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January 27, 2014

$1.6 billion Alberta electrical transmission line opening to bids

The Alberta Electric System Operator (AESO) has undertaken a competitive procurement process for the first time to select five companies to bid on a $1.6 billion contract for the construction of a transmission line.

“Alberta is leading the way across North America to inject competitive pressures into the transmission system and to see so many world-class companies from across the globe looking to invest in Alberta is a testament to the success of the competition to date,” said David Erickson, AESO president and CEO.

AESO announced it has received bids from companies around the world, including Asia, Europe, South America and North America, for the Fort McMurray West 500 kV Transmission Project. The contract is an opportunity to build, finance, own and operate a transmission line from Wabamun to Fort McMurray for 35 years.

The project will be the first in Alberta to use the competitive process for this type of project.

It is designed to put downward pressure on transmission costs and provide competitively priced power.

The five companies selected by AESO to enter the Request for Proposals (RFP) stage are:

Alberta PowerLine, which is owned by Canadian Utilities Limited and Quanta Capital Solutions Inc. Valard Construction LP would undertake design and construction work and ATCO Electric Ltd. would be responsible for operating and maintaining the transmission facilities.

The second company is Athabasca Transmission, which is owned by AltaLink LP and AEP Transmission Holding Company LLC.

Burns and McDonnell Canada Ltd. and SNC Lavalin T&D would design and construct the facilities while AltaLink LP and AEP Transmission Holding Company LLC would be responsible for ongoing operations and maintenance.

NorSpan Partners LP is next. It is owned by EPCOR Utilities Inc. and LS Power Associates LP.

Kiewit Energy Canada Corp. and Sargent & Lundy LLC would undertake design and construction work, while EPCOR Utilities Inc. would be responsible for operating and maintaining the transmission facilities.

The fourth company selected is TAMA Transmission LP, which is owned by MidAmerican Energy Holdings Company and TransAlta.

MidAmerican Energy Holdings Company would undertake design and construction work while TAMA Transmission would be responsible for ongoing operations and maintenance.

The final company is TransCanada/Elecnor, which is owned by TransCanada PipeLines Limited and Elecnor S.A.

Elecnor would be responsible for the design and construction of the facilities, while TransCanada PipeLines Limited would be responsible for operating and maintaining the transmission facilities.

In the RFP stage, the qualified company, who can undertake the project at the lowest life-cycle cost will be identified and selected.

About 30 organizations showed an interest in the Request for Qualifications (RFQ) stage of the procurement process, which was completed in December 2013.

In order to identify and select five companies, AESO said it carried out analysis that was based on technical, financial and route development expertise.

The AESO was mandated by the Alberta government to develop a competitive process and have it approved by the Alberta Utilities Commission.

It received approval from the provincial electricity regulator on Feb. 14, 2013 and will select a winning company in December 2014.

The $1.6 billion project involves the construction of a 500 kV AC single circuit transmission line, which will span the distance from a new 500 kV substation in the Fort McMurray area to an existing substation at the Genesee generating station near Edmonton.

A preferred and an alternate route will be proposed by the successful proponent, but final route determination will be the subject of approval from the commission.

The AESO expects a winning proponent to be named by the end of 2014.

Construction is scheduled for completion in 2019.

The concentration of large industrial customers in the Fort McMurray area has pushed the current capacity of the transmission system to handle load and generation to its limit.

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