Capital Power holds a 30.5% interest in the limited partnership units of CPILP, a limited partnership with interests in power generation businesses in Canada and the U.S. that generate electricity and steam. CPILP currently has a total net generating capacity (electricity) of 1,400 MW and more than four million pounds per hour of thermal energy.
CPILP’s general partner has contracted for management and administrative services of CPILP to be provided by subsidiaries of Capital Power. The CPILP manager or its affiliates also operate and maintain the power plants and employ substantially all personnel carrying out duties for CPILP.
At present, CPILP’s portfolio consists of 19 wholly owned power generation assets located in Canada (in British Columbia and Ontario) and the U.S. (in California, Colorado, Illinois, New Jersey, New York, and North Carolina); a 50.15% interest in a power generation asset in Washington State. CPILP provides Capital Power with an important presence in, and familiarity with, many key U.S. markets.
Ontario Facilities
CPILPhas four natural gas-fired facilities and one biomass facility located in Ontario. |
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CPILP has four natural gas-fired facilities and one biomass facility located in Ontario. All five facilities are located on the Northern Canadian TransCanada Mainline natural gas pipeline and use waste heat from TransCanada Corporation natural gas compressor stations for a portion of their energy requirements. The Ontario Electricity Financial Corporation (OEFC) is the sole purchaser of power from CPILP’s five Ontario power plants. The power is purchased under long-term PPAs originally entered into by Ontario Hydro in the 1990s and assumed by OEFC as the continuation of Ontario Hydro and which expire between 2012 and 2020. The terms of the PPAs may be extended upon mutual agreement.
Williams Lake
Williams Lake is one of the largest biomass facilities in Canada, with 68 MW of capacity. |
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Williams Lake is one of the largest biomass facilities in Canada, with 68 MW of capacity. The plant went into service in April 1993. It sells power to BC Hydro under a 25-year contract with the initial term expiring in 2018. BC Hydro has an option to extend the electricity purchase agreement (EPA) for two consecutive five-year terms at significantly reduced EPA prices.
Mamquam
Mamquam is a 52 MW hydroelectric facility |
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Mamquam is a 52 MW hydroelectric facility that sells all of its electricity generated to BC Hydro under a long-term contract that will expire in October 2027. It commenced operation in November 1996. BC Hydro has an option, exercisable in 2021 and every five years thereafter, to either purchase the Mamquam facility or extend the Mamquam contract.
Moresby Lake
Moresby Lake is a 6 MW hydroelectric facility |
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Moresby Lake is a 6 MW hydroelectric facility that sells substantially all its electricity to BC Hydro under a long-term contract that will expire in August 2022. The plant went into service in September 1990. The balance, approximately 1% of its power generation, is sold to NAV Canada and the Department of Fisheries and Oceans (Canada) under long-term PPAs.
Northwest U.S. Facilities
CPILP owns three natural gas-fired facilities in the U.S. northwest |
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CPILP owns three natural gas-fired facilities in the U.S. northwest, including the 301 MW Manchief facility and the 101 MW Greeley facility, both located in Colorado, and a 50.15% interest in the 249 MW Frederickson power plant located in Washington State.
The Manchief power plant operates under energy supply agreements with Public Service Company of Colorado (PSCo) that expire in 2022. PSCo is an electricity and natural gas distribution company serving Northern Colorado. PSCo has an option during the latter part of the contracted term to acquire the plant. Manchief is operated and maintained by Colorado Energy Management L.L.C. The Greeley facility provides all of its electrical output to PSCo under a PPA that expires in August 2013 and sells hot water to the University of Northern Colorado pursuant to a thermal supply agreement that expires in August 2013.
