Atlantic Power said in a Nov. 7 quarterly financial report that land leases with the U.S. Navy for three gas-fired power plants in the San Diego area expire in February 2018 along with the associated energy sales agreements.
“We have initiated communications with the U.S. Navy to extend the leases through at least the expiration date of the PPAs in December 2019,” the company added.
The three affected plants are:
- Naval Station California, Natural Gas, 47 MW, 100% owned, PPA with San Diego Gas & Electric expires December 2019;
- Naval Training Center California, Natural Gas, 25 MW, 100% owned, PPA with San Diego Gas & Electric expires December 2019; and
- North Island California, Natural Gas, 40 MW, 100% owned, PPA with San Diego Gas & Electric expires December 2019.
In another area of interest, Atlantic Power said that in January 2015 it entered into an agreement with the Ontario Power Authority and its successor, the Ontario Independent Electricity System Operator (IESO) for certain technical modifications to the 40-MW, gas-fired Tunis plant. Tunis will operate under a 15-year agreement with the IESO commencing between November 2017 and June 2019. The new contract will require the plant to become fully dispatchable as opposed to its current baseload configuration. As such, Tunis will provide electricity to the Ontario grid only when required, thereby assisting to reduce the incidents of surplus baseload generation in the market. The new agreement provides the Tunis project with a fixed monthly payment which escalates annually according to a pre-defined formula while allowing it to earn additional energy revenues for those periods during which it is called upon to operate.
Also, in the third quarter of 2016, Atlantic Power recorded full goodwill impairments at its Mamquam, North Bay and Kapuskasing reporting units and a partial goodwill impairment at the Curtis Palmer reporting unit totaling C$78.8 million. Additionally, it recorded long-lived asset impairments at the North Bay and Kapuskasing reporting units totaling C$5.9 million.
Those affected facilities are:
- Mamquam, British Columbia, Hydro 50 MW, 100% owned, PPA with British Columbia Hydro and Power Authority expires September 2027;
- Kapuskasing, Ontario, Natural Gas, 40 MW, 100% owned, PPA with Independent Electricity System Operator expires December 2017;
- North Bay, Ontario, Natural Gas, 40 MW, 100% owned, PPA with Independent Electricity System Operator expires December 2017; and
- Curtis Palmer, New York, Hydro, 60 MW, 100% owned, PPA with Niagara Mohawk Power Corp. basically expires December 2027. The Curtis Palmer PPA expires at the earlier of December 2027 or the provision of 10,000 GWh of generation. From Jan. 6, 1995, through Sept. 30, 2016, the facility has generated 6,899 GWh under its PPA. Based on cumulative generation to date, Atlantic Power expects the PPA to expire prior to December 2027.
Atlantic Power’s current portfolio consists of interests in 23 operational power generation projects across nine states in the United States and two provinces in Canada. Eighteen of its projects are majority-owned subsidiaries.