EDMONTON – Berkshire Hathaway Energy’s $3.2-billion bid to buy AltaLink, Alberta’s largest electricity transmission company, marks the Warren Buffett-controlled firm’s biggest foray into Alberta — but not the first.
On May 1, Berkshire Hathaway Energy announced its intentions to purchase AltaLink from current owner SNC-Lavalin of Montreal.
The deal, expected to close Dec. 31, needs approval from the Alberta Utilities Commission and federal regulators.
Berkshire Hathaway Energy, 90-per-cent owned by Omaha billionaire Warren Buffett’s Omaha-based Berkshire Hathaway Inc., is headquartered in Des Moines, Iowa. Last year it had operating revenue of $12.6 billion U.S. on total assets of $70 billion U.S.
The transition to new ownership should be “seamless” for AltaLink and its employees, Kelly Groehler, Berkshire Hathaway Energy’s vice-president of communications and public affairs, said in an interview Wednesday.
“We do honour the local autonomy of our businesses and we expect this to be virtually seamless for our employees and the day-to-day operations of AltaLink,” Groehler said.
“Regulation is local, customers are local, assets are local, and the best decisions that get made … Everything starts and ends with the customer and making sure that the service is reliable. You have to have that management taking place at a local level.
“AltaLink will remain a locally managed business. We do not operate or manage the day-to-day activities of our business units. Each has a separate executive team, management, employees, headquarters, assets.”
Groehler noted that Berkshire Hathaway Energy already has a presence in Alberta.
It has partnered with TransAlta Corp. on a proposed 500-kilometre, 500-kilovolt transmission line that would connect Fort McMurray and Wabamun. TransAlta and Berkshire Hathaway Energy are proposing to build an 800-megawatt gas-fired electricity generating plant at Wabamun. And Berkshire Hathaway Energy has an ownership stake in Edmonton firm Metalogic Inspection Services, which provides phased-array ultrasonic testing for industrial settings.
Alberta’s strong, energy-driven economy makes the AltaLink acquisition particularly appealing, Groehler said.
“AltaLink are above their Alberta peers, in particular around safety and reliability, and it’s a really nice alignment with how we like to run our businesses,” she said.
“For us, it’s a great addition to our portfolio. It’s going to generate, we think, solid returns over the long term, and those are returns that will be reinvested locally, and really help support and grow the energy infrastructure in Alberta and Canada. It’s a really nice fit with how we like to operate.”
AltaLink’s headquarters will remain in Calgary and the name won’t change, Groehler said.
AltaLink is a regulated transmission-only business with assets of $5.9 billion as of Dec. 31, 2013. It has 280 substations and 12,000 km of transmission lines which serve three million Albertans — 85 per cent of the population.
