EDMONTON, Alberta – Capital Power Corporation (Capital Power or the Company) (TSX: CPX) provided the following update for its operations following the recent extreme weather event through the central United States.
From February 9th to February 20th, the extreme winter weather caused some disruptions to our wind facilities in Texas (Buckthorn Wind) and Kansas (Bloom Wind) with essentially no impact on the balance of Capital Power’s U.S. operations. The two wind facilities experienced no significant physical damage, but some turbines were forced offline. As of February 22nd, the operations were back to normal.
Capital Power continues to evaluate the financial impact under the offtake arrangements and is reviewing force majeure and other mitigating possibilities. During the peak days of the weather event, the Company was able to leverage its commodity management expertise to physically flow power around North America to help offset any potential financial impacts. Based on current information, Capital Power estimates the impact of the production loss to be approximately US$8 million partially offset by commodity gains of US$6 million for a net loss of approximately CAD$3 million to adjusted EBITDA and adjusted funds from operations (AFFO).
Capital Power believes that the event will not have any material impact on the Company’s 2021 financial guidance of $500 million to $550 million for AFFO and $975 million to $1,025 million for adjusted EBITDA.
Non-GAAP Financial Measures
The Company uses (i) earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from joint venture interests, gains or losses on disposals and unrealized changes in fair value of commodity derivatives and emission credits (adjusted EBITDA) and (ii) AFFO as financial performance measures.
These terms are not defined financial measures according to GAAP and do not have standardized meanings prescribed by GAAP and, therefore, are unlikely to be comparable to similar measures used by other enterprises. These measures should not be considered alternatives to net income, net cash flows from operating activities or other measures of financial performance calculated in accordance with GAAP. Rather, these measures are provided to complement GAAP measures in the analysis of the Company’s results of operations from management’s perspective.
Additional disclosure around the Company’s non-GAAP financial measures, including reconciliations of these non-GAAP financial measures to their nearest GAAP financial measures are disclosed in the Business Report section of the Company’s Integrated Annual Report, prepared as of February 18, 2021 for the year ended December 31, 2020, which is available under the Company’s profile on SEDAR at SEDAR.com and on the Company’s website at capitalpower.com.
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 disclosures regarding the expected adjusted EBITDA and AFFO impacts of the recent extreme weather event in central United States, including the expected non-material impact on the Company’s 2021 financial guidance.
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 other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements relate largely to electricity pricing. Whether actual results will conform to the Company’s expectations and predictions is subject to revisions to electricity pricing during the applicable periods of extreme weather as well as the success and impacts of potential mitigating actions, which could cause actual results to differ materially from the Company’s expectations. See Risks and Risk Management in the Business Report section of the Company’s Integrated Annual report for the year ended December 31, 2020, prepared as of February 18, 2021, for further discussion of these and other risks.
Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the specified approval date. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
About Capital Power
Capital Power is a growth-oriented North American wholesale power producer with a strategic focus on sustainable energy headquartered in Edmonton, Alberta. We build, own and operate high-quality, utility-scale generation facilities that include renewables and thermal. We have also made significant investments in carbon capture and utilization to reduce carbon impacts and are committed to be off coal in 2023. Capital Power owns over 6,500 megawatts (MW) of power generation capacity at 28 facilities across North America with approximately 425 MW of owned renewable generation capacity and 560 MW of incremental natural gas combined cycle capacity, from the repowering of Genesee 1 and 2, in advanced development in Alberta and North Carolina.