Council motion would kill any attempt to sell Saint John Energy

City councillors could take the potential sale of Saint John Energy off the table at their meeting Monday night.

The sale of the power utility was raised as one of three options that should be considered to help the cash-strapped city move ahead.

Saint John is facing estimated $10 million deficits in 2021 and 2022 because of persistent low growth rates, while the property tax rate at $1.78.50 is the highest of any city in the province.

At a meeting of council on April 20, city manager John Collin said an unsolicited offer had been received for the purchase of the company.

The offer proposed a three year rate freeze for customers after which electricity rates would rise to match those charged by NB Power.

Saint John Energy residential consumers have long enjoyed rates 10 per cent lower than NB Power's.

Considerable dividend

Collin would not reveal the amount offered or the estimated value of the utility, but said if money raised from the sale were locked into an endowment there would be a considerable annual dividend.

"We believe that we could achieve a two to five million dollar annual contribution to the city," said Collin, who suggested the money could be dedicated to a property tax reduction.

That dividend would be two million dollars higher except the city will have to pay more for its own electricity consumption.          

Another option would be to allow Saint John Energy electricity rates to increase and direct the added revenue to the city.

The utility has a deal with a private sector firm to build the Burchill wind farm near Spruce Lake, something that could generate millions of dollars more in annual revenue should the city hold on to the company.

But the proposed sale has struck a nerve with many people.

In a blog post last week Saint John Energy president Ray Robinson said, "We are heartened by the reaction of countless Saint John citizens who have spoken up to oppose a sale - it means they believe in us."

"I'm a supporter of council, as the owner, thoroughly exploring all the options that are available to it," said Robinson, when reached by CBC Friday.

Robinson said he is 'biased' in favour of the option that would see the utility proceed with its growth plans - including the wind farm - while returning profit dividends to its owner, the city.

Coun. Greg Norton wants to bring an immediate stop to any talk of a sale.

"Be it resolved that Saint John Energy is not for sale and consideration of its sale shall be immediately removed from consideration," says a Norton motion on city council's Monday night agenda.

 "You can see already that Saint John Energy adds tremendous value to our community," said Norton. "You would hear Saint Johners say it's one of the things that actually works really well for our community."

Hard sell for councillors

Most councillors reached by CBC were opposed to selling the utility.

"It's working great, it's well respected, it gives good service, it doesn't have debt, it's a quality asset," said Donna Reardon.

"Never sell your asset, and that is the best asset we have," said Blake Armstrong.

Councillors John MacKenzie and Gary Sullivan also said they are opposed to a sale.

Coun. David Merrithew said he would need to hear details about any purchase offer before making a decision.

There are no immediate plans to sell the utility. In his April 20 presentation Collin proposes creation of a task force to study the various options.

It would include city representatives, NB Power and Saint John Energy.