CALGARY AND EDMONTON, AB, Dec. 6, 2012 /CNW/ - ENMAX Corporation and Capital Power are pleased to announce today that Capital Power has signed an agreement to purchase a fifty percent interest in the 800MW natural-gas-fueled Shepard Energy Centre, located on the eastern limits of the City of Calgary. The parties will build, own, and operate the Shepard Energy Centre under a joint venture agreement.
The Shepard Energy Centre project is a significant advancement in moving Alberta toward lower-emitting, highly reliable, more efficient natural gas-fueled electricity generation, made possible because of the abundance of clean-burning natural gas. The Shepard Energy Centre will produce less than half the carbon dioxide per MWh than a conventional coal plant. It will also emit less other emissions such as carbon monoxide, sulphur dioxide, and nitrogen dioxide.
Construction commenced on the Shepard Energy Centre in July 2011. The project is on budget and on schedule for completion in the first quarter of 2015.
The Shepard Energy Centre will provide a reliable, competitively priced supply of power for Alberta consumers. It will be the largest natural-gas-fueled power facility in western Canada. The budget for the project is approximately $1.4 billion. Capital Power is investing approximately $860 million into the project once interest during construction is included.
"ENMAX is proud of the excellent progress we've made in constructing the Shepard Energy Centre on schedule and on budget," said ENMAX President and CEO, Gianna Manes. "We are pleased to welcome Capital Power to the project, and look forward to working together on this important investment in Alberta. By holding a joint venture position in one of the largest investments in Alberta's electricity future, ENMAX will remain well positioned for strategic growth and securing a diversified portfolio of future supply for our customers."
"We are pleased to work with ENMAX on the Shepard facility," said Capital Power President and CEO, Brian Vaasjo. "This project provides Capital Power with an exceptional opportunity for a partially contracted investment in Canada's fastest-growing market. It is an excellent fit with our business strategy and will strengthen our position in Alberta, where we have extensive experience and a well-established portfolio of assets."
About Capital Power
Capital Power (TSX: CPX) is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The Company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns more than 3,600 megawatts of power generation capacity at 16 facilities across North America. An additional 595 megawatts of owned generation (including the Shepard Energy Centre) is under construction or in advanced development.
About ENMAX Corporation
ENMAX Corporation, through subsidiaries and predecessors, has provided Albertans with safe and reliable electricity for more than 100 years. ENMAX Corporation provides electricity, natural gas and value-added services to more than 660,000 residential, commercial and industrial metered customer locations in Alberta. ENMAX Energy Corporation, a subsidiary of ENMAX Corporation, is Alberta's leading competitive electricity retailer. Through subsidiaries, ENMAX Energy is one of Alberta's largest investors in renewable energy and was the first Canadian electricity retailer to offer customers the option to support wind generated energy. As well, ENMAX Corporation, through its subsidiary ENMAX Envision Inc., provides fibre optic networks for high speed data and internet communications. Visit our website at enmax.com.
Certain information in this news release is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial and operating performance, events or strategies. The forward-looking information or statements are provided to inform shareholders and potential investors about management's assessment of Capital Power's future plans and operations. This information may not be appropriate for other purposes. The forward-looking information in this news release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes. Material forward-looking information includes, among other things, information relating to: (i) expectations regarding future growth and emerging opportunities in the Alberta market including the focus on certain technologies; and (ii) expectations regarding the timing of, funding of, and costs for existing and planned development projects and acquisitions.
All forward-looking information or statements reflect Capital Power's assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, and other factors it believes are appropriate. Readers are cautioned not to place undue reliance on this forward-looking information. Capital Power undertakes no obligation to update or revise any forward-looking information except as required by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the anticipated results, refer to Capital Power's Management's Discussion and Analysis dated and filed March 13, 2012 under Capital Power's profile on SEDAR at http://www.sedar.com/ and other reports filed by Capital Power with Canadian securities regulators.
Shepard Energy Centre Backgrounder
What is the Shepard Energy Centre?
- 800-MW natural gas-fired generation facility located in southeast Calgary.
- Two 240-MW natural gas-fired turbines and one 320-MW steam turbine, all of which are manufactured by Mitsubishi.
- First in Canada to use state-of-the-art high efficiency G-class gas turbines.
- Will be the lowest-cost, non-cogeneration, natural-gas generator in Western Canada.
- Located on an excellent site, close to a major load centre, the 240-kV transmission line network, and TransCanada Pipeline's high-pressure natural gas pipeline
What is the arrangement between Capital Power and ENMAX?
- Capital Power has agreed to purchase a fifty percent interest in the Shepard Energy Centre and to enter into a joint-venture agreement with ENMAX to construct and operate the facility.
- The project budget is approximately $1.4 billion. Capital Power's investment is approximately $860 million once interest during construction is included.
- The parties will be subject to various commercial agreements, including a 20-year tolling agreement. Under the tolling agreement, ENMAX will pay Capital Power a fixed capacity charge for 75 per cent of Capital Power's share of the output from the Shepard facility for the 2015 to 2017 period, and decreasing to 50 per cent of Capital Power's output for 2018 to 2035. The tolling agreement has operating and maintenance cost flow-through provisions to ENMAX. Commercial arrangements also include contracts for differences for 100 MW in 2013, 300 MW in 2014, and 100 MW in 2015.
Who will operate the facility?
- ENMAX is responsible for completion of construction.
- ENMAX will operate the facility.
- Capital Power will administer the dispatch of the electrical output.
- Each party has dispatch rights to their own blocks of capacity.
SOURCE: Capital Power Corporation
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