DEDHAM, Mass., Dec. 22, 2015 /CNW/ -- Atlantic Power
Corporation (NYSE: AT) (TSX: ATP) ("Atlantic Power" or the
"Company") announced today an agreement with Equistar Chemicals,
LP, a subsidiary of LyondellBasell, to modify and extend the Energy
Services Agreement (ESA) for its Morris project from November 2023 to December
2034. The facility's ground lease and equipment leases
also have been extended to the ESA expiration date. The
changes to the ESA become effective January
1, 2016.
"The modified agreement extends our relationship with an
important customer while also extending our presence and
participation in the PJM power market," said James J. Moore, Jr., President and Chief
Executive Officer of Atlantic Power.
Morris is a 177 megawatt (MW)
natural gas combined-cycle facility that entered commercial
operation in 1998. The project is located in Morris, Illinois, approximately 60 miles from
Chicago, and is in the ComEd zone
of PJM. Equistar is the primary customer for the project's
steam output. The remaining capacity and energy as well as
ancillary services are sold into the PJM market.
Separately, and not related to the ESA modifications and
extension, the Company expects that Morris will undergo an approximately six-week
major maintenance outage in the late summer of 2016.
Morris is also expected to undergo
a shorter routine outage in the spring. During these outages,
the Company will continue work on upgrades to the project's
combustion turbines and steam turbine generator, which are expected
to enhance availability and reliability. Higher maintenance
expense associated with both outages and lost margin during the
longer outage, as well as other less significant factors, are
expected to reduce Project Adjusted EBITDA from the Morris project by approximately 60% in 2016
from an above-average level in 2015.
The extension of the Morris ESA increases the average remaining
life of the Company's Power Purchase Agreements (PPAs) from 7.2
years to 7.6 years (on an EBITDA-weighted
basis).
Mr. Moore continued, "We expect the changes to the ESA will
result in modestly higher Project Adjusted EBITDA from Morris on average relative to the original
contract. The terms of this amendment and extension were
achieved despite very challenging power market conditions.
This is an indication of the value of reliable, well-located
projects and strong customer relationships. Now that we have
significantly reduced our debt and overhead costs, we are in a
better financial position to be patient and disciplined in
considering PPA extensions depending on customer needs, market
conditions and terms."
About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power
generation assets in the United
States and Canada. The Company's power generation
projects sell electricity to utilities and other large commercial
customers largely under long-term power purchase agreements, which
seek to minimize exposure to changes in commodity prices.
Atlantic Power's power generation projects in operation have an
aggregate gross electric generation capacity of approximately 2,141
MW, in which its aggregate ownership interest is approximately
1,504 MW. The Company's current portfolio consists of
interests in twenty-three operational power generation projects
across nine states in the United
States and two provinces in Canada.
Atlantic Power trades 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 certain financial data and other publicly filed
documents are filed 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 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 "may," "will," "project," "continue," "believe,"
"intend," "anticipate," "expect" or similar expressions that are
predictions of or indicate future events or trends and which do not
relate solely to present or historical matters. Examples of
such statements in this press release include, but are not limited
to, statements with respect to the following:
- the Company expects a modest increase in Project Adjusted
EBITDA from Morris on average
relative to the terms of the original ESA;
- upgrades of the Morris
project's combustion turbines and steam turbine generator are
expected to enhance the project's availability and
reliability;
- the Company expects above-average Project Adjusted EBITDA from
the Morris project in 2015;
- the Company expects an approximate 60% reduction in 2016
Project Adjusted EBITDA from Morris due to the planned outages and other
less significant factors in 2016;
- the Morris ESA extension being an indication of the value of
reliable, well-located projects and strong customer relationships;
and
- the Company being in a better financial position to be patient
and disciplined in considering PPA extensions depending on customer
needs, market conditions and terms.
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
Securities and Exchange Commission 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