Fortis Inc.,the Canadian utility owner that is buying ITCHoldings Corp. for US$11.3 billion, indicated it might be willing tohelp the government of its home province of Newfoundland and Labrador sort out atroubled hydroelectric project.
Province-owned NalcorEnergy Corp. replaced CEO Ed Martin with former Fortis head Stan Marshallin late April amid cost overruns and delays at the C$8 billion Muskrat Falls project. Marshall spent 35 years atFortis before retiring. While St. John's, Newfoundland-headquartered Fortis ownsutilities across North America, CEO Barry Perry said the company would like to growits business at home.
"It goes to show the amazing talent we have at Fortis theyare even bringing back our retirees to help at this point in time," Perry quippedon the company's May 3 earnings call."Listen, we are based in St. John's, Newfoundland, and I have always been veryopen to putting more capital to work in the province. I'd like to do that, frankly.I'm not saying Muskrat Falls or anything. We would like to have a bigger role inthis province and we're working hard to make that happen."
A transmission link from the 824-MW Muskrat Falls project onthe Lower Churchill River in Labrador to the island of Newfoundland and on to NovaScotia, and potentially, the U.S. Northeast, is being built in part by Fortis rivalEmera Inc., which is locatedin Halifax, Nova Scotia. Speaking to reporters after being named head of Nalcor,Marshall said the contractto build the transmission lines "looks to be very much in the benefit of NovaScotia."
Fortis was formed as the parent company of Newfoundland Power Inc. in 1987 and has since bought utilitiesacross Canada and the U.S., including Arizona and New York. Perry said the companywould be open to playing a bigger role in infrastructure development across theprovince.
"Absolutely," Perry said. "We are doing this allacross North America and we should be able to do it in our home province."
Fortis and ITC filed for FERC approval of their merger April 28. Perry said his companyis not concerned that owning FERC-regulated ITC's assets might limit its abilityto acquire other U.S. utilities in areas where ITC operates.
"We are very focused on maintaining ITC's independence,but it [FERC limitations] doesn't bother me," Perry said. "I am happyto have ITC. If I was to pick the jewel, then I got the jewel. There are other jurisdictionsdown the road that transactions could work in. I am not concerned about the factthat someone might perceive that I have just limited the next opportunities forFortis. We really got the utility we were looking to get and we still see, longerterm, other opportunities around North America."