillors are questioning the plan.

A report outlining the expense was presented Thursday at a meeting of city council's utilities committee.

The city-owned energy utility was set up to help the city achieve its long-term goal of 100-per-cent renewable energy and carbon neutrality for the Blatchford development.

In late 2016, city council approved $19.4-million in spending for the project's first phase.

The $52.8 million investment is detailed in the city's proposed 2019-22 capital budget. That spending would be on top of $115 million earmarked in the same budget for developing the Blatchford lands.

"We're so deep into this right now,"  Coun. Sarah Hamilton said Thursday. "We're talking about huge investments in infrastructure to make it work. I think we need a really good look at how we're going to recoup our costs on Blatchford.

"We keep putting money into it and we don't really have a good plan about how we're going to start to get that money out."

The report indicates the city may only start to see some returns on investments in the district energy system in 2027-28, she noted.

The city's aim for the Blatchford development is to build a sustainable community, including housing for 30,000 people, on 536 acres of land that was once home to the municipal airport, northwest of downtown.

The city broke ground on the development in August 2015, with officials saying at that time the first residents could be living there by 2016. The latest estimate is for the first residents to move into the community in mid-2019.

Councillors have known all along that would mean there would be some "non-refundable financial infusion" requested, Coun. Michael Walters said.

But the "hefty" request raises questions, he said. "I'm feeling some anxiety for sure that every number we get, and I've gotten on Blatchford since I've been here, has been off."

The plans for Blatchford were created at a time when the economic situation in Alberta was different, and the city could count on money from the province for infrastructure through the MSI, Hamilton said.

Times have changed with Edmonton facing a tough budget, she said.

"I think for maybe our own perspective for the long term, we have to talk about future-proofing our own ambitions on this, to make sure that we aren't planning for good times and hoping the bad times never happen," Hamilton said.

"We need to continually be very detail-obsessed about the numbers on Blatchford," Walters said Thursday. "But we also cannot lose our nerve."

The project had clear risks and many unknowns, he said, but "the need for environmental leadership is more important now than ever."

Discussion on the topic will come up again at the committee's next meeting on Nov. 16.

With files from Natasha Riebe