EPCOR Power L.P. provides update on its investment in Primary Energy Recycling Holdings



    EDMONTON, June 19 /CNW/ - EPCOR Power L.P. (TSX: EP.UN) (the Partnership)
and EPCOR Power Equity Ltd. (TSX: EPP.PR.A) (the Corporation), a subsidiary of
the Partnership, announces an update on its 15.4 per cent equity interest in
Primary Energy Recycling Holdings LLC (PERH).
    As previously announced in September 2008, the Partnership and Primary
Energy Recycling Corporation (TSX: PRI.UN) (PERC), which owns a majority
interest in PERH, undertook a sales process for the possible sale of PERC
and/or PERH.
    On June 19, 2009, PERC announced an update to the sales process. Final
bids from potential buyers were submitted at the end of April 2009. The Board
of Directors for PERC reviewed the final bids with its financial and legal
advisors and in conjunction with the Partnership concluded that none of the
offers would provide adequate value.
    PERH has indicated it intends to suspend dividends on its common shares.
In 2008, the Partnership received approximately $3 million in annual dividends
from its common shares in PERH, representing approximately 1.5 per cent of the
Partnership's 2008 operating margin (before fair value changes on foreign
exchange and natural gas contracts) (See Non-GAAP Measure). PERH also outlined
plans to recapitalize the company, including the conversion of all of its
preferred interests, including the Partnership's preferred interest, into
newly issued common shares. In 2008, the Partnership received approximately $2
million in annual dividends from its preferred interests in PERH. The net book
value of the PERH investment in the Partnership's financial statements at
March 31, 2009 was approximately $17 million or 1.0 per cent of its total
assets.
    The Partnership, PERC and PERH have agreed in principle on various
changes to the current management agreement. The Partnership expects operating
margins from the revised management agreement to remain unchanged.
    On June 7, 2009, the Partnership announced a revised, sustainable
quarterly distribution level of $0.44 per unit. The potential impacts of the
PERH actions were included in the determination of the Partnership's revised
distribution level.
    The Partnership and PERC remain committed to optimizing the business and
refinancing a US$135 million term loan in a PERH subsidiary that matures on
August 24, 2009; however, there is no assurance that the refinancing will
occur.

    Non-GAAP Measure

    The Partnership uses operating margin as a performance measure. Operating
margin, which includes deferred revenues, is not a defined financial measure
according to Canadian generally accepted accounting principles (GAAP) and does
not have a standardized meaning prescribed by GAAP. Therefore, operating
margin may not be comparable to similar measures presented by other
enterprises.
    The Partnership uses operating margin to measure the financial
performance of plants and groups of plants. A reconciliation from operating
margin to net income before tax and preferred share dividends is contained in
the Partnership's management's discussion and analysis for the year ended
December 31, 2008 dated March 4, 2009 and filed on SEDAR at sedar.com.

    About EPCOR Power L.P.

    Established in 1997, EPCOR Power L.P. is a limited partnership organized
under the laws of the Province of Ontario. The Partnership's portfolio
consists of 19 wholly-owned power generation assets located in Canada and the
United States, a 50.15 per cent interest in a power generation asset in
Washington State, and an overall 15.4 per cent equity interest in Primary
Energy Recycling Holdings LLC (PERH). The Partnership's assets have a total
net generating capacity of 1,400 megawatts and more than four million pounds
per hour of thermal energy. PERH wholly owns four recycled energy assets in
the United States with an aggregate generation capacity of 283 megawatts and
nearly two million pounds per hour of thermal energy, and has a 50 per cent
interest in a pulverized coal facility. EPCOR USA Ventures LLC, formerly
Primary Energy Ventures LLC, a wholly-owned subsidiary of the Partnership,
manages and operates these facilities for PERH. For more information on the
Partnership, please visit: www.epcorpowerlp.ca.

    About EPCOR Power Equity Ltd.

    The Corporation was incorporated under the laws of the Province of
Alberta on June 26, 1998 and is a subsidiary of the Partnership. The
Corporation operates as a holding company and indirectly holds all of the
Partnership's business and power generation and other assets in the United
States, including the Partnership's Curtis Palmer, Manchief, Frederickson,
Naval Station, North Island, Naval Training Center, Oxnard, Greeley,
Kenilworth, Roxboro, Southport and Morris power generating facilities. These
facilities have a total generating capacity of approximately 1,080 megawatts
(representing approximately 77 per cent of the total generating capacity of
the Partnership's assets) and more than four million pounds per hour of
thermal energy (representing 100 per cent of the total thermal energy capacity
of the Partnership's assets). In addition, the Corporation holds, through a
wholly-owned subsidiary, the Partnership's overall 15.4 per cent equity
interest in PERH. For more information on the Corporation, please visit:
www.epcorpowerlp.ca.





For further information:

For further information: Media inquiries: Tim LeRiche, (780) 969-8238;
Unitholder and analyst inquiries: Randy Mah, (780) 412-4297, (866) 896-4636
(toll-free)

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EPCOR POWER L.P.

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