Water main break discussion

[lemongrab]

I think the city's more integrated/less siloed re-organization makes a lot of sense overall, but this really exposes that Water should be its own entity (or rolled into Enmax).

It would be interesting to know the history of how Calgary ended up with Enmax having a more limited scope than EPCOR? I can see how water mgmt might be more integrated with broader city planning and operations than electricity and natural gas do, but water probably integrates even better with those other utilities. Has EPCOR had any lavish Xmas party scandals?

 

[darwink]

I think the city's more integrated/less siloed re-organization makes a lot of sense overall, but this really exposes that Water should be its own entity (or rolled into Enmax).

It would be interesting to know the history of how Calgary ended up with Enmax having a more limited scope than EPCOR? I can see how water mgmt might be more integrated with broader city planning and operations than electricity and natural gas do, but water probably integrates even better with those other utilities. Has EPCOR had any lavish Xmas party scandals?

Epcor started as a municipal power company that expanded into water service.

Calgary's electricity generation was private all the way (don't know when distribution changed), but water was public.

If I had to guess, Edmonton's need to carry a far larger debt load for electricity generation led to the transformation earlier and water was along for the ride, along with the nature of fewer annexations along the way leading to more 'customers'. If places were already comfortable with Edmonton supplying power, why wouldn't they be comfortable with water?

 

[trtcttc]

I think that's why some major infrastructure systems like transit and water - once they reach a certain scale - really need to be converted into a regulated utility type structure with a dedicated tax/fee support structure and mandate that can better resist the pressure of short-term and political thinking. They are too big, too complex and too important to be left to political whims and influence of the issue of the day.

They really need a long-range, sustained thinking that can resist short-term investment. The scale of the water system grew so complex it became really challenging for anyone to guide the overall objectives - so drift over time was inevitable. Some years maintenance won out, other years growth, other years repaying the depleted reserves etc. it's all really tactical responding to issues of the day, not really the multi-decade long sustained focus that is required to keep up with such a large and complex network.

For example, if the water utility had more authority with a clear mandate to ensure system reliability, redundancy and maintenance, and was given more control to set rates, fees and levies to execute, they probably would have pushed far harder back against Council planning decisions that create the graph below.


View attachment 707329

Agree with the general idea of spinning out the water org, I'm not sure if that would've prevented the 2024 issues. It wasn't like we had years where administration was asking to replace this pipe as an urgent ask and council chose to fund other things, which is what the UCP would like to portray as Nenshi not funding it when nobody was really calling for it.

I find these charts super misleading though. I don't doubt Vancouver and Toronto are lower, but they're also not amalgamated cities like we are. A real comparison to Toronto and Vancouver should at least include Peel and Durham Region in Toronto and Surrey, Richmond, Burnaby for Vancouver. They have urban "cities" that spend proportionally more on transit, police, housing, and suburban cities that spend more on roads, utilities, etc., while we have cities that combine and average out the amount spent across the entire region. And footnote number 2, they used the municipal population of Vancouver as a proxy for users?! If that's the case, Calgary should be using 1.6M as base.

 

[lemongrab]

Agree with the general idea of spinning out the water org, I'm not sure if that would've prevented the 2024 issues. It wasn't like we had years where administration was asking to replace this pipe as an urgent ask and council chose to fund other things, which is what the UCP would like to portray as Nenshi not funding it when nobody was really calling for it.

It would have had to happen a long time ago to have enough runway to prevent this, but a proper governance structure wouldn't let this stuff fly so far under the radar. The report seems to describe a pretty damning lack of info provided for governance/oversight, but city councils isn't really the best body to do it. Especially after 2021 when they consolidated 4 standing policy committees (including the SPC on Utilities and Corp Services) into just 2 broader committees. Couple that with the high turnover of recent councils and this governance structure didn't stand a chance moving forward (but obviously it failed much earlier).

The big question is are there any other really consequential blind spots? Or other areas that would be better at arms-length with more expert governance? Not sure I'd want transit to be a more independent agency, but maybe we should at least have something like Calgary Planning Commission for transit if not all of mobility? The Green Line certainly showed the flaws of relying on high turnover city council generalists...

 

[lemongrab]

An article more focused on council's response
https://livewirecalgary.com/2026/01...ncil-responds-to-bearspaw-feeder-main-review/


I've been pretty skeptical/critical of her, but I've really come around on Wyness

Ward 2 Coun. Jennifer Wyness said that Calgary is already in the midst of a water emergency. The message today shouldn’t be about the results of the report. She said it’s a distraction.

“I’m frustrated as a councillor that while the pipe is still broken and still being fixed, we are being distracted by our report when Calgarians and the messaging needs to be, please conserve water,” Wyness said.

