Wednesday, 11 January 2017 15:39

Clearer understanding of energy industry needed on city council

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The City of Medicine Hat’s energy division is the largest business in the city. Like any corporation it has a CEO, a board of directors (council), a board chair (the mayor), and shareholders (the citizens). It is in the business of selling electricity, natural gas and oil.
The board of directors has a clear stated policy of profit maximization, it is not a charity.
Of course there are differences but, by and large, the actions and outcomes are the same. In private enterprise part of the profits is used to pay dividends to the stockholders while in this public one, part of the profits is used to provide services to the citizens. Corporations are punished for their lack of success by lowered stock values, share selloffs, and eventually bankruptcy. The city has a built in method of ensuring success if the division is not profitable, it can just raise taxes to cover the shortfall.
Shareholder meetings and yearly corporate financial statements keep investors in the loop. Citizens, however, have little influence on decision making (electing council every four years is not particularly effective), and much of what happens is done in secret in closed council meetings; people, apparently, do not have a right to know.
The city’s energy division is a complex, multi-million-dollar enterprise. One should have a clear fundamental understanding of how business works if one wants to be a director.
Immanuel Moritz, Medicine Hat

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