Enmax - Karen Prentice

The Power To Do Anything

Deregulation of the electricity sector in Alberta is creating fierce competition among industry participants. One of the chief players is ENMAX Corporation, the 90-year old wholly-owned City of Calgary utility. Its challenge: to transform itself from a distribution and transmission monopoly into a nimble, competitive and profitable energy company with a diverse product base.

It's off to a good start. Three years ago, in anticipation of changes to the legislation governing the electricity sector, ENMAX Corporation and its two subsidiaries, ENMAX Power Corporation and ENMAX Energy Corporation were created. Each subsidiary has a distinct focus. For starters, one company (Power) is regulated; the other (Energy) is not. Under the new legislative regime, transmission will remain regulated. As for everything else (generation, supply and distribution, for example), market rules prevail.

And it's not just about electricity. In this "wired world", convergence of technologies has created opportunities for the supply of new products and services. ENMAX Energy is positioning itself to offer customers a portfolio which includes the lease of its fibre optics network to transmit high-speed data in and around Calgary. Other products and services included in the ever-expanding energy portfolio are the construction and operation of outdoor and street lighting, light rapid transit traction power systems, telecommunication systems and electronic devices. Experience of deregulation in other jurisdictions suggests that other services-telephone, gas, cable-may follow.

The stakes are high. Loss of market share, lower sales margins through competition and a less predictable supply/demand balance are only a few of the risks facing ENMAX Corporation. The rewards are likewise considerable, and lie chiefly in the potential for revenue opportunities associated with the opening of new markets across a wide range of products and services. This corporate counsel profile illustrates that with change comes increasing opportunity for in-house counsel to contribute beyond a purely legal function. For this Albertan, the power to do anything!

The Company: In 1998 (the latest year for which figures are available), ENMAX Corporation had a net income of $65.2 million on revenues of $520 million. Net income was up 25 per cent over 1997, primarily due to increased electricity sales, the introduction of new business activities and reduced spending. Capital expenditures were approximately $52.8 million, compared to $40 million in 1997.

Title: Vice President, Legal and Corporate Affairs

Age: 46

Principal Outside Counsel: Over the last two years, Stikeman Elliott has emerged as principal counsel.

Other Significant Firms: In preparation for deregulation, ENMAX's requirement for specialized legal services from outside counsel has been considerable over the past three years. It has retained Donahue & Partners for ENMAX Energy and its retail work. Burnet, Duckworth & Palmer and Parlee McLaws have worked on a range of other matters, including regulatory affairs. The City of Calgary's law department provided corporate, commercial and litigation support, especially when ENMAX was launched.

The Law Department: The department is focused on corporate and commercial work to assist its retail company, ENMAX Energy, to manage in a deregulated business environment. Both commercial and residential customers are being served, and more will be added in coming months as the corporation expands beyond the Calgary area. Legal work involves real estate, environmental, equipment purchases and leases, significant construction projects and joint ventures. In addition to Karen Prentice, there are four lawyers in the department. Two lawyers are working in energy risk management and employment/ labor law.

Litigation: Because of the carry-over from municipal self-insurance arrangements, there has been relatively little activity in the litigation portfolio. Cases are managed as part of a service agreement with the City's litigation team.

Transactions: The changes to and the challenges of operating in the Alberta deregulating electric energy environment affect the range of transactions handled by ENMAX's legal services team. On the ENMAX Power side, examples include major services and facilities acquisitions, software systems purchases and joint service arrangements with other utilities. On the developing retail side operated by ENMAX Energy, new products and services are being offered and agreements are being developed to bring them to market. Energy trading and retail sale agreements are being introduced, along with other transactions addressing the use of the fibre optics network.

Management Challenge: The diversification of ENMAX within the retail sector has prompted considerable growth in numbers of new employees in the last 24 months. Creating a new entrepreneurial culture out of one which was municipal and service-based is a substantial task. The challenge is to reconcile the best of both while moving away from a bureaucratic and regulated environment.

Improving Outside Counsel: The volatile law firm and energy environment in Calgary means that no single law firm has yet fully commanded ENMAX's attention. Avoiding business conflicts is paramount. Law firms must move quickly to a totally paperless environment, and work with ENMAX's lawyers on a co-counsel basis.

Style: Karen's strong suit is to "sort out messes". She has strong interpersonal skills, and prefers conversations instead of e-mail to persuade and influence people. She has a good sense of strategy and public policy, both essential in a political and publicly accountable environment.

Career: After five years in private practice, specializing in construction law and commercial litigation, Karen spent four years with the City's law department preparing municipal contracts, leases, sponsorship agreements, and in drafting a broad range of by-laws. The last five years with the City provided her with experience in the Finance Department and with the Commissioner's Office on matters of commercial interest. As Secretary to the Board of Commissioners, she was involved in policy and governance issues. For the last three years, Karen has been responsible for an increasingly varied portfolio at ENMAX. Aside from Legal Services, she is responsible for Regulatory Affairs, Human Resources, the Corporate Secretariat and ENMAX's Y2K Team.

Community: Karen has been contributing to her community for more than 20 years, and served on the Boards of Governors of the Southern Alberta Institute of Technology and its Foundation, the Y.W.C.A. of Calgary, and the University of Calgary, Faculty of Medicine Admissions Committee. She is President of the CCCA's Calgary chapter and a member of the executive committee of the General Counsel Association of Alberta.

Family: Married with three daughters.

Reading: Currently reading Golden's Memoirs of a Geisha, and Wally Lamb's I Know This Much Is True. The benefits of creative thinking and being intuitive are treated in Tanis Helliwell's Take Your Soul to Work. Karen says she has "never read a Grisham novel".

Relaxing: With Human Resources in her portfolio, Karen believes that she has a responsibility to show leadership in wellness and balanced living. She recently spent one week at a yoga retreat in Molokai, Hawaii, and has sessions three times a week with a kinesiology specialist for fitness training. She enjoys hiking on the West Coast Trail on Vancouver Island and has overcome altitude sickness and successfully climbed to see the ruins of Machu Pichu in Peru.

Richard G. Stock, M.A. FCIS, C.ADM., CMC, and Patricia M. Byrne are partners with Catalyst Consulting, a firm with offices in Montreal, Toronto and Vancouver. Catalyst Consulting has been designated the Preferred Supplier for Legal Services Consulting by both the CBA and the Canadian Corporate Counsel Association.