Wyness said in the middle of a water emergency they received the report at 9 p.m. Tuesday, an expected to digest the contents to ask informed questions when the panel delivered the report during a 1:30 p.m. special meeting.

“This is poor governance, and this is not what Calgarians have demanded of council,” she told reporters.

I haven't watched today's meeting, but I think she makes a really good point. This report was supposed to go to Executive Committee on February 3, and then it presumably would be presented again at a regular council meeting. Which gives councillors two chances to ask questions, with time in between when the public may help inform further questions. That interval also let's admin (or in this case the panel) come back with further clarity based on questions at the committee presentation.

Has council now blown their load on this and discharged this panel? If so, it seems like an awfully big miss, especially when the recommendation is as big as it is. If this council is going to initiate the process towards a subsidiary they could have been a hell of a lot more informed by following the regular process instead of this rush job.

 

[lemongrab]

One more thought - I haven't read the whole report and while it seems more damning to city executive leadership than water senior leadership, I'm sure it's not totally rosy for them either. So while they're all working their asses off to keep the system running and get the current emergency fixed, they also get to go to bed tonight thinking about this report and knowing their long-term employment is on even shakier ground. So that's nice.

 

[DougB]

Isn't this the result of low flow? Or is it not that simple?

Calgary used to have flat instead of metered rates, so zero incentive to conserve water

 

[DougB]

Epcor started as a municipal power company that expanded into water service.

Calgary's electricity generation was private all the way (don't know when distribution changed), but water was public.

If I had to guess, Edmonton's need to carry a far larger debt load for electricity generation led to the transformation earlier and water was along for the ride, along with the nature of fewer annexations along the way leading to more 'customers'. If places were already comfortable with Edmonton supplying power, why wouldn't they be comfortable with water?

Electricity distribution is public in Calgary as Enmax holds the monopoly. Enmax was created around 2000 under Mayor Al Duerr who at the time thought it could sold for $1B. Nenshi made a step towards becoming a public figure at the time by writing columns opposing any sale. As always, Nenshi was wrong. The City should have taken the cash and run.

Prior to dereg, all power in AB was produced by TransAlta, ATCO, the City of Edmonton and the City of Medicine Hat. Enmax didn't get into the generation game until the 2000s. Edmonton organized its electricity assets under EPCOR and IPO'd the generation piece as Capital Power in 2009.

Enmax has expanded beyond its mandate by acquiring assets the do not serve the City (ex. transmission and distribution in Maine) and should be sold. Retaining distribution assets as City owned might make sense.

 

[DougB]

Good thing the lady dipshit premier is blaming Nenshi almost single handedly for this...

Well he does bear more responsibility than any other Mayor as be reigned for about half of the post 2004 period. The McKnight water main break would have brought the need to replace Bearspaw to the forefront. I'm sure the UCP has oppo researchers searching for Nenshi's voting records and Council minutes for any budget deliberations or other conversations about replacing Bearspaw

 

[Nimbus]

powderjunkie spotted...

 

[YYCInfraObserver]

Electricity distribution is public in Calgary as Enmax holds the monopoly. Enmax was created around 2000 under Mayor Al Duerr who at the time thought it could sold for $1B. Nenshi made a step towards becoming a public figure at the time by writing columns opposing any sale. As always, Nenshi was wrong. The City should have taken the cash and run.

Prior to dereg, all power in AB was produced by TransAlta, ATCO, the City of Edmonton and the City of Medicine Hat. Enmax didn't get into the generation game until the 2000s. Edmonton organized its electricity assets under EPCOR and IPO'd the generation piece as Capital Power in 2009.

Enmax has expanded beyond its mandate by acquiring assets the do not serve the City (ex. transmission and distribution in Maine) and should be sold. Retaining distribution assets as City owned might make sense.

Why should the city have taken the cash and run? From all intents and purposes, Enmax has been successful for the City - $1.5 bn in dividends since '98, and still under City control. Don't want this to become a Chicago parking metre situation...

 

[ByeByeBaby]

An article more focused on council's response
https://livewirecalgary.com/2026/01...ncil-responds-to-bearspaw-feeder-main-review/

I haven't watched today's meeting, but I think she makes a really good point. This report was supposed to go to Executive Committee on February 3, and then it presumably would be presented again at a regular council meeting. Which gives councillors two chances to ask questions, with time in between when the public may help inform further questions. That interval also let's admin (or in this case the panel) come back with further clarity based on questions at the committee presentation.

Has council now blown their load on this and discharged this panel? If so, it seems like an awfully big miss, especially when the recommendation is as big as it is. If this council is going to initiate the process towards a subsidiary they could have been a hell of a lot more informed by following the regular process instead of this rush job.

I think that this is a good point; the report raises plenty of good questions and issues, not one of which needs to be addressed today rather than in a month. (The most urgent recommendations -- especially building the parallel pipe, which is in progress -- were made in a previous report from this panel in mid-October.) The panel did say they were open to coming back at a future date, IIRC, so it's not a one-time opportunity.

