A Capital Power update
Capital Power announced it's third quarter results recently and it was somewhat disappointing;they had a shortfall of power and had to buy extra power for it's customers at a very high price.This had an impact on their net income.But revenues were on target and they were able to raise their dividend by 8%.They also are coming up with new promising projects.
New Projects
First they announced that the Shepherd Centre (a new project) will begin operations in the first quarter of 2015.Secondly the K2 wind project will begin operation in mid 2015;it is a 270MW project in Goderich where wind power is abundant.K2 is estimated to cost about $930 million and Capital Power's share will be $310 million.Lastly they have moved into the construction phase of their Genesee 4 and 5 project.Genesee was a coal mine and started with a steam turbine but now it is much more extensive.Capital Power(CPX) will enter into a joint venture with Enmax ;shovels will be in the ground in mid 2015.Enmax will buy 225 MW for 8 years.The new plant will be built at the existing Genesee station west of Edmonton.It will have a natural gas turbine, the steam turbine,a generator and a heat recovery steam generator.It will utilize existing equipment.When it is finished it will have 1060MW of power but it will only be completed in 2018.CPX will lead the construction of the project.
More Immediate Revenues
Once these new projects come onstream CPX will be able to replace the generation lost from the retirement of existing coal generation facilities in Alberta.However CPX also bought some new properties.They signed an agreement with Element Power US for $70 million,including$52 million in project debt.These new properties are wind and solar energy sites.This includes a North Carolina site with a15 MW solar contract with Duke Energy.Also they bought a site called Macho Springs which is a 50MW wind project with a 20 year power purchase agreement with Tucson Power.
Raised their Guidance
Capital Power is trying to raise their operational target for availability to 94%.This reduces their chances of having power shortfalls and buying expensive power from competitors.Also they announced that funds from operations (FFO) should be $365 to $415 million.This means that EBITDA should be about $380 to $425 million and that is up from earlier guidance.I believe that CPX counts on the extra earnings coming from their two new American sites.This might boost e.p.s. by around 10 to 15%.
New Projects
First they announced that the Shepherd Centre (a new project) will begin operations in the first quarter of 2015.Secondly the K2 wind project will begin operation in mid 2015;it is a 270MW project in Goderich where wind power is abundant.K2 is estimated to cost about $930 million and Capital Power's share will be $310 million.Lastly they have moved into the construction phase of their Genesee 4 and 5 project.Genesee was a coal mine and started with a steam turbine but now it is much more extensive.Capital Power(CPX) will enter into a joint venture with Enmax ;shovels will be in the ground in mid 2015.Enmax will buy 225 MW for 8 years.The new plant will be built at the existing Genesee station west of Edmonton.It will have a natural gas turbine, the steam turbine,a generator and a heat recovery steam generator.It will utilize existing equipment.When it is finished it will have 1060MW of power but it will only be completed in 2018.CPX will lead the construction of the project.
More Immediate Revenues
Once these new projects come onstream CPX will be able to replace the generation lost from the retirement of existing coal generation facilities in Alberta.However CPX also bought some new properties.They signed an agreement with Element Power US for $70 million,including$52 million in project debt.These new properties are wind and solar energy sites.This includes a North Carolina site with a15 MW solar contract with Duke Energy.Also they bought a site called Macho Springs which is a 50MW wind project with a 20 year power purchase agreement with Tucson Power.
Raised their Guidance
Capital Power is trying to raise their operational target for availability to 94%.This reduces their chances of having power shortfalls and buying expensive power from competitors.Also they announced that funds from operations (FFO) should be $365 to $415 million.This means that EBITDA should be about $380 to $425 million and that is up from earlier guidance.I believe that CPX counts on the extra earnings coming from their two new American sites.This might boost e.p.s. by around 10 to 15%.
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