Selling Off Local History

Whispering in the Wind (WITW 82) July 15, 2015

Every once in a while something “big” happens in the Smoky Lake area – something that requires attention, scrutiny and hopefully some sober second thought.  A few years back the issue was City of Edmonton water coming into a number of communities in the Smoky Lake, Thorhild areas.  Today, it is the supply of electricity to farmers, ranchers and other rural landowners in the Smoky Lake, Vegreville areas. 

ATCO Electric’s Bid

A month ago I was visited by a representative from the ATCO Electric organization.  After a few niceties about the weather I was given a pamphlet outlining an offer-to-purchase proposal to owner-members of the Lakeland Rural Electrification Association.  The pamphlet was/is clear; ATCO Electric is offering to purchase the operations and assets of the Lakeland REA, a regionally owned electricity cooperative.  The offer by ATCO is described in the first paragraph of their pamphlet:  “… ATCO Electric’s purchase proposal of $30,168,234 for the Lakeland REA system would be divided among the approximate 1,448 Lakeland member contract holders.”

Lakeland REA’s Reaction    

The Lakeland REA’s Board of Directors were apparently stunned by ATCO’s “hostile” maneuver.  The board is suggesting that the unsolicited offer to the REA members was contrary to ATCO’s policy on how ATCO would do business with REAs – and the understanding held by the regulator of Alberta’s electricity industry, the Alberta Utilities Commission.  I understand ATCO faxed their offer notice to Lakeland REA’s head office in Vegreville on June 15 – and at the same time, ATCO employees were in the region distributing offer-to-purchase pamphlets to REA owner-members.  About a day or so later members received a leaflet in the mail entitled “MESSAGE FROM YOUR BOARD OF DIRECTORS RE: ATCO’S HOSTILE TAKEOVER ATTEMPT”.  The leaflet went on to state:  “Your Board of Directors is unanimous in its opinion that a sale to ATCO would not be in the best interests of the Lakeland REA membership.”  The information leaflet also claimed that ATCO was not operating in “good faith” and was providing “misleading information” to Lakeland REA members.  To facilitate a better understanding of the issues involved, the Lakeland REA announced information sessions in Mundare, Smoky Lake, Vegreville and Derwent – ATCO also announced scheduled information sessions in their pamphlet – same towns, same dates and times, different venues.

Concurrent Information Meetings 

For Smoky Lake, the information sessions were held on July 8, from 4 to 7pm.  The REA’s session was held at the Smoky Lake curling club, ATCO’s session was staged at the Ukrainian National Hall.  At the curling club about 75 – 80 REA members heard the co-op’s president, Bernie Klammer express board’s frustration and despair regarding the actions and process undertaken by ATCO Electric.  Most of my time was spent at the Smoky Lake curling rink and from what I observed, attitudes have polarized within the REA community in the Smoky Lake area, and there doesn’t appear to be a way to develop a reasonable consensus.  From my perspective the challenges for the REA board will be difficult and the biggest challenge will be to achieve the best possible result for the Lakeland REA owner-members – and that means translating the nostalgia and the sweat put into building and maintaining a locally owned utility system into dollars and cents.  In accounting terms, it means introducing the “goodwill” factor.