ALF V1

A retired lawyer's legal fight with the city and EPCOR ended after his lawsuit challenging EPCOR's multibillion-dollar sale of their power-generating assets was dismissed in court yesterday.

"I think I've done my duty as a citizen to bring this forward, put some sunlight on the situation," said Bill Pidruchney, former head of Alberta Securities Commission, outside the courthouse.

CLOUD OVER COUNCIL

"However, the unhappy thing is that there is a cloud hanging over city council and over the city with respect to this transaction."

The city and EPCOR were successful in their application to have Pidruchney's legal action dismissed. Pidruchney was also ordered in court to cover some associated legal costs.

Pidruchney had launched legal action after alleging that the city had made the April 17 decision behind closed doors to spin off its publicly owned Canadian and U.S. power-generation assets into a new local company called Capital Power Corporation.

He tried to obtain an injunction to stop the sale but was denied in July.

A trio of labour groups, including the Alberta Federation of Labour, later also tried to challenge the sale in court but were unsuccessful.

"There will be no more legal steps from my point of view, but there are plenty of practical steps that should be taken in dealing with council," Pidruchney said. '

"There are questions that must be answered before the next election. We'll keep digging from a citizen's point of view now and see what comes up."

UNMERITED CLAIM

EPCOR spokesman Tim le Riche said Pidruchney's claim was without merit and that the court has upheld the process used to create Capital Power.

"We uphold that the creation of Capital Power is a benefit to EPCOR and to its sole shareholder, the citizens of Edmonton," le Riche said.

Edmonton Sun, Thurs Dec 24 2009
Byline: Clara Ho

Financial results showing that EPCOR lost $56 million in the third quarter of 2009 should be a wake-up call for members Edmonton City Council who voted six months ago to relinquish control over $5 billion worth of electrical power generation assets previously owned by the citizens of Edmonton through EPCOR.

"In 2008, before the City spun off EPCOR's power generation assets, EPCOR was so profitable that it generated a $130 million dividend for the City of Edmonton which allowed them to keep municipal taxes 25 per cent lower than they would have been otherwise," said Gil McGowan, president of the Alberta Federation of Labour, one of three union groups that took the City of Edmonton to court in a bid to stop the spin off.

"Without the power generation assets, which were responsible for something like 70 or 80 per cent of EPCOR's profits, EPCOR will never be the cash cow that it was for the citizens of Edmonton. And that means the City will either have to increase taxes dramatically or consider deep cuts to basic services. Obviously, neither of these options is particularly appealing."

McGowan says the 3rd quarter results are illuminating not only because they show that EPCOR lost $56 million (compared to a profit of $76 million for the same three months last year) but also because they show that EPCOR has been dramatically diminished as a corporation.

"With the spin-off of power assets to Capital power and the privatization of 30 per cent of those assets, EPCOR has been transformed from a corporation with nearly a billion dollars worth of revenue each quarter to a corporation with only about $350 million of revenue each quarter," says McGowan.

"EPCOR CEO Don Lowry called a news conference today to reassure Edmontonians that the new EPCOR, minus its most valuable assets, will somehow continue to generate similar level s of income for the City. But he's living in a fantasy world if he thinks his dramatically diminished corporation will ever generate $130 million in dividends for the citizens of Edmonton. You can't give away the assets responsible for 80 per cent of your profits and expect to continue making the same kind of money. The numbers just don't add up."

McGowan says he hopes EPCOR's dismal results will convince members of City Council to admit a mistake was made and stop the anticipated sale of the 70 per cent of power generation assets that have not yet been privatized by Capital Power.

"The good news is that there's still a chance for City Council to do the right thing and reassert their control over our city's remaining power assets. But that will require strong leadership and political will. Let's hope that members of Council have the internal fortitude to do the right thing."

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For more information call: Gil McGowan, AFL President @ (780) 218-9888

The court decided council could act as shareholders outside public scrutiny because "natural person powers" provided under legislation allowed for them to bypass sections of the Municipal Government Act.

Gil McGowan, president of the Alberta Federation of Labour, expressed dismay at the ruling. He teamed up with Civic Service Union 52 and the Canadian Union of Public Employees 30 two weeks ago to contest council's private vote to support the multibillion-dollar deal placing Epcor's power generation branch with Capital Power and offering public shares.

