Edmonton to net $20 million from EPCOR drainage profits
The city is getting nearly $7 million more this year in dividends because of the deal
The City of Edmonton is seeing the benefits of handing drainage operations over to EPCOR in September, despite years of debate about whether to transfer the utility.
The city is getting nearly $7 million more this year in dividends because of the deal.
EPCOR has so far increased the dividend from $146 million to $152 million in 2017, third quarter financial results posted Tuesday show.
By 2018, the city should get $20 million more from the utility, said Stuart Lee, EPCOR president & CEO.
"It's positive news to the city and it's consistent with what we committed to the city previously," Lee said.
Lee said EPCOR also made more money because of the deal.
"As our income has gone up with the transfer of drainage, so proportionately has the dividend gone up," he said.
When the city was in charge of drainage, the income brought in was reinvested into maintaining the system.
EPCOR has been in charge of water and wastewater operations in the city for years.
By being responsible for all three, he said the company is finding efficiencies.
"You end up reuniting the whole water cycle," he said.
"We treat water, we distribute it … we now collect the wastewater and then treat it at our Gold Bar facility there are efficiencies that come with that."
Deal nearly didn't happen
At $169 million, however, the company's net income was lower in the first nine months of 2017 compared to $221 million in the same period the previous year.
The third-quarter financial report attributes the dip to the "lower recognition of a fair value gain on sale of the remaining investment in Capital Power in January 2017."
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However, Lee said the third-quarter results weren't surprising.
Handing EPCOR the drainage duties didn't come fast or easily. The company had suggested the idea to the city before, but was turned down.
In April 2017, council was still divided on this issue, voting 7-6 to allow the asset transfer.
Several city councillors did not respond Tuesday when CBC requested comment on EPCOR's third-quarter results and the dividends earmarked for the city.
As part of the asset transfer, EPCOR retained the 700 city employees already working in the drainage department.