Altalink L.P.

Overview Key strengths Key risks A relatively low-risk electricity transmission company. Geographic and regulatory diversity limited to Alberta, Canada. It is not exposed to volumetric, counterparty, or commodity price risk, limiting cash flow volatility. Rising physical risk in the service territory A mostly supportive regulatory framework in Alberta. Negative discretionary cash flow indicates external funding needs. The commission maintained the 37% equity layer, which is well below the industry average, and approved a formula-based method for calculating the return on equity (ROE). The formula is based on a 9% ROE adjusted for changes to the 30-year Government of Canada bond yield and the 'A'-rated Canadian utility bond yield. Based on the formula, the 2024 ROE was set at 9.28%, an

...In October 2023, the Alberta Utilities Commission (AUC) announced the decision for the generic cost of capital proceeding. The commission maintained the 37% equity layer, which is well below the industry average, and approved a formula-based method for calculating the return on equity (ROE). The formula is based on a 9% ROE adjusted for changes to the 30-year Government of Canada bond yield and the 'A'-rated Canadian utility bond yield. Based on the formula, the 2024 ROE was set at 9.28%, an improvement from the previously approved 8.5% ROE. While the formula rate provides for a standardized approach for determining the ROE, we...

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