EDMONTON, Alberta – Capital Power Corporation (TSX: CPX) (“Capital Power” or “the Company”) announced today that it has completed the second tranche payment of approximately $325 million to ENMAX Corporation (“ENMAX”) for the remaining 25% ownership interest in the Shepard Energy Centre (“Shepard”) and now holds a 50% ownership interest in Shepard. Capital Power initially paid $237 million for the first tranche payment in February 2013 when it acquired a 25% interest in the Shepard facility.
“By using our existing credit facilities to finance the second tranche payment ahead of its due date in the first quarter of 2014, we will realize interest cost savings on the Shepard project,” said Stuart Lee, Senior Vice-President and Chief Financial Officer for Capital Power. “The interest rate on our credit facilities is lower than the interest rate stipulated in the contract during the construction phase.”
“Last month, we announced an agreement with Emera Inc. on the sale of our New England assets for US$541 million. We plan on repaying the amount drawn on the credit facility from the proceeds of the asset sale transaction, which is expected to close in the fourth quarter of 2013,” said Mr. Lee.
Capital Power and ENMAX have a joint venture agreement to build, own and operate the 800 megawatt Shepard facility, which is currently under construction and expected to begin commercial operations in early 2015. Shepard will be a natural gas combined cycle facility located on the southeast edge of Calgary, Alberta.
Forward-looking information or statements included in this press release 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 press 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 in this press release includes information with respect to: (i) expectations regarding realizing interest cost savings on the Shepard project; (ii) expectations regarding the use of sale proceeds from the sale of the New England assets; (iii) expectations regarding the closing date for the sale of the New England assets; and (iv) expectations regarding the commercial operations date for Shepard facility.
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 and impact of policy, legislation and regulation, and (v) effective tax rates.
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 commodity prices in markets in which the Company operates 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, 2012 annual Management’s Discussion and Analysis for further discussion of these and other risks.
About Capital Power
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 3,600 megawatts of power generation capacity at 16 facilities across North America. An additional 595 megawatts of owned generation capacity is under construction or in advanced development in Alberta and Ontario.