Capital Power advances 300-MW Whitla Wind project in Alberta

At its annual Investor Day event on Dec. 15 in Toronto, Capital Power Corp. (TSX: CPX) is providing financial and operational targets for 2017, highlighting corporate developments, and affirming its dividend growth guidance to 2018.

“Capital Power’s strong operational performance and contracted cash flows will fund increased dividends and execution of the Company’s disciplined growth strategy,” said Brian Vaasjo, President and CEO of Capital Power. “The entry into service of our Bloom Wind project will add to our contracted cash flows in 2017, and the commencement of coal compensation payments will further strengthen our financial position.”

He added: “Based on Capital Power’s projected cash flows over the next two years, which include the initial coal compensation payments from the Alberta government, the Company is well positioned to add to its fleet of contracted power generation assets across North America and deliver on its 7% annual dividend growth guidance through 2018. We continue to advance our development sites and contracted growth opportunities in Canada and the United States.

“Capital Power has the people, the assets and the expertise to succeed in Alberta’s evolving power market, and to expand our contracted generation footprint outside Alberta,” said Vaasjo. “The Alberta government has committed to implement a capacity market for electricity in a way that treats existing investments fairly, and promotes a level playing field between existing and new generation. We are actively participating in consultations on market design, and pursuing renewable and thermal development opportunities that will be competitive in the Alberta market. The Genesee 4/5 project remains well-positioned to supply Alberta’s future electricity needs, and today we are announcing commercial agreements that will advance our proposed Whitla wind project in southeastern Alberta.”

Highlights include:

  • Capital Power has signed agreements that will advance the development of the Whitla Wind project in the County of Forty Mile, located southwest of Medicine Hat, Alberta. Capital Power controls the site and will be the developer for the proposed 300-MW project, which is expected to be completed in two 150-MW phases. The agreement provides for seven years of wind measurement data that will be used in Whitla Wind’s development. The first phase is planned to be bid into the Alberta Electricity System Operator‘s (AESO) first competition under their Renewable Electricity Program. AESO’s first competition is expected in early 2017, and will procure up to 400 MW of renewable generation to enter into operation in 2019. Whitla Wind could be further expanded, with additional phases possible through asset acquisition or additional greenfield development of nearby lands.
  • As announced on Nov. 24, 2016, Capital Power will receive cash payments from the Government of Alberta of C$52.4 million annually for 14 years, commencing July 31, 2017, as compensation for the capital that the company invested in coal generating assets that will be “stranded” effective Dec. 31, 2030. A copy of the agreement with the province filed Nov. 25 wiith Canadian regulators said its applies to  Genesee 1, Genesee 2, Genesee 3 and Keephills 3. The agreement says: “The Company and each of the Plant Owners covenant and agree that each will ensure that the Plants cease Coal-Fired Emissions on or before December 31, 2030. It is understood and agreed that in respect of any Plant where the Company or a Plant Owner holds less than a 100% interest in the applicable Plant, this covenant applies only to the extent of electricity production owned, controlled and dispatched by the applicable Plant Owner from that Plant. For greater certainty, nothing in this Agreement shall prevent or restrict any Plant from generating electricity at any time by any method other than by the combustion of coal.”

 As for financial targets for 2017 for Capital Power, they include:

  • A capacity-weighted average plant availability of 95%, reflecting planned outages at Genesee 1 and Keephills 3,
  • Plant maintenance capital and sustaining capital expenditures of up to C$85 million, and plant operating and maintenance expenses of C$195 million to C$215 million,
  • Adjusted funds from operations (AFFO) of C$305 million to C$345 million, based on 100% of the Alberta commercial portfolio position hedged at an average contracted price in the mid-C$40 per megawatt hour,

Capital Power is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns more than 3,200 megawatts of power generation capacity at 18 facilities across North America. More than 700 megawatts of owned generation capacity are in advanced development in Alberta and under construction in Kansas.

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.