'A good earnings year': Enmax reviewing dividend policy after delivering $95M to city in 2023

Soaring electricity prices helped Enmax report comparable net earnings of $316 million in 2023, up from $274 million the year before

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Enmax is reviewing its dividend policy this year, after delivering $95-million to the city in 2023.

The municipally owned power corporation held its annual general meeting at city hall on Friday, highlighting the wholly owned subsidiary’s strong financial position following a year of volatile electricity prices.

At the same time its AGM was underway, Enmax also released its compensation information for 2023, revealing CEO and president Mark Poweska earned more than $3.1 million in total compensation last year, including more than $2 million in short-term incentives and performance bonuses. Four other top Enmax executives topped $1 million in overall compensation.

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‘We had a good earnings year’

Soaring electricity prices, which reached record highs last August, helped Enmax report comparable net earnings of $316 million in 2023, up from $274 million the year before.

Over the years, Enmax has delivered almost $1.4 billion in dividends back to the city, its sole shareholder. The utility delivered $82 million in dividends in 2022 and $62 million in 2021.

Poweska said Enmax’s current policy is to deliver at least $30 million or 30 per cent of the corporation’s comparable net earnings. The corporation is focused on cost containment to ensure the money it spends is “in the right place, at the right time and for the right amount,” he added.

“We had a good earnings year from the perspective of our two regulated businesses,” he said, referring to Enmax Power and Versant Power, a Maine-based electric transmission and distribution utility that Enmax acquired in 2020 for $1.3 billion.

“The energy market in Alberta overall in our Enmax Energy group, obviously, part of the cost of electricity last year was because the markets were high. We did benefit from that somewhat.”

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Poweska noted that since the city bought Enmax in 1998, the subsidiary has grown the municipality’s initial $280-million investment into an equity of almost $3 billion.

Enmax CEO Mark Poweska
Enmax CEO Mark Poweska earned more than $3.1 million in overall compensation last year. Gavin Young/Postmedia

Review ‘seems like it’s in slow motion,’ says councillor

At least one councillor expressed frustration Friday at Enmax’s slow progress on reviewing its dividend policy.

During the AGM, Ward 14 Coun. Peter Demong asked executives for an update on reviewing its dividend policy, referencing council’s direction the year before.

“Did we not, last year, ask you to come up with a new proposed dividend policy, or something to that effect?” he asked.

Enmax’s board chair Charles Ruigrok responded that the review would take place this year. He referred to a governance analysis conducted a few years ago that determined other elements should be completed beforehand, such as defining what the “shareholder value proposition” is, as well as which metrics could help the city “hold Enmax accountable” on delivering its commitments.

“It does make sense to define what the value proposition for the city (is) . . . before turning to the dividend policy,” he said.

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But Demong maintained the review shouldn’t have waited a year to get underway. “This seems like it’s in slow motion,” he said.

Mayor Jyoti Gondek told reporters after Friday’s meeting that she feels council is “well positioned” for a conversation about Enmax’s dividend policy, acknowledging the 30 per cent earnings status quo has been in place for some time.

“As we heard today, there is work being done on the dividend policy between our administration and Enmax,” she said. “When that item is ready to come to council, we’ll have a fulsome debate with all the information before us.

“I always like to see things move quicker than they do, but there are reasons why things take time. I think the thoroughness with which our administration and Enmax are working together is the reason it’s taking some time.”

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Compensation info released

At the same time as its AGM on Friday, Enmax released its annual report on governance and compensation for 2023.

The report revealed Poweska received roughly $3.1 million in total compensation last year, or about $1.4 million more than the $1.7 million he earned in 2022.

Ruigrok said Poweska’s compensation jumped significantly last year because the 54-year-old only joined Enmax in September 2022, after previously working for Ontario’s Hydro One and BC Hydro.

Poweska’s earnings are still $700,000 less than the $3.8 million former Enmax CEO Wayne O’Connor received for 10 months of service in 2021, which included $1.9 million in bonuses.

Four other executives at Enmax also earned more than $1 million in total compensation last year, according to the report. Those include CFO Preet Dhindsa, ($1,916,835); departing Enmax Power president Jana Mosley ($1,068,085); Versant Power president John Flynn ($1,292,280) and chief legal, commercial and regulatory officer Erica Young ($1,007,223).

Those compensation levels are consistent with what executives earn at other energy generators and utilities, Ruigrok said, adding that Enmax’s executive compensation plan includes hiring a consultant to compare what executives earn at other utility providers across Canada.

“You really need a good, strong team to run the businesses in Alberta and deliver value for the shareholder,” he said.

“I think you’re seeing compensation go up across the board, not only in our industry (but) in every sector across Alberta. What you’re seeing is very consistent with what’s happening throughout our industry and elsewhere.”

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