"We're deeply troubled by this decision," he said in a statement released the same day. "It seems to imply that there are no limits to the powers of city council to delegate important civic functions and decisions to individuals and bodies that are not accountable to the public. It's a blank cheque for politicians who want to make unpopular decisions without any public input."

However, Darrell Lopushinsky, a lawyer with the city law branch, said "natural person powers" is not an official excuse for council to do whatever it pleases.

"It means," he says, "that unless there's some statutory prohibition, a municipality, acting through city council, can do things that any natural person or corporation could do."

Such legislation was introduced to move municipalities out of the strict confines of statutes.

"The idea," Lopushinsky says, "is that municipalities are given a bit more freedom to do things, but it doesn't give them carte blanche to do whatever they want."

Still, McGowan says representatives should not act separately from the public.

"Ruling or no ruling," he said in the press release, "the fact remains that major assets owned by the citizens of Edmonton were sold off in secret and without any public consultation. The mayor and senior managers from Epcor and Capital Power can now say that what was done is technically legal, but that doesn't make it morally or ethically right."
The loss marks another failed attempt to challenge the Epcor spinoff and city council's role as private shareholder since local lawyer Bill Pidruchney tried unsuccessfully for an injunction against the sale of shares in July.

That has not discouraged McGowan from tackling the matter further. According to the press release, the union coalition plans to pursue the issue, possibly through an appeal of the court decision, or the union group could push city counillors by making Epcor's privatization a major issue in the next municipal election.

See Magazine, Thurs Oct 1 2009
Byline: Tim Cooper

The Alberta Federation of Labour, along with two other city unions took the city to court earlier this month. They asked Court of Queen's Bench to determine whether city council had followed the proper process, when the decision was made behind closed doors to spin off three-billion dollars worth of power-generation assets owned by EPCOR, and sell about half-a-billion worth of those assets to the private sector. Those are assets the unions say belong to the people of Edmonton.

The court ruled that, thanks to the "natural person powers" granted to the City under legislation, members of council didn't have to abide by sections of the Municipal Government Act. Those sections say all decisions made by municipal councils have to be made in public forums.

The unions will meet next week to plot their next move.

iNews880, Fri Sept 25 2009

Ruling doesn't change the fact that Edmonton city council did an end run around the democratic process, says AFL

EDMONTON - The labour unions that launched a legal challenge aimed at reversing the secretive privatization of hundreds of millions of dollars worth of power generating assets owned by the citizens of Edmonton will meet next week to consider their options for appeal now that a lower court has ruled against them.

On September 11th, the Alberta Federation of Labour, along with two unions representing City of Edmonton employees (Civic Service Union Local 52 and Canadian Union of Public Employees Local 30) asked the Alberta Court of Queen's Bench to make a declaration on whether or not Edmonton City Council had followed the proper process when they decided behind closed doors to spin-off $3 billion worth of power generation assets owned by Epcor and sell about $500 million worth of those assets to private investors.

In a decision released this afternoon, the court ruled that, thanks to the "natural person powers" granted to the City under legislation, members of City Council didn't have to abide by sections of the Municipal Government Act which say all decisions made by municipal councils have to be made in public forums.

"We're deeply troubled by this decision," says AFL president Gil McGowan. "It seems to imply that there are no limits to the powers of City Council to delegate important civic functions and decisions to individuals and bodies that are not accountable to the public. It's a blank cheque for politicians who want to make unpopular decisions without any public input or scrutiny."

McGowan says that he and other union leaders involved in the court challenge will be meeting next week to consider all of their options - including whether or not to launch an appeal.

"Ruling or no ruling, the fact remains that major assets owned by the citizens of Edmonton were sold off in secret and without any public consultation," says McGowan. "The mayor and senior managers from EPCOR and Capital Power can now say that what was done is technically legal. But that doesn't make it morally or ethically right."

McGowan says he is disappointed that the lower court judge didn't directly address the union coalition's main argument that - in the spirit of promoting democracy - the City's power to delegate decision-making power needs to be interpreted narrowly.

