DEDHAM, Mass., June 3, 2020 /CNW/ -- Atlantic Power Corporation
(NYSE: AT) (TSX: ATP) ("Atlantic Power" or the "Company") provides
the following update on the Power Purchase Agreements (PPAs) for
its Calstock and Oxnard plants:
Calstock is an approximately 35
megawatt biomass plant located in Hearst,
Ontario. The PPA with the Ontario Electricity Financial
Corporation, which had been scheduled to expire in June 2020, was recently extended to December 16, 2020 on existing terms. The
extension provides the provincial government additional time to
evaluate the future role of the Calstock plant and biomass generation in the
province. The Company expects Project Adjusted EBITDA from
Calstock in the July through
December period will be lower than the comparable period in 2019
primarily due to an expected increase in fuel costs, as a result of
lower production from the local mills due to the coronavirus
pandemic.
Oxnard is an approximately 49
megawatt gas-fired plant located in Oxnard, California. The PPA with Southern
California Edison expired on May 25,
2020 and was not renewed or extended. The Company recently
executed a Reliability Must Run (RMR) agreement with the California
Independent System Operator that became effective June 1, 2020 and will expire December 31, 2020. The RMR is conditioned upon
the approval of the Federal Energy Regulatory Commission (FERC);
the application for approval was submitted to the FERC on
May 28, 2020 and is pending. The
Company expects that Project Adjusted EBITDA from Oxnard under the RMR agreement will be de
minimis.
"Market conditions are currently unfavorable for re-contracting
in Ontario and California. These short-term arrangements
provide the Company with additional time to pursue longer-term
contracting options for both plants," said Joe Cofelice, Executive Vice
President—Commercial Development of Atlantic Power. "We continue to
work with the provincial government and other stakeholders in
Ontario to develop a longer-term
solution that properly values the non-power benefit streams
provided by Calstock. At
Oxnard, our re-contracting effort
has been negatively affected by reductions in electricity demand
due to the coronavirus pandemic. We will continue to pursue
re-contracting options for Oxnard
for 2021 in the expectation that electricity demand will recover to
pre-pandemic levels."
Although the Company had not assumed continued operation of
either Calstock or Oxnard beyond the second quarter, the
short-term contract extension for Calstock and the RMR agreement for
Oxnard do not result in a change
to 2020 Project Adjusted EBITDA guidance of $175 million to $190
million.
About Atlantic Power
Atlantic Power is an independent power producer that owns power
generation assets in eleven states in the
United States and two provinces in Canada. The Company's 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 2020 to 2043. 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). Approximately
75% 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 under
Canadian securities law (collectively, "forward-looking
statements").
Certain statements in this news release may constitute
forward-looking information or forward-looking statements within
the meaning of applicable securities laws (collectively,
"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
"plans", "expects", "does not expect", "is expected", "budget",
"estimates", "forecasts", "targets", "intends", "anticipates" or
"does not anticipate", "believes", "outlook", "objective", or
"continue", or equivalents or variations, including negative
variations, of such words and phrases, or state that certain
actions, events or results, "may", "could", "would", "should",
"might" or "will" be taken, occur or be achieved. Examples of such
statements in this press release include, but are not limited to,
statements with respect to the following:
- the impact of the coronavirus pandemic on the economy and the
Company's operations, including the measures taken by governmental
authorities to address it, which may precipitate or exacerbate
other risks and/or uncertainties;
- the Company's expectation for Project Adjusted EBITDA from the
Calstock plant in the July through
December 2020 period;
- the Company's ability to obtain the approval of the FERC, which
is a condition of the RMR agreement for Oxnard;
- the Company's expectation for Project Adjusted EBITDA from the
Oxnard plant under the RMR
agreement;
- the Company's assessment of market conditions in Ontario and California;
- the Company's expectations about the timing and extent of the
recovery of electricity demand in California;
- the Company's views with respect to re-contracting potential
for the Oxnard plant in 2021;
and
- the Company's 2020 Project Adjusted EBITDA guidance of
$175 million to $190 million.
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.
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SOURCE Atlantic Power Corporation