DEDHAM, Mass., May 15, 2019 /CNW/ -- Atlantic Power
Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") announced today that it has executed an agreement to
acquire, for $20 million, the equity
ownership interests held by AltaGas Power Holdings (U.S.) Inc.
("AltaGas") in two contracted biomass plants in North Carolina and Michigan. The acquisition is subject to the
approval of the Federal Energy Regulatory Commission and customary
third-party consents. Closing is expected by mid-2019. The purchase
will be funded from the Company's discretionary cash.
Craven County Wood Energy is a 48 megawatt (MW) biomass plant in
North Carolina that has been in
service since October 1990. Atlantic
Power will acquire a 50% interest in the plant from AltaGas. The
remaining 50% interest is held by CMS Energy. Craven County has a Power Purchase Agreement
(PPA) with Duke Energy Carolinas that runs through December 2027. The plant burns wood waste,
including wood chips, poultry litter, forestry residues, mill
waste, bark and sawdust.
Grayling Generating Station is a 37 MW biomass plant in
Michigan that has been in service
since June 1992. Atlantic Power will
acquire a 30% interest in the plant from AltaGas. The remaining
interests are held by Fortistar (20%) and CMS Energy (50%).
Grayling has a PPA with Consumers Energy, the utility subsidiary of
CMS Energy, which runs through December
2027. The plant burns wood waste from local mills, forestry
residues, mill waste and bark.
Both plants are operated by an affiliate of CMS Energy. There is
no project-level debt at either plant.
"Since last summer, we have announced the acquisitions of five
plants – Craven County and
Grayling; the remaining ownership interests in the Koma Kulshan
hydro facility, which we acquired in July; and the Allendale and Dorchester biomass plants in South Carolina, on which we expect to close
later this year. The PPAs for these acquired plants run through
December 2027, March 2037 and October
2043, respectively," said James J.
Moore, Jr., President and CEO of Atlantic Power. "The
acquisitions represent a meaningful addition to the level and
length of our existing contracted cash flows, and we estimate they
will contribute Project Adjusted EBITDA of $8 million to $10
million annually on average through the date of the first
PPA expiration.1 We acquired the five plants at what we
consider to be attractive prices."
Mr. Moore continued, "As a result of the strengthening of our
balance sheet (with more than $1
billion of debt reduction since 2014), reduction in interest
and overhead costs (more than $100
million in recurring annual cost savings) and ample
liquidity (approximately $198 million
at March 31, 2019), we have been able
to continue with debt reduction, repurchases of common and
preferred shares under our normal course issuer bid and the
acquisition of contracted plants that add to our cash flow. We
remain focused on cash flow and intrinsic value per share in making
these capital allocation decisions."
About Atlantic Power
Atlantic Power is an independent power producer that owns power
generation assets in nine states in the
United States and two provinces in Canada. The 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 2019 to 2037. 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). The majority
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.
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
forward-looking information 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," "should," "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 view that the five acquired plants represent a
meaningful addition to the level and length of existing contracted
cash flows;
- the Company's estimate that the five acquired plants will
contribute approximately $8 million
to $10 million of Project Adjusted
EBITDA annually on average through the expiration of the first
PPA;
- the Company's view that the acquisitions were done at
attractive prices; and
- the Company's view that it is able to continue with debt
reduction, repurchases of common and preferred shares under its
normal course issuer bid, and acquisitions.
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
U.S. Securities and Exchange Commission (the "SEC") 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.
1 The Company has not provided guidance for Project
income or Net income on a Project basis because of the difficulty
of making accurate forecasts and projections without unreasonable
efforts with respect to certain highly variable components of these
comparable GAAP metrics, including changes in the fair value of
derivative instruments and foreign exchange gains or
losses.
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SOURCE Atlantic Power Corporation