Electric power among new growth platforms for Enbridge

Reporting strong earnings for 3Q12, recently appointed Enbridge (NYSE & TSX:ENB) President and CEO Al Monaco said on a Nov. 7 earnings call that Enbridge is confident it can extend its positive five-year growth outlook through to 2020 given expected contributions from new growth platforms, such as electric power.

“As we approach the end of 2012 with nine-month adjusted earnings of C$922m, or C$1.20 per share, and a strong fourth quarter expected, we remain on track to achieve full year adjusted earnings per share well within our guidance range of C$1.58 to C$1.74,” Monaco said. “With $18bn in corporate-wide commercially secured growth projects today, we expect strong average annual earnings-per-share growth of 10% to 2016.”

Enbridge anticipates bringing online two commercially secured projects in its electricity segment within the next six months, including the north-bound capacity of the 600-MW Montana-Alberta Tie Line (MATL) and the first phase of the 300-MW Lac Alfred Wind Project.

MATL is a 215-mile transmission line proposal that would connect Great Falls, Mont., to Lethbridge, Alberta, and is designed to deliver energy supply from Montana to Alberta demand centers.

Expenditures to date for the project are US$300m, and the total project cost estimate remained at US$400m in 3Q12, the company said.

The first phase of the Lac Alfred Wind Project is scheduled to be placed online in December, and the second phase will follow in December 2013.

Enbridge bought a 50% interest in the development of Lac Alfred, located near Quebec City, in November 2011. Hydro-Quebec will purchase the power from the project and is responsible for the construction of an 18-mile transmission line to connect Lac Alfred to the grid.

Enbridge’s 3Q12 adjusted earnings increased 13% to C$269m, primarily as a result of increased contributions from the company’s significant liquids pipelines segment.

“North America is undergoing a transformation in crude oil and natural gas production, which is driving the need for significant new energy infrastructure,” Monaco said. “Enbridge is in the middle of that transformation and we’re uniquely positioned to benefit from new and emerging opportunities in energy infrastructure development.”

In late October, Enbridge announced an agreement with Enbridge Income Fund (EIF) to transfer a group of crude oil storage, wind power and solar power assets valued at C$1.2bn to the fund. The transfer – subject to approval by the public shareholders of EIF in December – would include the Greenwich Wind Project and the Amherstburg and Tilbury solar projects.

“The Enbridge sponsored investments provide us with a supplementary source of debt and equity funding,” Monaco said. “With this transfer, Enbridge will receive initial net cash proceeds from the transaction of C$222 million and a further C$582 million when the fund raises additional public term debt to refinance a bridge loan provided by Enbridge in connection with this transaction.”