Capital Power executes 20-year contracts for three solar development projects in North Carolina totaling 160 megawatts

EDMONTON, Alberta, Oct. 19, 2020 (GLOBE NEWSWIRE) -- Capital Power Corporation (Capital Power or the Company) (TSX: CPX) announced today the execution of 20-year power purchase agreements with Duke Energy Carolinas for three solar development projects located in North Carolina totaling 160 megawatts (MW). The solar projects consist of Hornet Solar (75 MW), Hunter’s Cove Solar (50 MW), and Bear Branch Solar (35 MW) (collectively, the “solar projects”). Construction of the solar projects is expected to begin in late 2021 or early 2022 with commercial operations expected in the fourth quarter of 2022.

“We are delighted to provide additional renewable energy to the people of North Carolina,” said Brian Vaasjo, President and CEO of Capital Power. “With the Whitla Wind 2&3 and Strathmore Solar projects in advanced development in Alberta, we will be adding an additional 350 megawatts in renewable capacity to our fleet by the end of 2022 representing another step toward our goal of being net carbon neutral on or before 2050. We continue to enhance our expertise in solar development and construction while building our competitiveness for future solar growth opportunities.”

Palladium Energy LLC and Renewable Energy Services LLC assisted Capital Power on the project while the Company continues to optimize project design, build cost, and tax equity financing. The initial build assumption includes $260 million (US$198 million) to construct the solar projects. Capital Power expects to finance the solar projects using debt and tax equity.

With their 20-year contract terms, the North Carolina solar projects will strengthen our contracted cash flows while increasing the average remaining contract life of our contracted assets. The investment is expected to meet Capital Power’s after-tax hurdle rate with the average accretion expected to be neutral to adjusted funds from operations (AFFO) in the first five years. The solar projects are expected to generate approximately $23 million (US$17 million) of adjusted EBITDA and $5 million (US$4 million) of AFFO annually on average in the first five years.

Non-GAAP measures
Capital Power uses earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from joint venture interests, gains or losses on disposals and unrealized changes in fair value of commodity derivatives and emission credits (adjusted EBITDA) to measure the operating performance of facilities and categories of facilities from period to period. Management believes that a measure of facility operating performance is more meaningful if results not related to facility operations such as impairments, foreign exchange gains or losses and gains or losses on disposals are excluded from the adjusted EBITDA measure. Commencing with the Company’s March 31, 2019 quarter-end, adjusted EBITDA excludes unrealized changes in fair value of commodity derivatives and emission credits which were previously included in adjusted EBITDA. This change was made to better align the Company’s measure of adjusted EBITDA with its other non-GAAP measures, as both the adjusted funds from operations and the normalized earnings per share measures exclude the impacts of unrealized changes in fair value of commodity derivatives and emission credits. This change also results in improved period over period comparability of adjusted EBITDA.