"We frankly continue to believe that the arguments put forward by the City and Epcor are nothing more than flimsy excuses used to justify shutting the public out of this extremely important decision. The bottom line is that they did an end run around the democratic process - and in their heart-of-hearts they all know it."

McGowan says the union coalition remains committed to stopping similar kinds of "abuses of the democratic process" from happening again. That may mean an appeal of today's court decision, says McGowan, or it may mean making the privatization of Epcor a major issue in the next municipal election campaign.

"The citizen's of Edmonton deserve better from the people they elect to represent them. Citizens deserve transparency and they deserve to be consulted on decisions of this magnitude. We're going to everything we can to make sure voters know which members of Council let this travesty of democracy unfold. And we'll be encouraging voters to hold their elected officials properly accountable."

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For more information call: Gil McGowan, AFL President @ (780) 218-9888

Ruling doesn't change the fact that Edmonton city council did an end run around the democratic process, says AFL Sep 25, 2009

EDMONTON - The labour unions that launched a legal challenge aimed at reversing the secretive privatization of hundreds of millions of dollars worth of power generating assets owned by the citizens of Edmonton will meet next week to consider their options for appeal now that a lower court has ruled against them.

On September 11th, the Alberta Federation of Labour, along with two unions representing City of Edmonton employees (Civic Service Union Local 52 and Canadian Union of Public Employees Local 30) asked the Alberta Court of Queen's Bench to make a declaration on whether or not Edmonton City Council had followed the proper process when they decided behind closed doors to spin-off $3 billion worth of power generation assets owned by Epcor and sell about $500 million worth of those assets to private investors.

In a decision released this afternoon, the court ruled that, thanks to the "natural person powers" granted to the City under legislation, members of City Council didn't have to abide by sections of the Municipal Government Act which say all decisions made by municipal councils have to be made in public forums.

"We're deeply troubled by this decision," says AFL president Gil McGowan. "It seems to imply that there are no limits to the powers of City Council to delegate important civic functions and decisions to individuals and bodies that are not accountable to the public. It's a blank cheque for politicians who want to make unpopular decisions without any public input or scrutiny."

McGowan says that he and other union leaders involved in the court challenge will be meeting next week to consider all of their options - including whether or not to launch an appeal.

"Ruling or no ruling, the fact remains that major assets owned by the citizens of Edmonton were sold off in secret and without any public consultation," says McGowan. "The mayor and senior managers from EPCOR and Capital Power can now say that what was done is technically legal. But that doesn't make it morally or ethically right."

McGowan says he is disappointed that the lower court judge didn't directly address the union coalition's main argument that - in the spirit of promoting democracy - the City's power to delegate decision-making power needs to be interpreted narrowly.

"We frankly continue to believe that the arguments put forward by the City and Epcor are nothing more than flimsy excuses used to justify shutting the public out of this extremely important decision. The bottom line is that they did an end run around the democratic process - and in their heart-of-hearts they all know it."

McGowan says the union coalition remains committed to stopping similar kinds of "abuses of the democratic process" from happening again. That may mean an appeal of today's court decision, says McGowan, or it may mean making the privatization of Epcor a major issue in the next municipal election campaign.

"The citizen's of Edmonton deserve better from the people they elect to represent them. Citizens deserve transparency and they deserve to be consulted on decisions of this magnitude. We're going to everything we can to make sure voters know which members of Council let this travesty of democracy unfold. And we'll be encouraging voters to hold their elected officials properly accountable."

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For more information call: Gil McGowan, AFL President @ (780) 218-9888

The Alberta Federation of Labour, with Civic Service Union 52 and the Canadian Union of Public Employees 30, attacked the behind-closed-doors approach of councillors and Mayor Stephen Mandel in April to help place the municipally owned utility's power generation branch with a new company, Capital Power, and offer public shares.

"We believe city council acted illegally," Alberta Federation of Labour president Gil McGowan says. "We argued that the process followed by council contravened important sections of the Municipal Government Act, in particular the sections requiring council to make their decisions in public forums and the sections related to delegation."

Bill Pidruchney, a local lawyer and former head of the Alberta Securities Commission, attempted to get an injunction against the sale of shares in Capital Power on similar gounds in July, and lost.