On the fourth straight day of above-sustainable water usage, the focus of council, administration and the media need to be on that, rather than a long-term administrative shuffle. This smacks of Farkas wanting to be seen to do something and then doing whatever something is available rather than what is actually needed.

 

[darwink]

Why should the city have taken the cash and run? From all intents and purposes, Enmax has been successful for the City - $1.5 bn in dividends since '98, and still under City control. Don't want this to become a Chicago parking metre situation...

The question is whether selling it and putting money in a reserve would have produced better returns. Heck, Calgary could 'sell' it to Epcor/Capital power for shares in those firms, and the combined firm could benefit even more from economies of scale.

The Chicago parking meter situation, much like Highway 407, was a good deal, it just wasn't designed to do what people think it should in hindsight.

Owning assets which generate revenue (or could) does come with opportunity cost. In general, people don't see it. They dream of a city with enough profit generating assets that taxes can be zero. They don't see to get to that point that there are massive tradeoffs.

Much like accumulating reserves for no real purpose, having assets just to generate revenue is a bad thing.

Now, as natural monopolies, you can argue there is a public interest, but for electricity that public interest is already defended by the Alberta Utility Commission.

You could argue that as critical services that the assets have an even higher level of public interest to defend.

But we do accept private distribution for natural gas and telecommunications. What makes electricity and water different?

While I wouldn't support an outright sale of water and distribution assets, there is a middle ground that the socialist French cooked up, leasing the asset to private operators for fixed terms with performance standards, goals, and fee structures baked into the contract.

 

[CalgaryTiger]

I think that this is a good point; the report raises plenty of good questions and issues, not one of which needs to be addressed today rather than in a month. (The most urgent recommendations -- especially building the parallel pipe, which is in progress -- were made in a previous report from this panel in mid-October.) The panel did say they were open to coming back at a future date, IIRC, so it's not a one-time opportunity.

On the fourth straight day of above-sustainable water usage, the focus of council, administration and the media need to be on that, rather than a long-term administrative shuffle. This smacks of Farkas wanting to be seen to do something and then doing whatever something is available rather than what is actually needed.

I don't know what else council can do to be dealing with the current pipe issue. I am happy they prioritized this and let the people who can do the work to get the pipe back up and running, get the pipe back up running. If people are not already using as little water as possible, they're not going to start because we didn't have this special council meeting and the mayor and councillors held another press conference. We're better off for them having the meeting. As has been stated, this isn't the end, this is just the beginning of council's engagement with this panel.

 

[trtcttc]

The question is whether selling it and putting money in a reserve would have produced better returns. Heck, Calgary could 'sell' it to Epcor/Capital power for shares in those firms, and the combined firm could benefit even more from economies of scale.

The Chicago parking meter situation, much like Highway 407, was a good deal, it just wasn't designed to do what people think it should in hindsight.

Owning assets which generate revenue (or could) does come with opportunity cost. In general, people don't see it. They dream of a city with enough profit generating assets that taxes can be zero. They don't see to get to that point that there are massive tradeoffs.

Much like accumulating reserves for no real purpose, having assets just to generate revenue is a bad thing.

Now, as natural monopolies, you can argue there is a public interest, but for electricity that public interest is already defended by the Alberta Utility Commission.

You could argue that as critical services that the assets have an even higher level of public interest to defend.

But we do accept private distribution for natural gas and telecommunications. What makes electricity and water different?

While I wouldn't support an outright sale of water and distribution assets, there is a middle ground that the socialist French cooked up, leasing the asset to private operators for fixed terms with performance standards, goals, and fee structures baked into the contract.

The problem is selling these assets rarely end up with the money in reserve to generate better returns. If Calgary ran a sovereign wealth fund then you could make an argument that selling it and buying better assets, rather than just local assets make sense. However, it's most likely used to plug a deficit, or some other short term investment that generate less returns than just holding onto the asset. The 407 was sold for $3B in 1999 with the proceeds used to fund education and healthcare, but the asset is now generating $1.7B in revenue PER YEAR and worth over $30B, I doubt those healthcare and education investments are generating that level of returns.

Public ownership of assets do come with risk, like being the shareholder of any company. But relatively speaking, utilities are one of the lowest risk sectors, especially when it enjoys a natural monopoly and complete cost recovery through the AUC. Utilities also pay out significant dividends and most of the value is based on future cash flow. If the government owned a big stake in Shopify, where most of the value is locked up in the stock price, which can only be realized when they sell, then it's a different situation. Furthermore, I don't think there's compelling evidence that regulated monopolies like utilities perform better under private ownership than public, contrary to some other sectors, like railways and airlines.