Long time KPOholder (by no means a jaded stale bull) and like other LTHs, I have absorbedsome KPO history over the years and occasionally some pain. So, for some of thosemore recent to KPO on HC that might be interested, I’m happy to share personal observationsthat might be relevant to Saddle Hills and Canada.
Current key membersof KPO Canada have a history of delivering, in the Canadian “Power Industry”.
For instance,Jeffry Myers (current KPO Non-Exec Dir) and his history with Canadian WestcoastPower, which was formed in the 1990s as a developer, builder, and operator ofelectrical power and cogeneration facilities. In 2002, US based Duke Energy acquiredthe parent, Westcoast Energy for around C$ 8 billion, at that time WestcoastEnergy was also the largest natural gas distributor in Canada. Jeff stayed on in2002 to wind up the Westcoast Power operations in its transition to Duke.
After windingup the Westcoast Power operation, Jeff formed Alberta based Pristine Power(Pristine) in 2003, headed a team that listed Pristine on the TSX andsubsequently sold Pristine for more than C$300 million. As I understand it, someof our current and past key members of KPO, particularly Ross MacLachlan(current KPO MD), got invested in Pristine very early in its formation.
From myrecollection, the YEC project required over two years of development and about anadditional 18 months to reach subsequent milestones - from finalising design,to FNTP, to completing field construction, to commercial operations which commencedin 2012. So, some relevance to the timeline for Saddle Hills.
On achievingFNTP, Pristine obtained funding around mid 2010 from a syndicate offinancial institutions, led by Union Bank, ING Capital LLC and Royal Bank ofCanada, including Bank of Nova Scotia, Siemens Financial Ltd and other institutions. Funding was to provide construction and termnon-recourse debt financing of C$270 million, as well as additional credit andworking capital facilities. IMO a familiar financing approach for Saddle Hills.Note funding from Siemens Financial.
What interestedme most was under the funding and partnership agreement back in 2010, Pristineearned a development fee of C$3 million up front from the project.Then a further C$3 million fee from the project when commercial operations commenced. I understand Pristine's equity contribution for its share of the project totalled C$26 million. Again, a familiar business model to the current approach for Saddle Hills.
Also, itappears the YEC facility was intended, financed and built as a quick-response naturalgas fired peaking generation facility to supplement, not provide, base load capacity. From thepress release in 2012 “The YEC will help address the need for "quickresponse" power generation as identified by the OPA for northern YorkRegion. The facility is able to respond to the need for electricity duringtimes of peak demand and will provide critical grid support.”
As Surandy70indicated in his Post #: 59142288, I have yet to see any basis to suggest an economicdispatch model is too risky for finance. Finance was readily available for the similarYEC peaking generation model.
While pastachievements in general are not necessarily any guarantee of future performance,IMO the knowledge, relationships, relevant experience and history of delivery inthe Canadian “Power Industry” that key KPO members bring, has a very strongbearing on potential for success at Saddle Hills and beyond.
P.S. All info’ is public and verified from releasesby Duke Energy, Pristine Power, CHA Consulting, Frank Lill & Son, Inc., Siemens,Fort Chicago Energy, Veresen, Capital Power, TSX and Canada Company Directory andKPO, to name a few for anyone wanting to do further research.
