As RETA has reported earlier, scandal-plagued SNC-Lavalin is selling AltaLink to U.S.-based Berkshire Hathaway Energy – owned by U.S. billionaire Warren Buffett – for $3.2 billion. Is the sale good or bad for Alberta? This is a significant question, considering that AltaLink serves about 85% of Albertans, owns more than one-half of Alberta’s transmission system and operates about 12,000 kilometres of transmission lines and 280 substations.
Anyone who has followed the corruption scandal of Quebec-based SNC-Lavalin, which currently owns 100% of AltaLink, might think the sale should help AltaLink distance itself from the myriad of international investigations and charges against SNC.
To date, about 2 dozen former SNC executives, other senior staff and SNC agents, including former CEO Pierre Duhaime, are being investigated and/or have been charged with a variety of offences including: bribery, fraud, conspiracy to commit fraud, money-laundering, use of forged documents, participating in secret commissions, influencing foreign officials, making illegal political donations, bid-rigging or contract rigging. SNC-Lavalin and/or its former executives or agents are being or have been investigated in many countries, SNC has had contracts cancelled or has been banned from bidding in several countries, SNC has been banned from bidding on any World Bank projects, and SNC has been involved in allegedly questionable business practices in many countries including: Canada (e.g., Alberta, British Columbia, Ontario, Quebec, Newfoundland & Labrador), U.S.A., Trinidad & Tobago, Mexico, Panama, Bahamas, British Virgin Islands, Bangladesh, India, Afghanistan, Kazakhstan, Syria, United Arab Emirates, Libya, Tunisia, Morocco, Algeria, Angola, Democratic Republic of Congo, Ghana, Nigeria, Uganda, Zambia, Malawi, Mozambique and Cambodia. As well, Swiss and French authorities have been investigating SNC. The engineering giant is being or has been sued by many parties including: investors over alleged misrepresentations of SNC’s financial status, former employees for alleged wrongful dismissals, other contractors, and by over 800 homeowners in Quebec.
Not being tarred with the same brush of corruption as its parent company should help improve the image of AltaLink. However, presumably following its sale to Berkshire Hathaway Energy, AltaLink would continue to be included on the World Bank’s no-bid list, along with the majority of SNC’s other subsidiaries. One may argue – “so what” – when would AltaLink ever want to bid on any World Bank funded projects? However, the stigma associated with this ban certainly does not enhance AltaLink’s corporate image.
Perhaps more importantly, and as part of the AltaLink sale, SNC would continue to design, build, and manage construction of AltaLink’s transmission infrastructure – as it does now. In other words, although SNC would no longer own AltaLink, the 2 companies would continue to work very closely together, and SNC would essentially be guaranteed a very long future of lucrative contracts in Alberta. As well, the sale includes a joint transmission project development agreement between SNC-Lavalin and MidAmerican Transmission – a Berkshire Hathaway Energy subsidiary – that guarantees SNC additional significant transmission engineering design and construction contracts in the U.S.
To date, many Alberta individuals have voiced their concerns about AltaLink’s sale to an American corporation, suggesting that a foreign-owned AltaLink could soon start operating in the best interests of the U.S. rather than Alberta. Alberta NDP Leader Brian Mason has called on the provincial PC Government to ask the Alberta Utilities Commission (AUC) to reject the sale, saying, “I don’t believe, fundamentally, that our transmission system in this province should be an internationally traded commodity. All of that will merely serve to ultimately raise the price of our electricity…In private hands, especially foreign hands, where a company is in it to make money, there’s a real risk there won’t be enough invested in maintenance of the existing system, which could lead ultimately to serious problems with the delivery of electricity in the province.”
Many Albertans are concerned that, following the AltaLink sale to a U.S. corporation, the price of electricity transmission in Alberta will increase even more than it has been escalating in recent years. Once AltaLink is controlled by a foreign company, it is possible that neither Albertans nor the AUC would have much to say about how the company is operated or in determining what we get charged for electricity transmission. Furthermore, and as Kurt Kure wrote in this letter to the Red Deer Advocate, “An American-focused company will control the majority of Alberta’s ‘critical infrastructure’ and, in a deregulated market, will sell to the highest bidder. This will drive electricity prices up dramatically within the province when Albertans are competing in an international market for our locally produced power.”
ATCO CEO Nancy Southern has said AltaLink’s critical transmission infrastructure should remain Canadian-owned: “…the fact is that people in Alberta and people in Canada are driven by different motives and our government is driven by different motives than perhaps a foreign entity would be.”
Some individuals upset about the sale are suggesting that Albertans should directly own electricity transmission institutions like in other provinces, so that profits can accrue to the public, rather than to a few transmission giants. The private sector certainly has not been kind to Albertans when it comes to electricity, because we pay among the highest prices in the country.
The Alberta Government has consistently been telling Albertans that none of the massive 500kV lines recently built are for export of electricity to the U.S. This is hard to believe, now that the vast majority of the transmission infrastructure Alberta consumers have paid for will be owned by an American transmission giant. Electricity consumer groups, municipalities, homeowners and landowners raised the export concern repeatedly during AUC hearings for the Heartland, Western Alberta and Eastern Alberta transmission lines. It is now clear that Albertans have been duped by AltaLink, the AUC and the Alberta Government.
In conclusion, we wish to excerpt a quote from Kurt Kure’s letter to the Red Deer Advocate, because we could not say it any better: “I would like to encourage readers to think about the implications of the sale of AltaLink. For us Albertans, $3.24 billion in homegrown growth will leave our economy for Quebec (SNC-Lavalin) and dictators’ pockets unknown and our future electricity costs hang in the balance as we will have to compete on a global market for our own power. Also please consider the ramifications of handing over our ‘critical infrastructure’ to an American company. I can’t see how the people of Alberta would be anything more than an afterthought to those striving towards their primary objective of making money for Warren Buffett.”
Is the sale of AltaLink by Quebec-based SNC-Lavalin to U.S.-based Berkshire Hathaway Energy good or bad for Albertans? You be the judge.
This story is based, in part, on information from: Berkshire Hathaway Energy, Red Deer Advocate, Edmonton Journal 1, Edmonton Journal 2, AltaLink, Edmonton Journal 3, Edmonton Journal 4.