Public Utilities Act – Debt Issuance
AltaLink Management Ltd. (“AML”), in its capacity as general partner of AltaLink, L.P. (“ALP”), filed an application requesting approval to cause ALP to make one or more issues of senior secured notes or other debt securities in the aggregate principal amount of up to C$500 million on or before December 31, 2023, and pledge assets as security to such issuances.
AML submitted that continuing to fund long-lived assets with long-term debt securities that diversify the maturity profile of such securities over the expected life of such assets is in the best interests of the ratepayers.
AML is a designated owner of a public utility under the Public Utilities Designation Regulation and is subject to s 101 of the Public Utilities Act (“PUA”), which section requires AUC approval for debt issuance and encumbering property.
S 101(2)(a)(ii) of the PUA requires that the AUC determine whether: (i) the proposed issuance is to be made in accordance with law; and (ii) the AUC is satisfied regarding the purposes of the proposed debt issuance described in the application.
Based on the opinion provided by AML’s legal counsel, the AUC was satisfied that due diligence was being exercised and steps had been taken to ensure that the issuance will be made in accordance with law. The AUC was also satisfied with the level of detail provided in the application to support the purposes of the issuance and accepted AML’s submitted purposes of the debt securities issuance. The AUC found the credit rating-related information provided by AML satisfactory, which provided reasonable assurance that the proposed issuance of the debt securities should not have a material adverse effect on the cost of other debt recovered through AML’s revenue requirement.