California Facilities
CPILP owns four natural gas-fired generation facilities in California |
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CPILP owns four natural gas-fired generation facilities in California including three located on U.S. naval bases (the Naval Facilities). The Naval Facilities are comprised of the Naval Station, North Island and Naval Training Center, and have a combined capacity of 133 MW. The Naval Facilities sell substantially all their electrical output to San Diego Gas and Electric Company (SDG&E) under PPAs, which expire in 2019. SDG&E is an electricity and natural gas distribution company primarily serving the San Diego area. The Naval Facilities also sell steam to the U.S. Navy pursuant to contracts expiring in February 2018.
CPILP has repowered the North Island facility with a new General Electric LM6000 PD turbine, which is expected to improve the efficiency of the natural gas turbine and reduce maintenance costs in comparison to the existing General Electric LM5000 turbine.
Oxnard is a 49 MW facility that provides all of its natural gas turbine electrical output to Southern California Edison Company (SCE) under a PPA that expires in 2020. SCE is an electricity and natural gas distribution company primarily serving areas of southern California outside Los Angeles and San Diego. The Oxnard facility supplies steam to its anhydrous ammonia absorption refrigeration plant, which then provides refrigeration services to Boskovich Farms.
Curtis Palmer
Curtis Palmer is a 60 MW hydroelectric facility |
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Curtis Palmer is a 60 MW hydroelectric facility located in New York State that sells all power generated to Niagara Mohawk Power Corporation under a long-term contract. The PPA ends after the earlier of 42 years or delivery of a cumulative 10,000 GWh of electricity, both of which are expected to occur in 2027.
Northeast U.S. Facilities
CPILP owns two natural gas-fired facilities in the north central and northeast U.S. |
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CPILP owns two natural gas-fired facilities in the north central and northeast U.S.: the Kenilworth 30 MW cogeneration facility located in New Jersey and the 177 MW Morris facility located in Illinois.
The Kenilworth facility sells electrical and steam energy to a subsidiary of Schering-Plough Corporation (Schering-Plough) under an energy contract that expires in July 2012.
The Morris facility sells electrical and steam energy to Equistar Chemicals LP (Equistar), a wholly owned subsidiary of LyondellBasell AF S.C.A., under an energy services agreement that expires in 2023. Morris also has a PPA with Exelon Generation Company, LLC (Exelon) covering 100 MW of electrical capacity. The Exelon PPA expires in 2011. Excess capacity and energy above the needs of Equistar and Exelon can be sold into the Pennsylvania, New Jersey and Maryland markets. On January 6, 2009, Equistar, along with LyondellBasell AF S.C.A.’s other North American operating entities, filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Under provisions in the U.S. Code, Equistar obtained approval to make payments for post-petition services. As a result, the Equistar facility continues to operate and Equistar has made payments for post-petition services.
North Carolina Facilities
CPILP’s two facilities in North Carolina burn a mixture of coal, tire-derived fuel and wood waste. |
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CPILP’s two facilities in North Carolina burn a mixture of coal, tire-derived fuel and wood waste. The Roxboro facility is a 54 MW plant and the Southport facility is a 109 MW plant. Both facilities are undergoing substantial capital improvements in 2009 designed to reduce their NOx and SO2 emissions significantly. The improvements will also change their fuel handling capabilities to reduce the amount of coal, and increase the amount of wood waste and tire-derived fuel consumed, with the anticipated effect of reducing their cost of fuel.
Both facilities provide all of their electrical output to Carolina Power & Light Company (CP&L) under PPAs that expire on December 31, 2009. CP&L is an energy company serving North Carolina and South Carolina and is a subsidiary of Progress Energy, Inc. PPA extensions for both plants are currently being negotiated.
Right of First Offer
Capital Power has agreed to disclose all power generating acquisitions on which Capital Power plans to bid to the independent directors of CPILP General Partner, so that CPILP may be afforded the opportunity to become the bidder/acquirer of such opportunities. CPILP is obliged to respond to such opportunities having regard to the fact that such opportunities may be time sensitive. Capital Power does not anticipate that this right of first offer will materially affect Capital Power’s ability to execute its plans to achieve growth through acquisitions.