Atlantic Power Corporation issued the following announcement on June 3.
Atlantic Power Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") provides the following update on the Power Purchase Agreements (PPAs) for its Calstock and Oxnard plants:
Calstock is an approximately 35 megawatt biomass plant located in Hearst, Ontario. The PPA with the Ontario Electricity Financial Corporation, which had been scheduled to expire in June 2020, was recently extended to December 16, 2020 on existing terms. The extension provides the provincial government additional time to evaluate the future role of the Calstock plant and biomass generation in the province. The Company expects Project Adjusted EBITDA from Calstock in the July through December period will be lower than the comparable period in 2019 primarily due to an expected increase in fuel costs, as a result of lower production from the local mills due to the coronavirus pandemic.
Oxnard is an approximately 49 megawatt gas-fired plant located in Oxnard, California. The PPA with Southern California Edison expired on May 25, 2020 and was not renewed or extended. The Company recently executed a Reliability Must Run (RMR) agreement with the California Independent System Operator that became effective June 1, 2020 and will expire December 31, 2020. The RMR is conditioned upon the approval of the Federal Energy Regulatory Commission (FERC); the application for approval was submitted to the FERC on May 28, 2020 and is pending. The Company expects that Project Adjusted EBITDA from Oxnard under the RMR agreement will be de minimis.
"Market conditions are currently unfavorable for re-contracting in Ontario and California. These short-term arrangements provide the Company with additional time to pursue longer-term contracting options for both plants," said Joe Cofelice, Executive Vice President—Commercial Development of Atlantic Power. "We continue to work with the provincial government and other stakeholders in Ontario to develop a longer-term solution that properly values the non-power benefit streams provided by Calstock. At Oxnard, our re-contracting effort has been negatively affected by reductions in electricity demand due to the coronavirus pandemic. We will continue to pursue re-contracting options for Oxnard for 2021 in the expectation that electricity demand will recover to pre-pandemic levels."
Although the Company had not assumed continued operation of either Calstock or Oxnard beyond the second quarter, the short-term contract extension for Calstock and the RMR agreement for Oxnard do not result in a change to 2020 Project Adjusted EBITDA guidance of $175 million to $190 million.
About Atlantic Power
Atlantic Power is an independent power producer that owns power generation assets in eleven states in the United States and two provinces in Canada. The Company's generation projects sell electricity and steam to investment-grade utilities and other creditworthy large customers predominantly under long‑term PPAs that have expiration dates ranging from 2020 to 2043. The Company seeks to minimize its exposure to commodity prices through provisions in the contracts, fuel supply agreements and hedging arrangements. The projects are diversified by geography, fuel type, technology, dispatch profile and offtaker (customer). Approximately 75% of the projects in operation are 100% owned and directly operated and maintained by the Company. The Company has expertise in operating most fuel types, including gas, hydro, and biomass, and it owns a 40% interest in one coal project.
Atlantic Power's shares trade on the New York Stock Exchange under the symbol AT and on the Toronto Stock Exchange under the symbol ATP. For more information, please visit the Company's website at www.atlanticpower.com or contact:
Atlantic Power Corporation
Investor Relations
(617) 977-2700
info@atlanticpower.com
Copies of the Company's financial data and other publicly filed documents are available on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml under "Atlantic Power Corporation" or on the Company's website.
Original source can be found here.
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