EPCOR Utilities Inc.

EPCOR Utilities Inc.

June 09, 2016 17:00 ET

City Council to Consider Review of EPCOR Drainage Proposal

EDMONTON, ALBERTA--(Marketwired - June 9, 2016) - Edmonton City Council will consider on June 14th whether to proceed with a review to determine the feasibility of transferring the City's Drainage Utility Services (Drainage) to EPCOR. If Council proceeds with a review, a final decision will be made later this year.

EPCOR currently operates three of the four main components of Edmonton's water system - water treatment, water distribution and wastewater treatment. The City of Edmonton's (City) Drainage department operates the fourth component of the water system, the wastewater and stormwater collection system.

Subject to Council approving a review on June 14th, an independent consultant will be retained by city administration to help evaluate EPCOR's transfer proposal.

"We believe this is the right time for the City to consider this possibility," said EPCOR President & CEO Stuart Lee. "A transfer of Drainage at this time aligns with the City's current review of all its services. It would also bring all of Edmonton's water utility operations under one roof, allowing for a common approach."

Mr. Lee added, "EPCOR has a strong track record and is one of the best operated water utilities in North America - and, it is 100% owned by the City of Edmonton."

Under EPCOR's proposal:

  • The City will still own Drainage through its 100% ownership of EPCOR.
  • Customers will be protected.
    • City Council will still regulate and approve Drainage utility rates as they currently do for EPCOR Water.
    • EPCOR will hold Drainage rates at 3% for five years, the annual rate increase in Drainage's current budget.
  • Employees will be protected.
    • All Drainage employees will have the opportunity to transfer to EPCOR with comparable salary, benefits and seniority.
  • Responsibility for the planning and development of new neighbourhoods will remain with the City.
  • Drainage debt and future capital costs will transfer to EPCOR, giving the City greater budget flexibility for other public infrastructure priorities and services.
  • Transferring Drainage will strengthen EPCOR and enhance its capabilities to further grow its business in new markets, as it has done since the City transferred the Gold Bar Wastewater Treatment Plant to EPCOR in 2009.
  • EPCOR projects that its annual dividend to the City can be increased by about $20 million immediately following a transfer.

EPCOR traces its roots back 125 years to the banks of the North Saskatchewan River, when its predecessors were the first to bring electric lights and treated water to the citizens of Edmonton. Since EPCOR was incorporated in 1996 with an independent Board of Directors, it has returned more than $2 billion in dividends and other payments to the City. Today, EPCOR has earned recognition in Alberta, Canada and the U.S. as an employer of choice and a responsible corporate citizen.

Forward Looking Information

Certain statements and other information included in this media release constitute "forward-looking information", "financial outlook" or "forward-looking statements" (collectively, "FLS"), including, but not limited to, statements regarding management's expectations with respect to the payment of an increased dividend. The purpose of this information is only to provide readers with an indication of the expected impact of the proposed transaction on EPCOR's future financial results and this information may not be appropriate for other purposes. These statements speak only as of the date of this media release and EPCOR does not undertake any obligation to publicly update or revise any FLS. Any FLS contained herein are expressly qualified by this cautionary statement.

About EPCOR Utilities Inc.

EPCOR's wholly owned subsidiaries build, own and operate electrical transmission and distribution networks, water and wastewater treatment facilities and infrastructure in Canada and the United States. The company's subsidiaries also provide electricity and water services and products to residential and commercial customers. EPCOR, headquartered in Edmonton, is an Alberta Top 70 employer. www.epcor.com.

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