How do you know you’re getting
the right price for your REA?
ATCO Electric’s offer of $66,083,158 ($20,742 per member site) for Peace Country REA’s electric
distribution system was determined by using a formula previously approved by the Alberta Utilities
Commission – Reproduction Cost New minus Depreciation (RCN-D). ATCO Electric uses this formula to
determine the purchase price of all REAs who request a purchase proposal.
The RCN-D formula calculates what it would cost ATCO Electric to build the Peace Country REA electric
distribution system all over again (RCN) and then takes into account the age of the existing system (D).
While construction standards and costs for materials and labour may increase every year (increasing the
RCN component of the formula), so does the age of the existing system (the D component). As the electrical
system ages, its value depreciates. The only way to offset this is to invest significant dollars to repair or
replace aging assets.
Peace Country REA Electric Distribution System Assets
In 2011 when the Peace Country REA board of directors first asked ATCO Electric for a purchase price,
a thorough review of the REA’s electrical distribution system assets was completed to ensure that a fair and
accurate price was determined. These assets* include:
Distribution Lines (Mainline)
Kilometres
Additional Assets
Quantity
14.4 kV Overhead
2,502
Farm Taps including Transformers
3,186
14.4 kV / 24.9 kV Underground
7
Auto Boosters and Regulators
17
24.9 kV Overhead
45
Single Phase Reclosers
85
Double Circuit
74
Total
*As of March 2012
2,628 kms
ATCO Electric will not be purchasing any buildings, lands or short and long-term investments owned by the
REA. The REA board will be responsible for appropriately handling and managing these assets and winding
down the affairs of the REA after the sale and transfer of assets is complete.
ATCO Electric’s purchase price also includes easements and related land and access rights on existing
lines, presently owned by or otherwise permitted to be used by Peace Country REA. These easements
allow ATCO Electric to keep existing lines where they are today and allow us to access them for regular
maintenance and service and during an outage. These easements DO NOT allow ATCO Electric to build
power lines anywhere on your land.
ATCO Electric normally builds new facilities on road allowances. If, for any reason, a power line is required
on private land, ATCO Electric will negotiate new easements or other surface rights with the affected land
owners or other persons as necessary.