Published On: Friday, 21 December 2018
Sale of Northwest BC Hydro Facilities to Result in Further Ownership Opportunities for Tahltan Nation
TAHLTAN NATION - In 2010, AltaGas Ltd. partnered with BC Hydro and the Tahltan Nation on the development of the Northwest British Columbia Hydro Electric Facilities, comprising three run-of-the-river projects: Forrest Kerr, McLymont Creek and Volcano Creek.
The Facilities power the Northwest Transmission Line and resulted in three robust Impact Benefit Agreements between AltaGas and the Tahltan Nation, as well as Revenue-Sharing Agreements between the Tahltan Nation and the Province.
The Tahtlan Nation originally became equity owners in one of the Facilities in late 2014 when a limited partnership formed by the Tahltan Nation called Volcano Creek Limited Partnership purchased a 2.7 per cent interest in the Volcano Creek facility for $2 million ($1.5 million was provided by the Tahltan Heritage Trust as a loan and $500,000 was provided by the BC Clean Energy Fund).
This original equity position made the Tahltan Nation a limited partner in the Facilities, which created a legal requirement for the Tahltan Nation to consent to any future transaction that would result in AltaGas selling any of its interest in the Facilities to a third party.
In June 2018, AltaGas sold 35% of its interest in the Facilities to a joint venture company indirectly owned by Axium Infrastructure Canada II LP. and Manulife Financial Corporation for $922 million.
In October 2018, AltaGas transferred a 10 per cent interest in the Facilities to a newly formed subsidiary, AltaGas Canadian Energy Holdings Limited Partnership, a wholly-owned subsidiary of AltaGas Canada Inc., which completed an initial public offering of its shares on October 25, 2018. Following the initial public offering, AltaGas holds a minority interest in AltaGas Canada Inc. which will operate independently from AltaGas.
Following the initial public offering for AltaGas Canada Inc., AltaGas advised the Tahltan Nation that it wished to sell its remaining 55 per cent interest to Axium/Manulife which would require the consent of the Tahltan Nation, and negotiations between the parties ensued.
On December 12, 2018, the Tahltan Nation reached an agreement with AltaGas on the proposed sale of its remaining 55 per cent interest in the Facilities to Axium/Manulife.