Electric Utility Modernization

Overview

The City is currently exploring the option of transitioning our electric utility, which includes the distribution of electricity to customers in Red Deer, to a City-owned Municipally Controlled Corporation. A business plan and financial analysis is being developed now in preparation for a public hearing in advance of a decision.  

What you need to know: 

  • A decision has not been made yet. In June 2024, Council provided direction to explore the possibility of transitioning the electric utility to a City-owned Municipally Controlled Corporation (MCC).
  • We are not considering selling the electric utility at this time. While our initial scoping study identified three options – divest, MCC and Department+ (enhanced municipal service delivery), Council has provided direction to explore the possibility of transitioning to an MCC. 
  • We are currently working with a consultant, EY, to develop a business plan, financial analysis and regulatory review to present a full picture of what it could mean for The City to transition to an MCC. 
  • A public hearing will be held on June 23, 2025 to provide an opportunity for citizens and other interested parties to provide their feedback on the MCC prior to Council making a decision. The business plan will be made available to the public at least 30 days prior to the public hearing.  

What is a Municipally Controlled Corporation? 

An MCC is a corporation that is owned by a municipality to provide specific services or functions that benefit the municipality and its residents, while operating at arm’s length from municipal administration. 

Many municipalities in Alberta and across Canada have successfully transitioned to MCCs to provide more efficient, financially stable utility services. Research and benchmarking from those municipalities will help inform Red Deer’s approach. 

Why are you considering this change? 

The City has been providing utilities for over a century, but our governance and business models have remained largely unchanged. As industries evolve and regulatory requirements shift, our current model is reaching practical limitations. This review is meant to explore options that will allow us to continue providing reliable, cost-effective services while ensuring long-term sustainability. 

Some of the key drivers of the change include: 

  • Strategic investment in aging infrastructure: A long-term strategic investment is essential for modernizing aging infrastructure and ensuring reliability. However, our current governance model restricts proactive planning for growing electricity demands and electrification.
  • Enhancing governance for growth and compliance: A future-focused governance model is needed to improve decision-making, regulatory compliance, and business agility. The current structure limits alignment with industry best practices and access to shared resources, restricting growth, innovation, and operational efficiency.
  • Strengthening business competitiveness: To stay competitive in the evolving energy sector, we need a governance model that fosters business development and strategic partnerships. Current limitations hinder our ability to capitalize on emerging market opportunities. 
  • Attracting and retaining top talent: A modern governance model is key to attracting and retaining top talent. Evolving compensation structures and workforce strategies will ensure competitiveness with industry trends and expectations. 
  • Positioning the utility for future growth: A forward-thinking governance model is key to unlocking opportunities in smart grids, renewable energy, and new technologies. Strategic collaboration and investment will drive leadership in broadband and connectivity, boosting economic development and community well-being.  

For more information, see our Electric Utility FAQ (pdf)

If you have questions about the Utilities Governance project, please email utilitiesgovernanceinfo@reddeer.ca.