Industry Canada approves AltaLink sale to Berkshire Hathaway Energy
Transaction still needs approval from Alberta Utilities Commission before going through
The federal government has approved the pending sale of an Alberta utility provider to an American company.
Berkshire Hathaway Energy's application to buy AltaLink received approval Friday from Industry Canada. As a result, the American company has agreed to multiple commitments in order to meet the overall economic benefit standards set by the government for foreign investment transactions.
Those commitments include a promise not to reduce the level of employment at AltaLink, to keep the electricity transmission company locally managed with its headquarters in Alberta and to keep a majority of its board of directors Canadians.
For the next five years, Berkshire Hathaway Energy must reinvest 100 per cent of AltaLink's earnings back into the company or elsewhere in Alberta to support AltaLink's three-year, $2.7-billion investment in Alberta's energy infrastructure.
As well, at least $27 million must be reinvested in joint Canada- U.S. development opportunities with Canadian partners over the next five years.
Berkshire Hathaway Energy must invest at least $3 million of new funds over three years to support academic programs focused on energy-related topics, while AltaLink's commitment to provide $3 million over three years in Alberta communities and charitable contributions must be maintained.
Berkshire Hathaway Energy has had to commit to sharing best practices at no cost with AltaLink on safety, customer satisfaction, cybersecurity and supplier diversity and must provide opportunities for Albertan and other Canadian companies to supply products and services to its businesses.
Alberta NDP oppose deal
New Democrat MLA David Eggen came out against the approval Friday afternoon.
He says the deal is not fair to Albertans and argued that the province's transmission system should not be an internationally traded commodity.
"Electricity is an essential service and it should be operated for Albertans, not for a massive profit for a foreign company," Eggen said.
He says the Alberta NDP will continue to oppose the sale.
They will be calling on the Alberta Utilities Commission to hold public hearings on the sale.
Deal worth billions for Quebec-based owner
Despite the concessions, the deal isn't official just yet.
The proposed sale is still under a review from the Alberta Utilities Commission to ensure Albertans aren't negatively affected by the deal.
"Alberta has both a solid investment climate and the regulatory environment to make sure Albertans are looked after, and we need electricity infrastructure to support the continued growth and development currently underway in our province," said Ministers Cal Dallas and Diana McQueen in a joint statement.
The sale of the company from Quebec-based SNC-Lavalin to Warren Buffet's Berkshire Hathaway Energy will cost $3.2 billion.
The deal is expected to close on Dec. 31 and is part of SNC's strategic plan to unlock and create value from its portfolio of infrastructure concession investments.
- An earlier version of this story incorrectly called the American company Berkshire Hathaway. Its name is Berkshire Hathaway Energy.Jul 25, 2014 8:29 PM MT