Nature of the asset
The electric transmission system owned and operated by AltaLink L.P. services almost 85% of Alberta’s electrical transmission requirements, covering the most densely populated parts of southern Alberta including the areas around Calgary and Edmonton. AltaLink employs approximately 250 transmission staff to operate and maintain the system.
The transmission system covers 212,000 square kilometres in the southern half of Alberta and currently comprises 11,850 kilometres of overhead lines and 260 substations. These assets account for over half of Alberta's high voltage/high capacity lines. AltaLink also owns the Alberta portion of the 500kV interconnection between Alberta and British Columbia with a continuous rating of 400MW on import and 600MW on export.
AltaLink’s operations are highly efficient. In a 1998 study by Hagler Bailly, the assets ranked in the first quartile amongst 48 North American companies in terms of cost, efficiency and reliability. In particular, AltaLink’s frequency and duration outage statistics are consistently significantly lower than the Canadian Electrical Association averages. Over 60% of AltaLink’s assets are less than 20 years old.
AltaLink, as an owner of a transmission system in Alberta, is regulated by the Alberta Energy and Utilities Board.
Nature of the investment
In July 2001, TransAlta Utilities Corporation (TransAlta), in its strategy to restructure itself from an integrated utility to a generation company, had decided to divest its transmission division. The successful bidder was a consortium comprised of Macquarie (15%), SNC-Lavalin Inc. (50%), Ontario Teachers’ Pension Plan Board (25%) and Trans-Elect Inc. (10%). The acquisition was funded by acquisition bridge financing and investor equity. The bridge financing will be refinanced through a series of bond issues which will include real return bonds, unsecured debentures issued via prospectus in Canada as well as subordinated private placements. Operating and capital expenditure facilities have been provided by a Canadian commercial bank.
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