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case study

FORT MCMURRAY WEST

Background

The Alberta Electric System Operator (AESO) was mandated to procure a 500 km transmission line and 2 500 kV substations between Edmonton and Fort McMurray using the first part of the recently approved Competitive Process for the first time.  The procurement was for the full life cycle costs associated with the facility.
 

The selection of the preferred bidder for this project required that the process incorporate the financing costs.  The AESO selected Alberta Power Line’s C$1.433 billion bid in December 2014 as the preferred bidder.
 

Following the selection, the preferred bidder was required to obtain route approval from the Alberta Utilities Commission (AUC) over the following 2 years. 
 

The AUC approved the project in February 2017 which then led to completion of the financial close process.
 

The AESO and Alberta PowerLine reached financial close on October 2, 2017 through the issuance of C$1.38 billion of bonds with maturities ranging from June 2032 to March 2054.

1.433b
C$1.433 billion bid
1.38b
C$1.38 billion of bonds with maturities
716m
C$716m structured deposit note
Speak to an expert

William Kloehn

CEO, North America

E: William.Kloehn@jcraus.com
T: +1 646 640 3619

Our approach

We advised the AESO on the development of a procurement process that involved AUC approval following preferred bidder selection

JCRA participated in the evaluation of the financial bids that led to the selection of the preferred bidder

After AUC approval, JCRA advised the AESO on the debt funding competition that was designed during the preferred bidder selection process

Following the evaluation of the debt funding competition, we advised the AESO on the rate and credit spread setting process leading up to and including financial close

Explore what we do

Benefits of our approach

  • Client was able to resolve a common financing issue that exists when a significant approval is required after preferred bidder nomination and before financial close.
     
  • The AESO was able to obtain a competitive price for its project by adopting a process that is well known to the Canadian marketplace and making refinements to it in order to accommodate unique aspects in Alberta’s regulatory framework. 
  • The introduction of a debt funding competition ensured that any improvements in the financing/capital markets during the regulatory approval stage were adequately considered.
     
  • The project reached financial close in October 2017 with the issuance of C$1,385 million of bonds and a C$716mm structured deposit note.

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