Capital Power ditches agreement to buy output of Sundance C coal-fired plant
The corporate logo of Capital Power Corp. (TSX:CPX), a North American independent power producer, is shown.
The Canadian Press
Published Thursday, March 24, 2016 10:56AM EDT
EDMONTON -- Capital Power Corp. (TSX:CPX) is terminating an agreement to buy electricity from the Sundance C coal-fired power plant west of Edmonton in response to a change in provincial regulations that took effect this year.
The Edmonton-based company says it expects to record a non-cash writeoff of the power agreement's value, amounting to $53 million before taxes and $46 milion after taxes.
However, Capital Power says it expects the termination will have a positive impact on earnings between now and 2020.
Capital Power is the latest company to terminate power purchase agreements with the Sundance power generating operation.
TransCanada Corp. (TSX:TRP) previously issued notice that it would terminate its powers purchase agreements for Sundance A and B, either directly or through its ASTC Power Partnership with AltaGas Pipeline Partnership.
The NDP government of Rachel Notley announced in November that it planned to impose a carbon tax and phase out coal-fired power plants in order to reduce carbon dioxide emissions, a contributor to global warming.