Fort McMurray West 500 kV Transmission Project
Location: West of Edmonton to Fort McMurray, Alberta
Status: In Operation
Provincial/Federal/Municipal: Provincial
Value of Partnership: $1.57 billion (NPV)
Type of P3: DDBFOOM (Develop-Design-Build-Finance-Own-Operate-Maintain)
Financial Close: October 2, 2017
Substantial Completion: March 28, 2019 (Transmission line energized)
Handback: 2054
The Fort McMurray West 500-kV Transmission Project is a landmark in Canada’s infrastructure development, marking the first time a transmission facility advanced through a P3 procurement model.
The transmission corridor, which is home to some of Canada’s largest oil, gas and petrochemical industries, spans roughly 509 kilometres and forms a major north–south backbone within Alberta’s grid. The northern section extends about 95 kilometres between the new Thickwood Hills 951S Substation and the new Livock 939S Substation. From Livock, the line continues approximately 414 kilometres south to the existing Sunnybrook 510S Substation near Edmonton.
The project expanded the range of assets considered suitable for P3 delivery in Canada and introduced new approaches to managing risk, financing and early development responsibilities. The P3 agreement uses a unique financing structure for the Canadian bond market: It was the first broadly marketed bond offering to use a synthetic quarterly-pay amortizing structure and it represented the largest P3 bond offering ($1.385 billion) in Canada to date at the time of its financial close in 2017.
Background
In 2011, the Alberta Electric System Operator (AESO) consulted with stakeholders and reviewed competitive models in other jurisdictions to develop a procurement model for the project that would reduce costs, allocate risks efficiently and bring innovation to Alberta’s transmission system.
AESO considered several possible options but settled on a single-owner model in which the private partner would be responsible for all development activities, engineering, procurement, construction and financing. The private partner would also own, operate and maintain the project for the duration of the agreement and the assets would be handed over to AESO at the end of the contract.
Design and Construction
Project teams advanced a wide range of technical and field activities to prepare the corridor and construct the system. Work included engineering and design, land acquisition, right-of-way preparation and environmental planning across varied terrain.
The final build incorporated 1,368 towers, most of them guyed V-lattice structures, carrying three bundles of four conductor wires. The line required more than 6,000 kilometres of conductor wire, roughly 508 kilometres of overhead shield wire and an equivalent length of fibre-optic cable. Tower construction used approximately 22 million kilograms of steel, reflecting the scale of the corridor and the structural demands of a 500-kV system.
The transmission line is classified as critical infrastructure for Alberta, enhancing system resiliency and meeting long-term demand in the province’s industrial north. The project strengthened relationships with Indigenous communities along the corridor and delivered broad economic benefits during development and construction.
The line was energized March 28, 2019, three months ahead of schedule.
Partners:
Public: Alberta Electric System Operator (AESO)
Private: Alberta PowerLine Limited Partnership (APL)
Awards: National Awards for Innovation & Excellence in P3s' Gold Award in Project Financing, 2018
