When Edmonton business leader Hugh Bolton meets with civic politicians from other cities, he’s often asked about the great success of Epcor.
How did this particular city-owned utility company become such an international powerhouse when other such entities are mediocre in terms of growth and dividends?
Bolton, the chairman of the Epcor board from 2000 to 2018, always has the same answer. The key is keeping politicians and political influence off the company board, he says, thus freeing up actual business people to do what they do best, make carefully calculated decisions geared towards the company thriving.
This answer doesn’t go over well, not with politicians who cherish board positions and the decision-making power that goes with them.
“As soon as I tell them that their eyes glaze over,” Bolton said. “They’re not interested.”
Bolton is passionate about building up Edmonton, but the most valuable thing he’s got to offer may be the advice he has for local leaders on how Epcor and the city can continue to succeed.
There’s a new-found confidence here, with Edmonton shedding its inferiority complex, he said. “If you asked me what Edmonton’s future is, I’d say good, I’d say good-plus, but with some caveats.”
He worries about populist sentiment sweeping away Mayor Don Iveson, whom Bolton admires for his sharp mind and his centrism, especially if city council can’t get a grip on property tax increases.
He also worries about no new pipelines getting built. “I just see gridlock on this file with no way out.”
Edmonton was good for Bolton as he launched an illustrious international business career from here. But Bolton, as sharp and commanding as ever at age 80 (which he says “is the new 60”), has done even better for Edmonton, so much so that he recently had a street named after him in northwest Edmonton, Hugh Bolton Way.
Bolton was a partner in Edmonton’s biggest accounting firm, then in 1992 the first western Canadian to become chairman of a major national accounting firm in Toronto, Coopers & Lybrand, and finally the chairman of Epcor during its massive expansion from a local public utility into a North American giant in electrical, natural gas and water transmission and distribution networks.
His philosophy as a business leader?
“You surround yourself with great people and let them do their jobs and stay out of their hair. But know the difference between abdication and delegation. You delegate but you keep an eye on things. A lot of people delegate but just let things go.
“When things go wrong, you own it. When things go right, other people get the credit. That’s paid off a million times. When there is a crisis, it doesn’t matter if you knew about it or not, you own it. I had a sign on my desk that said, ‘Fix the problem, not the blame.’”
In 1999, then Edmonton mayor Bill Smith asked Bolton to return to Edmonton to become Epcor chairman. Bolton was hesitant about running a local public utility, but something Smith said intrigued him, that there would be no political interference and no councillors on the Epcor board.
“We had gutsy politicians who said the business guys can run the business on their own better than we (city government) can,” Bolton said.
He became chairman on Jan. 1, 2000. “It was the smartest thing I ever did. I stayed 18 years and watched this company grow from a Mickey Mouse utility … to the city’s crown jewel.”
In those 18 years, the annual dividend paid to the city increased to more than $150 million per year from $70 million per year. If Epcor were to go away, all of our property taxes would have to go up by about 10 per cent.
The key moment for Epcor came in 2009 when the board decided it was better to spin off its coal-fired power generation business into a new public company, Capital Power, transferring the business risk from city taxpayers to investors. At the same time, Epcor’s leadership decided to invest half of the $2 billion earned in a move into the water utility business in Arizona.
The board realized Arizona was a good bet, given that the water business and rate of return was regulated, but it was at this key moment that we get to the core of Bolton’s enduring message about the need to keep overt politics out of business decisions. He doubts Epcor would have invested $1 billion in water in the Arizona desert if political concerns had dominated the Epcor board.
“Can you imagine? No politicians would ever take that risk.”