EDMONTON, Alberta – Capital Power’s Whitla Wind project was selected by the Alberta Electric System Operator (AESO), in a competition that attracted global participation, as one of three successful proponents in the first round of its Renewable Electricity Program (REP). This was the first of the REP processes that the AESO will undertake to deliver new renewable electricity in support of the Government of Alberta’s 30 per cent renewables target by 2030.
Under its successful bid, Capital Power proposed Whitla Wind, a 201.6 MW wind facility in Southeast Alberta. The Whitla Wind site has capacity for 300 MW that can be developed in two phases, and is located 45 kilometres southwest of Medicine Hat in the County of Forty Mile, Alberta.
“Capital Power is the only Alberta-based company chosen amongst global competitors in a highly competitive process,” said Brian Vaasjo, Capital Power President and CEO. “Whitla Wind advances our disciplined growth strategy and is the first wind project to contribute to our target of delivering two-to-four contracted wind development projects by the end of 2018.”
A Renewable Electricity Support Agreement (RESA) was executed in December 2017 with the AESO that establishes the terms and conditions upon which Capital Power will be entitled to receive support payments for 20 years in exchange for providing the AESO with all renewable attributes generated by the Whitla Wind facility. The support payments for the first round of the REP program were structured as a contract-for-differences, under which successful bidders will receive a guaranteed price subject to performance obligations set out in the RESAs.
The project is expected to provide adjusted EBITDA of $27 million and adjusted funds from operations (AFFO) of $17 million in the first full year of operation. Capital Power expects to finance the project through debt and internally generated cash flow and does not expect to raise common equity. In addition to the projected contribution, the project enables the deferral of cash taxes.
The facility’s target commercial operation date is expected in the fourth quarter of 2019.
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 from joint venture, and gains or losses on disposals (adjusted EBITDA) and (ii) adjusted funds from operations 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 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, these measures are provided to complement GAAP measures in the analysis of the Company’s results of operations from management’s perspective.
Forward-looking information or statements 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: (i) adjusted EBITDA contributions, adjusted funds from operations contributions and the deferral of cash taxes from the Whitla Wind project, (ii) expected financing plans for the Whitla Wind project, and (iii) the anticipated commercial operation date of the Whitla Wind project.
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, 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) anticipated facility performance and operating costs, (ii) effective tax rates, and (iii) timing of construction activities and required regulatory approvals.
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) regulatory and political environments including changes to environmental, financial reporting, market structure and tax legislation, (ii) facility availability and performance including maintenance of equipment, (iii) ability to fund current and future capital and working capital needs, (iv) timing and costs of regulatory approvals and construction, (v) changes in general economic and competitive conditions. See Risks and Risk Management in the Company’s Management’s Discussion and Analysis for the year ended December 31, 2016, prepared as of February 17, 2017, 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 (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 approximately 4,500 megawatts of power generation capacity at 24 facilities and is pursuing contracted generation capacity throughout North America.