Calgary: Enbridge Inc. announced on August 16 that it had entered into an agreement with Tonbridge Power Inc. for the development of the Montana-Alberta Tie-Line (MATL) power transmission project being developed by Tonbridge. The plans are subject to a number of approvals.
Following the acquisition, Enbridge will inject further funding to complete the first 300 megawatt phase of MATL as well as a low cost expansion to 550-600 MW. The total cost to Enbridge for both phases of MATL is expected to be approximately $300 million, of which approximately half is being funded through a 30-year loan from the Western Area Power Administration of the U.S. Department of Energy.
MATL is a 345-kilometer transmission line from Great Falls, Montana to Lethbridge, Alberta, designed to take advantage of a growing supply of electric power in Montana, including green power production, and the buoyant power demand of Alberta. Required permits for the first phase of MATL have been obtained and the project has secured long-term, take-or-pay contracts for the system’s entire northbound capacity. In addition, Tonbridge also has a 200-kilometer southern extension of MATL, the Green Line, under development.
“The MATL project is the first step in Enbridge’s plans to develop a power transmission growth platform,” said J. Richard Bird, Executive Vice President, Chief Financial Officer and Corporate Development of Enbridge. “Power transmission fits well with Enbridge’s overall energy infrastructure value proposition, typically involving long-lived assets with stable cash flows and earnings. The transmission industry growth fundamentals are strong, with significant North America wide investment required to replace aging infrastructure, address grid bottlenecks and tie renewable power projects to more distant markets. The local fundamentals of the MATL project are particularly strong and meet the criteria we established for our initial entry point investment.”
Enbridge’s announcement included a number of qualifications that should be reviewed by anyone with direct financial interest in any aspect of the plans.