Councillors have argued they are exempt from making decisions in the public domain while acting as shareholders, as they do with Epcor. However, McGowan thinks the shareholder title does little to defend their private actions.

"The MGA says that the council has to meet in public, but it doesn't say anything about shareholders," he explains. "The shareholders group has no legal existence under the MGA, which clearly states that city council can only delegate its decision making authority to committees of council, or the chief administrative officer.

"Therefore any decision made by that group is not valid."

Epcor spokesperson Tim le Riche disagrees: "The only thing we can say is what we've been saying all along, and that is that Epcor believes the claims are without merit, and we will vigourously defend ourselves as we have done."

With arguments from Epcor, city council, and the union coalition completed, the case now awaits Justice Stephen Hillier's deliberation.
If he decides the union coalition's claims do have merit, it is possible the sale of shares may be declared invalid.

McGowan recognizes the huge implications of such a ruling.

"There's absolutely no doubt that a declaration from the court nullifying the privatization will cause a huge headache for everyone who bought shares in the initial public offering," he says. "But in our perspective, the interests of investors have to take a back seat to the interests of the people who own the assets and didn't have a say in their sale."
A ruling is expected to come down in the coming weeks.

See Magazine, Thurs Sept 17 2009
Byline: Tim Cooper

EDMONTON - The controversial Epcor deal was brought back to court Friday with a coalition of union groups arguing for a judge in the Court of Queen's Bench to review how the deal came together.

"The issue today is not about job and union contracts, the issue is about democracy," Gil McGowan, president of the Alberta Federation of Labour, said before heading into the courthouse.

McGowan, Terry Jardine from the Canadian Union of Public Employees Local 30, and Leo Derkach from the Civic Service Union 52, are bringing the matter to court.

City council in April approved a deal that saw Epcor's power-generating plants carved off into a new company, separate from the city-owned utility. The public officials voted on the deal in a closed meeting on April 17.

Ben Henderson and Amarjeet Sohi were the only city councillors to vote against the deal.

Some councillors have said they were acting as Epcor shareholder representatives, not city councillors, when they made the decision. The city owns Epcor and city council's role is that of sole shareholder, acting on behalf of citizens, they argue.

McGowan said his group is arguing that the way the deal happened contravenes the Municipal Government Act.

"The notion that they can switch their hats and act behind closed doors ... we're challenging their right to do that," McGowan said.

This is at least the second time the Epcor deal has been taken to court. In July, a judge rejected a request for an injunction on the deal by Bill Pidruchney, a former head of the Alberta Securities Commission.

In court, Pidruchney argued taxpayers should be given the opportunity to vote on the sale because they built Epcor over 118 years and benefited from $138 million in dividends last year.

The new company, Capital Power, completed a $500-million IPO (initial public offering) in July and is now the largest publicly traded company based in Edmonton.

Edmonton Journal, Fri Sept 11 2009
Byline: Alexandra Zabjek

A trio of labour groups took EPCOR to court today to challenge the sale of the company's publicly owned power generation assets.

The Alberta Federation of Labour, the Canadian Union of Public Employees Local 30, and the Civic Service Union 52 took issue with the city's April 17 decision to spin off EPCOR's power-generating assets and sell them without first consulting Edmonton citizens.

"We believe city council acted illegally when they met behind closed doors to spin off EPCOR's power generating assets," said Gil McGowan, president of the Alberta Federation of Labour.

McGowan said the city contravened sections of the Municipal Government Act that requires city council to make decisions in public forums and through motions or bylaws, and restricts council from delegating decision-making powers to whomever they choose.

The union groups are now asking the court to declare the multi-billion-dollar deal void and have it potentially overturned.

McGowan insists the case is not about jobs or union contracts but about protecting the democratic process.

"We obviously have problems with the whole idea of privatization, we don't support it. But the arguments we made in court were not so much about the merits of the decision but rather focused on the process that was followed."

EPCOR spokesman Tim LeRiche declined to comment on the specifics of the case.

"The arguments have been made," LeRiche said. "We'll just have to wait to see what the judge's ruling is."

Edmonton Sun, Fri Sept 11 2009
Byline: Clara Ho