Kincardine plans to take over servicing of energy centre

Section: 
News

By Eric Howald

In an effort to inject some life into the Bruce Energy Centre (BEC), Kincardine council has decided it will take over water and sewage systems from Bruce Power.

 

The utility transfer was approved Wednesday evening at a special meeting and staff was instructed to prepare agreements to be considered at an Aug. 11 council meeting.

 

The decision was not made easily – it took two hours of discussion.

 

Robert Cottrill of the economic development committee, told council that Bruce Power, which supplies raw water and sewage facilities to the BEC, is not interested in serving new customers at the BEC. By taking over the utilities, the municipality would stabilize the existing businesses as they would rather deal with a public utility than a private corporation. The other advantage to the move is that the environment for attracting new businesses improves.

 

“It’s frustrating that jobs have been slipping away because of things beyond our control,” he said.

Hamilton area businessman Charles Juravinski, who has invested in the BEC, urged council to take over the utilities. There is interest in businesses coming to Kincardine and a takeover will create jobs and “benefit everyone sitting in this room.”

 

There are 700 acres crying for good development, he said.

 

And Ted Dodkin of Greenfield Ethanol, located in the BEC, said industry at the BEC supports the transfer as costs are near neutral and it allows industry to work towards a lower cost energy supply. (Following the meeting, Dodkin said his company is installing its own boilers to produce steam and they should be in operation by late spring, 2011. Greenfield will use 30 per cent less bunker oil than the current steam source since it won’t have to be transported from the nuclear site.)

 

 Engineer Bruce Potter of B.M. Ross and Associates said the total cost of upgrades or repairs to the sewer and water systems over the next seven to 10 years is approximately $930,000. The cost of replacing the assets being transferred by Bruce Power to the municipality is $9 million, said Potter.

 

Besides transferring a $9 million asset, said Murray Elston of Bruce Power, the company will provide $300,000 as seed money for repairs and transfer $100,000 of lands supporting the sewage treatment plant and water tower. The sludge in the lagoon has also been tested.

 

There are advantages for the municipality, said CAO John deRosenroll. The deal would provide more sewage capacity for business and residential growth, Kincardine staff can operate the facilities without the addition of more staff and the municipality will no longer have to pay Bruce Power $100,000 per year for utility services.

 

On the legal front, municipal solicitor George Magwood said the agreement will contain an unforeseen liability clause for two years for items not identified in the engineering review; Kincardine would pay the first $25,000 of these repairs and Bruce Power the balance. Since this is an election year, the deal will have to be completed by nomination day, Sept. 9.

 

If you look at the finances over a six-year period, Kincardine would have a surplus of $192,038.40, said deRosenroll. Kincardine is looking at $930,000 in repairs over the next 10 years. Bruce Power is providing $300,000 in seed money, leaving a deficit of $630,000. However, Kincardine would receive $137,006.40 per year in service charges from the three companies at the BEC. Over six years, that is $822,038, leaving the municipality with a reserve fund surplus of $192,038.40. Over 10 years, the surplus would be $581,824.70.

 

However, everyone did not think the transfer a good idea.

 

The status quo is treating Tiverton very well, said Ed Roberts of the Tiverton and District Ratepayers Association. The sewage system has ample capacity and the price is reasonable.

 

An independent report by an engineer who works for neither Bruce Power nor the municipality is needed so the municipality doesn’t end up in trouble down the road, he said.

 

“There is no bonus for the people I represent in Ward 3,” said councillor Randy Roppell. It’s neither here nor there if Bruce Power wants to get out of the business. They’re on the hook. It’s time they lived up to the agreement.

 

Councillor Ron Hewitt wondered who would pay the shortfall which could happen if businesses there were to shut the door. He added that the municipality would be stuck with a huge cost if the BEC doesn’t succeed.

Hewitt’s question of who pays if there is a shortfall, is one that could not be answered. The answer will come to council Aug. 11 along with the other documents.

 

Hewitt asked for a recorded vote. He and Roppel voted against the motion to proceed with the takeover. Voting for the motion were mayor Larry Kraemer and councillors Guy Anderson, Ken Craig, Marsha Leggett, Mike Leggett.