Client: Canadian Utilities Limited Value: US$1.6 billion (approximate) fixed fee (approximate fixed fees payable over 16-year term) and maximum of $330 million incentive fees (approximate incentive fees that can be earned over 16-year term)
On June 22, 2020, after an 18 month RFP process run by The Puerto Rico Public-Private Partnerships Authority ("P3A"), the consortium (the "Consortium") comprised of Canadian Utilities Limited, Quanta Services, Inc. and Innovative Emergency Management ("IEM") was selected as the successful proponent and LUMA Energy, LLC (a Puerto LLC formed jointly by Canadian Utilities Limited and Quanta Services, Inc.) and LUMA Energy ServCo, LLC (a subsidiary of LUMA Energy, LLC) entered into the Operation and Maintenance Agreement ("OMA") with each of the P3A and The Puerto Rico Electric Power Authority ("PREPA") pursuant to which LUMA Energy, LLC and LUMA Energy ServCo, LLC, will, following a transition period and satisfaction of certain conditions precedent, undertake the operation of PREPA's Transmission and Distribution System (the "T&D System") (comprised of approximately 1,113.5 miles of transmission lines (230 kV and 115 kV) and 1,376 miles of sub-transmission lines (38 kV) and 16, 035 miles of primary distribution lines (13.2 kV through 4.16kV), and including 47 transmission centers, 339 sub-transmission substations and 613 privately-owned substations) for a period of 16 years, and assist with the transformation of PREPA's aged and inefficient T&D System into one that is safe, customer-centric, reliable, resilient, sustainable and affordable, including the oversight and management of billions of FEMA and other US federal funds dedicated to the repair and hardening of the T&D System following hurricanes Irma and Maria in the fall of 2017 and the earthquakes of December 2019 and January 2020.
As PREPA is a debtor under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act, the process also involved the Financial Oversight and Management Board for Puerto Rico ("FOMB") and the Puerto Rico Fiscal Agency and Financial Advisory Authority (“AAFAF”).
Bennett Jones LLPserved as Chief Legal Advisor to Canadian Utilities Limited with a team lead by Mark Kortbeek and including Will Osler, Geoff Stenger, Jason Roth, Stephen Burns, Deirdre Sheehan, Chris Simard, Anu Nijhawan, John Gilmore, Simon Foxcroft, Denise Bright, Darrel Pearson, Sabrina Bandali, Margaret Kim, Paul Blundy, Sina Kazemi, Allegra Hessels, Luke Johnson, Jared Mackey, and Tayler Meagher.
Quanta Services, Inc. was represented by its internal counsel (Brett Schrader and Kari Findley) and IEM was represented by internal counsel.
The Consortium was represented by DLA Piper LLP, including a multi-jurisdictional team which included, among others, Francisco Cerezo, Nikos Buxeda, Rachel Albanese, Manuel Lopez-Zambrana, Harriett Lipkin, Sam Knowles, Ryan Vann, Camille Alvarez and Joseline Rodriguez. Covington & Burling LLP also advised the Consortium with a team including Joseph Tato and Brad McCormick.
The P3A was represented by Cleary, Gottlieb, Seen & Hamilton LLP with a team including Richard Cooper, Chantal Kordula, Alejandro Canelas Fernadez, Gabriella Fortun, and Victoria del Rio-Guarner as well as Pietrantoni Mendez & Alvarez LLC as local Puerto Rico counsel to the P3A.
The FOMB was presented by Proskauer Rose LLP with a team including Paul Possinger, Jenifer Jones, and Ehud Barak and Nixon Peabody LLP as tax counsel to the FOMB.