Capital Power adds 250 megawatts of long-term contracted wind generation to its renewable portfolio

EDMONTON, Alberta, March 16, 2020 (GLOBE NEWSWIRE) -- Capital Power Corporation (“Capital Power” or the “Company”) (TSX: CPX) announced today that it has entered into an agreement to acquire a 100% ownership interest in Buckthorn Wind, a 100.5 megawatt wind facility, from private investors. The equity purchase price is between US$60 million and US$69 million pending the realization of future market performance and entering into the tax equity partnership with a tax equity balance of US$68 million. The transaction will be 100% debt financed and is expected to close in the second quarter of 2020 subject to regulatory approvals and other customary closing conditions. 

In addition, the construction of Capital Power’s Cardinal Point Wind project has been completed on-schedule and will begin commercial operations this week. The construction cost of the 150 megawatt wind project located in Illinois is expected to be within its projected total cost of US$236 million to US$246 million. Capital Power will operate Cardinal Point Wind under a 12-year fixed price contract with an investment grade U.S. financial institution covering 85% of the facility’s output. The expected adjusted EBITDA and adjusted funds from operations (AFFO) in the first full year of operations is US$40 million and US$4 million, respectively. A tax equity investor is committed to the project.

“The acquisition of Buckthorn Wind provided an opportunity to acquire a young renewables asset with a 15-year weighted average contract life remaining,” said Brian Vaasjo, President and CEO of Capital Power. “With the addition of Cardinal Point Wind, the long-term contracts from these two new assets enhance our contracted cash flow profile and expand our renewables portfolio to approximately 1,200 megawatts with an additional 100 megawatts in advanced development from Whitla Wind 2.”

Buckthorn Wind is located in Erath County, approximately 60 miles south of Dallas, Texas and began commercial operations in January 2018. It operates in the liquid Electric Reliability Council of Texas (ERCOT) North region between most of the wind generation in ERCOT-West and the Dallas load center. The ERCOT North region has strong fundamentals with a high likelihood of baseload generation retirements and is one of the fastest growing regions in the United States. Buckthorn Wind is strategically located near the Dallas load center allowing for a premium in pricing to ERCOT-West projects. ERCOT North is an attractive market with significant renewable growth and a high degree of long term contracting on renewable assets.