Maxim Power eyes gas, wind development projects in Canada

Canada’s Maxim Power Corp. (TSX: MXG) said Aug. 8 in an earnings report that while it has a tentative deal to sell its U.S. power plants, it is moving forward with gas and wind power projects in Alberta, Canada.

During the fourth quarter of 2012, MAXIM appointed financial advisors to its investments in the United States and France in order to identify options to maximize shareholder value. Credit Suisse Securities (USA) LLC has been engaged as financial advisor with respect to MAXIM’s investments in the United States and HSBC Bank plc has been engaged as financial advisor with respect to MAXIM’s investments in France.

MAXIM announced Aug. 6 that it had entered into an agreement to sell 100% of its ownership interest in the U.S. operations to Patriot Power Holdings LLC, an affiliate of Rockland Capital for US$112m, including the assumption of US$22m of debt resulting in sales proceeds of US$90m. The evaluation of the France initiative is ongoing with no expectation of outcome at this time.

MAXIM’s Canadian development projects include:

  • Deerland Peaking Station (D1) – MAXIM is actively pursuing commercial arrangements that will allow for the construction of the 190-MW D1 Station to commence during 2013. The D1 site is located near Bruderheim in Alberta’s Industrial Heartland adjacent to the existing Deerland high voltage substation. D1 has received all regulatory approvals and MAXIM said it has entered into an agreement to secure firm natural gas transportation services. At this point, D1 is the only permitted peaking development project in the province of Alberta. “D1 is an attractive project as Alberta is experiencing tighter supply demand fundamentals and increasingly volatile electricity prices,” the company said. “Demand for electricity is increasing, base load supply is expected to contract through retirement of coal-fired units and wind power is intermittent. MAXIM expects that peaking requirements across Alberta will continue to grow as a result of these market drivers.”
  • Milner Expansion (M2) – The Alberta Utilities Commission (AUC) has granted MAXIM approval to develop a 500 MW generating facility adjacent to the existing, coal-fired 150-MW Milner generating facility (M1). M2 was originally supposed to be coal-fired, but at 2012 Canadian federal greenhouse gas policy has forced MAXIM to look at this as a gas-fired plant. All aspects are presently being studied to determine the most attractive option for shareholders.
  • Buffalo Atlee (B1) – MAXIM’s B1 Power Project, situated near Brooks, Alberta, has the potential for development of over 200 MW of wind capacity. Wind data has been collected on the site for about five years. MAXIM holds an exploratory Crown land permit with a term of five years, expiring on Jan. 1, 2016. The addition of wind to MAXIM’s existing portfolio of assets will diversify MAXIM’s generation fuel types and provide the potential to offset the impact of any new greenhouse gas legislation.

Based in Calgary, Alberta, MAXIM is an independent power producer, which acquires or develops, owns and operates innovative and environmentally responsible power and power related projects. MAXIM currently owns and operates 41 power plants in western Canada, the U.S. and France, having 804 MW of capacity.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.