Capital Power completes acquisition of 50.15% interest in the Frederickson 1 Generating Station

EDMONTON, Alberta, Dec. 28, 2023 (GLOBE NEWSWIRE) -- Capital Power Corporation (TSX: CPX) (“Capital Power”) successfully completed the acquisition of a 50.15% interest in the Frederickson 1 Generating Station (“Frederickson 1” or the “Facility”), a 265-megawatt (MW) natural gas-fired combined-cycle generation facility in Pierce County, Washington. The acquisition was previously announced on October 10, 2023.

The facility was acquired from Atlantic Power & Utilities for US$97.5 million, subject to working capital adjustments. Capital Power financed the transaction using cash on hand and its credit facilities. The other 49.85% interest in the Facility is owned by Puget Sound Energy (“PSE”). As part of the ownership agreement with PSE, Capital Power will operate and maintain the facility and will receive an annual management fee under the operating arrangement with PSE.

Located southeast of Tacoma in the Puget Sound Region load centre, Frederickson 1 is a flexible generation asset that is well-positioned to support long-term energy security and reliability for the Pacific Northwest. The Facility is supported by long-term contracts out to October 2030 with credit-worthy counterparties and is well-positioned for re-contracting as a key dispatchable, baseload asset in the region. Additionally, the Frederickson 1 site and adjacent lands provide ample room and infrastructure for future non-emitting, flexible generation developments.

The acquisition is immediately accretive to near-term cash flows and, for Capital Power’s portion of the Facility, provides an expected average contracted adjusted EBITDA of US$15 million per year during the 5-year period of 2024-2029.

Non-GAAP Financial Measures and Ratios
The Company uses earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from its joint venture interests, gains or losses on disposals and unrealized changes in fair value of commodity derivatives and emission credits (adjusted EBITDA) as a financial performance measure.

This term is not a defined financial measure according to GAAP and does not have a standardized meaning prescribed by GAAP. Therefore, it is unlikely to be comparable to similar measures used by other enterprises. This measure should not be considered an alternative to net income or to other measures of financial performance calculated in accordance with GAAP. Rather, this measure is provided to complement GAAP measures in the analysis of the Company’s results of operations from management’s perspective.