EDMONTON, Alberta – Capital Power Corporation (TSX: CPX) (Capital Power) provides initial response to BC Hydro’s draft Integrated Resource Plan (IRP) submitted to the British Columbia Utilities Commission (BCUC) today.
The draft IRP references two natural gas-fired independent power facilities, including Capital Power’s Island Generation facility at Campbell River on Vancouver Island, for which BC Hydro is not currently intending to renew the long-term Electricity Purchase Agreement (EPA) expiring in April 2022 as set out in the excerpt below:
The 275 MW Island Generation facility (located in the South Coast region) operates as a dispatchable facility based on system requirements and market conditions. Generally, we operate the facility on an infrequent basis in favour of other lower cost resources, which means that its greenhouse gas emissions are typically lower than a project like McMahon, about 10,000 tonnes of CO2e per year. The electricity purchase agreement with Island Generation expires in fiscal 2023.
While we have had discussions with the Island Generation counterparty to understand potential terms of a renewal, there is no basis, at this time, to assume that the electricity purchase agreement with this facility will be renewed. Accordingly, Island Generation is not assumed to be in operation in the applicable Load Resource Balances after fiscal 2023, and its renewal is not contemplated in the Base Resource Plan.
“We continue to believe the Island Generation facility is needed to ensure secure and reliable electricity supply for homes and businesses on Vancouver Island and in Metro Vancouver and will actively participate in the consultation process,” said Chris Kopecky, Senior Vice President and Chief Legal, Development & Commercial Officer of Capital Power. “The facility has been extremely reliable for BC Hydro with a 99% average availability in the last five years, providing critical back-up power and grid reliability for Vancouver Island and Metro Vancouver over the past decade under Capital Power after it was acquired in 2010.”
The renewal status of the contract does not impact on 2021 results and based on Capital Power’s current recontracting assumptions, the contract not being renewed is not material to Management’s future cash flow expectations.
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 disclosure regarding future cash flow expectations.
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 this forward-looking statement relate largely to electricity, other energy and carbon prices, facility performance and future demand for output from the Island Generation facility. Whether actual results will conform to the Company’s expectations and predictions is subject to changes in electricity, natural gas and carbon prices, regulatory and political environments, facility availability and changes in general economic and competitive conditions. 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 6,400 megawatts (MW) of power generation capacity at 26 facilities across North America. Projects in advanced development include 425 MW of owned renewable generation capacity in North Carolina and Alberta and 560 MW of incremental natural gas combined cycle capacity, from the repowering of Genesee 1 and 2 in Alberta.