DEDHAM, Mass., Jan. 9, 2017 /PRNewswire/ -- Atlantic Power
Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") announced today revised contractual arrangements for,
and operational status of, its Kapuskasing, North
Bay and Nipigon facilities
in Ontario, each having a capacity
of 40 megawatts. Effective for 2017, Atlantic Power Limited
Partnership (APLP, a subsidiary of the Company) has signed
Non-Utility Generator (NUG) Enhanced Dispatch Contracts with the
Ontario Independent Electricity System Operator for the three
facilities. In conjunction with the execution of the new
contracts, APLP has agreed to terminate the Power Purchase
Agreements (PPAs) with the Ontario Electricity Financial
Corporation (OEFC) for the Kapuskasing and North Bay plants, which were scheduled to
expire in December 2017, and to
suspend for a period (as described below) the Nipigon PPA, which is
scheduled to expire in December 2022.
The Enhanced Dispatch Contracts for Kapuskasing and North Bay provide a fixed monthly payment to
the plants until December 31,
2017. The contracts have no delivery obligations and allow
APLP to retain operating flexibility. Based on its assessment
of the Ontario power market,
including the estimated impact on plant economics, the Company has
begun the process of mothballing both plants.
The Enhanced Dispatch Contract for Nipigon provides fixed monthly payments to
that plant through October 31,
2018. During that period, the plant's PPA with the OEFC will
be suspended. At the conclusion of that period, or after that
date should that subsequently be agreed to, the arrangement will
revert to the existing terms of the PPA. The Company also has
begun the process of mothballing Nipigon.
The Company is committed to working with those employees
affected by the decision to mothball the three
facilities.
Atlantic Power believes this outcome provides benefits for
ratepayers and contributes to the Province's goal of reducing
greenhouse gas emissions. The Company is continuing to work
collaboratively with the relevant parties on potential other
initiatives that could result in additional benefits to
ratepayers.
The Company does not expect the revised contractual arrangements
for these three facilities to have a cash impact on its 2016
financial results. However, because the PPAs at the
Kapuskasing and North Bay plants have been terminated one year
earlier than the original expiration date, the amortization of the
intangible assets related to those PPAs must be accelerated,
resulting in a non-cash amortization expense, subject to audit
adjustments, of approximately $13
million, which will be included in 2016 net income rather
than being expensed over the course of 2017. The impact on
2017 financial results is expected to be positive as compared to
the corresponding results under the previous arrangements for the
three plants. Further detail will be provided in the
Company's 2016 year-end earnings release and annual report on Form
10-K.
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of twenty-three
power generation assets across nine states in the United States and two provinces in
Canada. The Company's power generation projects sell
electricity to utilities and other large commercial customers
largely under long-term power purchase agreements, which seek to
minimize exposure to changes in commodity prices. The
aggregate gross electric generation capacity of this portfolio is
approximately 2,138 megawatts (MW), and the Company's aggregate net
ownership interest is approximately 1,500 MW. Nineteen of the
projects are currently operational, totaling 1,975 MW on a gross
capacity basis and 1,337 MW on a net ownership basis; the other
four, all in Ontario, are
presently mothballed.
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.
Cautionary Note Regarding Forward-Looking Statements
To the extent any statements made in this news release contain
information that is not historical, these statements are
forward-looking statements within the meaning of Section 27A of the
U.S. Securities Act of 1933, as amended, and Section 21E of the
U.S. Securities Exchange Act of 1934, as amended, and under
Canadian securities law (collectively, "forward-looking
statements").
Certain statements in this news release may constitute
"forward-looking statements", which reflect the expectations of
management regarding the future growth, results of operations,
performance and business prospects and opportunities of the Company
and its projects. These statements, which are based on
certain assumptions and describe the Company's future plans,
strategies and expectations, can generally be identified by the use
of the words "may," "will," "project," "continue," "believe,"
"intend," "anticipate", "expect" or similar expressions that are
predictions of or indicate future events or trends and which do not
relate solely to present or historical matters. Examples of
such statements in this press release include, but are not limited,
to statements with respect to the following:
- The Company's assessment of the Ontario power market, including the estimated
impact on plant economics, and the impact of that assessment on the
Company's decision to mothball the affected facilities;
- the Company's belief that the revised contractual arrangements
and operating status of its plants will result in benefits for
Ontario ratepayers, and contribute
to the Province's greenhouse gas reduction goals;
- the Company's expectation that the revised contractual
arrangements will not result in a cash impact on its 2016 financial
results, but will result in approximately $13 million, subject to audit adjustments, of
additional amortization expense associated with intangible assets
related to the Kapuskasing and
North Bay PPAs that will be recorded in 2016;
- the Company's expectation that the revised contractual
arrangements and operating status of its plants will have a
positive impact on its 2017 financial results relative to the
corresponding results under the previous arrangements; and
- the Company's plan to provide further detail on the revised
arrangements in its year-end 2016 earnings release and annual
report on Form 10-K.
Forward-looking statements involve significant risks and
uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate
indications of whether or not or the times at or by which such
performance or results will be achieved. Please refer to the
factors discussed under "Risk Factors" and "Forward-Looking
Information" in the Company's periodic reports as filed with the
Securities and Exchange Commission from time to time for a detailed
discussion of the risks and uncertainties affecting the
Company. Although the forward-looking statements contained in
this news release are based upon what are believed to be reasonable
assumptions, investors cannot be assured that actual results will
be consistent with these forward-looking statements, and the
differences may be material. These forward-looking statements
are made as of the date of this news release and, except as
expressly required by applicable law, the Company assumes no
obligation to update or revise them to reflect new events or
circumstances.
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SOURCE Atlantic Power Corporation