Capital Power repositions itself with new wind farm, sold gas plants

Canada-based Capital Power (TSX: CPX) said Feb. 28 that it made several moves in 2013, including the sale of gas-fired generating capacity in New England, as it positions itself for the future.

“Capital Power’s fourth quarter financial results highlighted the strong cash flow that is being produced by the Company’s modern fleet of power generation facilities,” said Brian Vaasjo, President and CEO of Capital Power. “The 105-megawatt Port Dover and Nanticoke wind project in Ontario was added to our fleet when it began commercial operations in the fourth quarter and was the third wind project added to the fleet over the past 16 months. With production largely contracted, these wind projects are contributing to our growing contracted cash flow profile, which is expected to improve further when the Shepard Energy Centre and K2 Wind projects are completed by 2015.”

K2 is a 270-MW wind project (Capital’s share is 90 MW) in the Township of Ashfield-Colborne-Wawanosh in Ontario. K2 Wind Ontario is a limited partnership between Capital Power, Samsung Renewable Energy and Pattern Renewable Holdings Canada ULC.

Vaasjo added: “For the full 2013 year, our financial results benefited from higher Alberta spot power prices that averaged [C]$80 per megawatt hour compared to our forecast assumption of [C]$58 per megawatt hour which enabled us to exceed all our annual financial targets. This included cash flow and normalized earnings per share measures which increased 9% and 31%, respectively, compared with 2012. With Alberta power prices currently forecasted in the mid-[C]$50 per megawatt hour for 2014, we are on track to achieve our funds from operations target for this year.”

In November 2013, Capital Power completed the sale of 100% of its equity interests in the entities that own the three Northeast U.S. combined cycle, natural gas-fired power generation facilities. The sale to Emera Inc. (TSX: EMA) was for proceeds of C$576m (US$549m) less transaction costs of C$8m (US$8m). The facilities are: Bridgeport Energy (520 MW) in Bridgeport, Conn.; Tiverton Power (265 MW) in Tiverton, R.I.; and Rumford Power (265 MW) in Rumford, Maine.

Port Dover and Nanticoke facility begins commercial operations

In November 2013, the Port Dover and Nanticoke wind project in Ontario began commercial operations. The 105-MW wind facility was completed on time and under its C$340m budget, with final construction costs expected to be approximately C$300m. The Port Dover and Nanticoke wind project was awarded a 20-year power purchase agreement with the Ontario Power Authority (OPA),as part of the OPA’s Feed-in-Tariff program. The contracted price for power at commercial operations is C$144 per megawatt hour and thereafter, 20% of the contract price will escalate annually at inflation throughout the 20-year term.

Purchase of interest in Shepard Energy Centre, development of Genesee 4 & 5

The company entered into a series of agreements with ENMAX Corp. to purchase a 50% interest in the 800-MW natural-gas-fuelled Shepard Energy Centre located on the eastern limits of the City of Calgary in Alberta, Canada. Shepard is expected to begin commercial operations in the first quarter of 2015.

In the fourth quarter of 2013, Capital Power and ENMAX announced their letter of intent to pursue joint arrangement agreements to develop, construct, own and operate the Genesee 4 & 5 facility (formerly the Capital Power Energy Centre) in Alberta. This gas-fired, combined-cycle project’s generation capacity will be up to 1,050 MW, and construction will be in two phases with each phase being approximately equal. Each system consists of a gas-fired turbine and generator, a heat recovery steam generator, and a steam turbine and generator. It will be located next to the existing Genesee Generating Station.

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.