EDMONTON, ALBERTA — (Marketwired) — 12/04/14 — Capital Power Corporation (TSX: CPX) (“Capital Power” or “the Company”) today announced a number of positive corporate developments, which will be highlighted at its Investor Day event later today in Toronto. The Company also provided financial and other targets for 2015.
Construction expected to commence on the Genesee 4&5 project
Capital Power and ENMAX Corporation (ENMAX), joint venture partners on the proposed Genesee 4&5 facility (the project), provided an update on the development process for the project. The project was granted approval by the Alberta Utilities Commission in August 2014. Pending a successful outcome of Alberta Environment and Sustainable Resource Development (ESRD) review including the Environmental Protection and Enhancement Act (EPEA) approval and a water license amendment, which are expected by the end of this year, the project will proceed to the construction phase. Capital Power–s Board of Directors has approved the project.
“With this project and the Shepard Energy Centre, Capital Power and ENMAX will jointly own two of the largest and most efficient generating facilities in Alberta,” said Brian Vaasjo, President and CEO of Capital Power. “With the attractive economics of Genesee 4&5, it is best-positioned to be the next large natural gas-fired generation project to be built in the province and we expect to begin construction with shovels in the ground in mid-2015.”
The proposed Genesee 4&5 power project will utilize the latest state-of-the-art high efficiency combined cycle natural gas turbine technology and will have a generation capacity of approximately 1,060 megawatts. Agreements for the supply and maintenance of two one-on-one, single shaft power islands, each incorporating a natural gas turbine, steam turbine, generator and heat recovery steam generator are being finalized and are expected to be in place by the end of 2014.
The facility will be built at Capital Power–s existing Genesee Generating Station located west of Edmonton, Alberta. The Genesee site has significant cost advantages. It is ideal for Alberta–s next large scale generating facility because it will utilize the existing water intake/discharge structures and the existing transmission interconnection, which will connect to the new 500kV DC line and is within 500 metres of the project. There will also be operations savings from synergies with existing generation units at the site.
Pending all regulatory approvals, construction of the project will begin in mid-2015 with a targeted completion date as early as late 2018. This will coincide with the need for additional generation to meet growing demand and to replace generation from the retirement of some existing coal generating units in Alberta. Capital Power will lead the construction of the project and will be the operator of the facility.
Acquisition of significant development sites
In November 2014, Capital Power signed a Purchase and Sale Agreement to acquire Element Power US, LLC (Element Power) for approximately US$69 million including US$52 million in assumed project financing debt. The acquisition of Element Power provides Capital Power with a portfolio of attractive wind and solar energy development sites in the United States.
The development sites consist of 10 wind sites and 4 solar sites including a North Carolina site with a 15 MW solar contract with Duke Energy Progress, Inc. The acquisition also includes Macho Springs, a 50 MW wind project in New Mexico that has been operating since 2011 under a 20-year power purchase arrangement with Tucson Electric Power. The transaction is expected to close prior to year-end, 2014 and is subject to FERC approval for the transfer of Macho Springs.
Outlook for 2015
At its Investor Day, the Company will review its corporate priorities and financial targets for 2015 including:
Investor Day event and webcast information
Capital Power–s Investor Day event is being held today at the St. Andrew–s Club and Conference Centre (150 King Street West, 16th floor). Registration starts at 9:30 a.m. ET followed by executive presentations beginning at 10:00 a.m. ET. A live audio webcast of the event is available on the Company–s website at . The presentation slides and webcast will be archived and accessible for replay.
About Capital Power Corporation
Capital Power (TSX: CPX) 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 2,600 megawatts of power generation capacity at 14 facilities across North America and owns 371 megawatts of capacity through a power purchase agreement. An additional 490 megawatts of owned generation capacity is under construction in Alberta and Ontario.
Non-GAAP Financial Measures
The Company uses (i) funds from operations as a financial performance measure. This term is not a defined financial measure according to generally accepted accounting principles (GAAP) and do not have standardized meaning prescribed by GAAP and are therefore, unlikely to be comparable to similar measures used by other enterprises. This measure should not be considered alternatives to net income, net income attributable to Shareholders of the Company, net cash flows from operating activities or other measures of financial performance calculated in accordance with GAAP. Rather, this measure is provided to complement GAAP measures in the analysis of the Company–s results of operations from management–s perspective.
Forward-looking Information
Certain information in this news release is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial and operating performance, events or strategies. The forward-looking information or statements are provided to inform the Company–s shareholders and potential investors about management–s assessment of Capital Power–s future plans and operations. This information may not be appropriate for other purposes. The forward-looking information in this news release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes. Material forward-looking information includes, among other things, information relating to: (i) expectations regarding the Genesee 4&5 project moving from the development phase to construction phase and the timing and provisions thereof; (ii) expectations regarding the timing of, funding of, permitting of, costs for, capacity of and technology selected for existing and planned development projects, completed development projects, and acquisitions; (iii) expectations regarding plant availability and planned outages; (iv) expectations regarding future Alberta power prices; (v) expectations regarding Capital Power–s sources of funding and the financing of existing and planned development projects; and (vi) expectations regarding future plant maintenance capital and sustaining capital expenditures, operating and maintenance expenses and funds from operations.
These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements relate to: (i) electricity and other energy prices, (ii) performance, (iii) business prospects and opportunities including expected growth and capital projects, (iv) status of and impact of policy, legislation and regulations, (v) effective tax rates, and (vi) other matters discussed under the Performance Overview and Outlook sections in the Management–s Discussion and Analysis (MD&A) for the third quarter, 2014.
Whether actual results, performance or achievements will conform to the Company–s expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company–s expectations. Such material risks and uncertainties are: (i) changes in electricity prices in markets in which the Company operates, (ii) changes in energy commodity market prices and use of derivatives, (iii) regulatory and political environments including changes to environmental, financial reporting and tax legislation, (iv) power plant availability and performance including maintenance expenditures, (v) ability to fund current and future capital and working capital needs, (vi) acquisitions and developments including timing and costs of regulatory approvals and construction, (vii) changes in market prices and availability of fuel, and (viii) changes in general economic and competitive conditions. See Risks and Risk Management in the Company–s December 31, 2013 annual MD&A for further discussion of these and other risks.
Contacts:
Media Relations:
Michael Sheehan
(780) 392-5222
Investor Relations:
Randy Mah
(780) 392-5305 or (866) 896-4636 (toll-free)