BC Hydro announced today that Capital Power Corporation's ("Capital Power," or "the Company") (TSX: CPX) Quality Wind Project ("Quality Wind," or "the project") has been selected for the award of an Energy Purchase Agreement ("EPA").
The 142-megawatt (MW) wind power project would be located in northeastern British Columbia, and developed by an indirect wholly-owned subsidiary of Capital Power. The project has an expected cost of $455 million.
Clean, renewable energy generated by Quality Wind would be sold under a 25-year EPA with BC Hydro. Commercial operation is expected to commence no later than the spring of 2013.
"Quality Wind is an excellent fit with Capital Power's strategy," said Capital Power President and CEO, Brian Vaasjo. "Once constructed, we expect the project to be immediately accretive to earnings, and the long-term contract supports our strategy to maintain a balance between contracted and merchant generation."
Management expects that Quality Wind would be funded in conjunction with the Company's overall financing plan, and be consistent with its commitment to maintaining its investment-grade credit ratings. Capital Power currently has about $1.2 billion in credit facilities available.
The Quality Wind project design currently calls for 79 turbines on a site about 10 kilometres northeast of Tumbler Ridge, British Columbia, a community of 2,500. The proposed site is near Highway 52, which provides relatively good access for construction. The area has seen other development, including oil/gas activity and forestry operations. Public consultation for the project began in 2007.
"Based on the input we've received from local stakeholders, and from the field studies we've conducted, the project site appears to be well suited for development," said Keith Boutcher, a Director of Business Development with Capital Power. "Subject to the completion of the review process, we believe that the physical characteristics of the area would allow us to build and operate the project with a minimum of environmental and stakeholder impacts."
Construction of the Quality Wind project will be subject to regulatory approvals, including completion of the provincial environmental assessment (EA) process and approval of the EPA by the B.C. Utilities Commission.
The project is currently being reviewed under British Columbia's Environmental Assessment Act. An Application for an Environmental Assessment Certificate has been filed with the B.C. Environmental Assessment Office (EAO), and a formal 180-day review process, including Open Houses, is near completion. The EA Application examines the project's potential impacts, including biophysical, social, economic, heritage and health components. Information on the project, including the EA Application, can be viewed on the EAO website at: www.eao.gov.bc.ca
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