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Few concerns ahead of the Enmax shareholder meeting about Maine referendum

City of Calgary council is taking an arms-length approach to the revelations that solely City-owned utility Enmax has been engaged in political activity during a foreign referendum.

Enmax, along with Versant Power, which was purchased by Enmax and now operates as a stand-alone subsidiary, formed a political action committee (PAC) in 2021 to oppose the dismantling of two of Maine’s largest private power utility corporations.

Regulatory filings for that PAC, Maine Energy Progress, show that in the past year, Enmax has put $7.5 million into the referendum fight, with $5 million of that total in the last quarter.

Mayor Jyoti Gondek took a hands-off approach when asked about that funding, saying that Enmax was taking an approach that best serves its shareholder, the City of Calgary.

“I think one of the things to remember is that Enmax made an investment in Versant Power. They made that investment in the interest of growing the company and providing a better return to its shareholder, which is us. So trying to protect that investment is what they’re pursuing right now,” the mayor said.

She said that there would be questions put towards the corporation at the July 26 shareholder meeting, one of them including what the limit could be on how much funding would be provided to the PAC.

“We have a meeting tomorrow with Enmax as a shareholder, so I imagine that question definitely will be brought forward. We will know more at that time,” Mayor Gondek said.

“I know that every time we have the opportunity to meet as a shareholder, there are a lot of great questions from Council and I can’t imagine that tomorrow would be any different.”

Not a standard voter issue

Ward 9 Councillor Gian-Carlo Carra said that he respects the expertise of Enmax to make decisions and that the limit to what Enmax might spend on the referendum would be whether the return on that spending made sense for the business.

Coun. Carra said that given the prospect of Enmax’s investment being nationalized, he didn’t see an issue with the company protecting its investment.

“Enmax has to spend some money. It’s a proposition. It’s a battle of the voters, hearts and minds and you’ve got to spend some money to tell a story because the voters are going to make a decision,” Carra said.

“If you didn’t, and we just lost it, and then we ended up losing money on the deal that would be horrible. So they’re going to spend some money to protect the investment that they’ve made.”

The PAC money, he said, was just a cost of doing business.

“This is not outrageous,” Carra said.

Mayor Gondek called the situation in Maine an unusual one, given that the referendum vote has a major impact on a foreign entity that owns a local one.

“I think it’s important to consider that this is not the standard election process,” the Mayor said.

“I think that’s something that we absolutely need to clarify. Perhaps the communication needs to be better on this. We’ll have a conversation about that tomorrow.”

Should the publicly owned power utility referendum pass in November of this year in Maine, Versant Power and Avangrid-owned subsidiary Central Main Power (CMP) would be replaced with a publicly-owned utility called Pine Tree Power.

Avangrid, in addition to Enmax, is funding their own PAC called the Maine Affordable Energy Coalition against the referendum. That PAC has raised more than $18.8 million in funding, with the vast majority of that funding—$18.3 million—from Avangrid’s holding company.

Council acts as the shareholder on Enmax, members not on the board of directors

Ward 11 Councillor Kourtney Penner said that, for her, one of the important things to note was that council acts in the capacity as shareholder for the corporation, but members of council do not sit on the board of directors.

“As a shareholder, we give a mandate for the company to perform on various sets of metrics. But we cannot make operational decisions on their behalf,” Penner said.

She said that the senior leadership team from ENMAX has kept council informed as to the referendum situation in Maine.

“It’s tricky, and it’s challenging and when we are cross-jurisdiction weighing in on other people’s matters,” Penner said.

“What I would say though, is we’ve given the mandate for Enmax to protect the best interests right of the organization, on behalf of the shareholders of Calgary, and if we felt like they weren’t doing that I’m sure we would be wanting to call a meeting of the shareholder.”

She said that she hasn’t heard any concerns from her fellow council colleagues on the issue of funding a PAC in a foreign election.

“I think that really speaks to the relationship that we have created with Enmax as this council, about that openness and communication and an understanding of their position on the matter, and a confidence that we have in them as an organization and their board of directors to make decisions on behalf and in the best interest of Calgary and Calgarians,” Penner said.