Toronto: Northland Power Inc. released an update January 12 on developments at several of its Canadian power projects.
Kirkland Lake Generating Station (Ontario, 132 MW): Kirkland Lake Power Corporation, an affiliate of Northland, has signed a new 20 year contract with the Ontario Power Authority (now merged with the Independent Electricity System Operator) for the 30 MW gas peaking portion of the generating station. The existing peaking contract was due to expire in August 2015. The new contract provides stable revenues to KLPC until August 2035. Negotiations are continuing with the Ontario Electricity Financial Corporation (OEFC) for the baseload, gas-fueled portion of the Kirkland Lake facility, which has pricing provisions expiring August 2015.
Cochrane Generating Station (Ontario, 42 MW): The OEFC and Cochrane Power Corporation, an affiliate of Northland, have agreed to extend CPC’s existing revenue contract to May 2015 from its current expiry in January 2015. The extension provides additional time for CPC to negotiate a new long term contract with the IESO for CPC’s natural gas and biomass facility.
Phase III Ground-Mounted Solar Projects (Ontario, 40 MW): Northland has signed a purchase and sale agreement with Taykwa Tagamou Nation and Wahgoshig First Nation that, once closed, will provide the First Nations with a combined 37.5% equity interest in Northland’s four Phase III solar projects located in northern Ontario. The total consideration for the equity interest is approximately $45.6 million, approximately a third of which will be a vendor take-back loan. These are the final four projects in Northland’s 13 ground-mounted solar project portfolio that remain under construction. Closing of the sale is contingent on the achievement of certain conditions and receipt of third party approvals.
In late December 2014, Northland Power terminated its engineering, procurement and construction contract with H.B. White Canada Corporation related to the construction of the four 10 MW Phase III solar projects. Ganotec Inc, a subsidiary of Peter Kiewit Sons Co. Ltd., has been engaged to assist with the completion of the projects. Northland expects the overall project completion schedule to be met, although the final project costs are being reviewed and may increase from the $246 million previously disclosed. Notwithstanding any potential increase, Northland expects the projects to continue to exceed Northland’s return requirements.
Frampton Wind Project (Quebec, 24 MW): Northland has signed a purchase and sale agreement to sell Northland’s 66.7% interest in the advanced stage development project located in Frampton, Quebec to Boralex Inc. Total consideration for the interest is approximately $11.5 million. Completion of the sale is conditional on the achievement of certain conditions and receipt of third party approvals. Desjardins Capital Markets acted as financial advisor to Northland on the transaction.
Additional details will be made available upon release of Northland’s consolidated 2014 results after market close on February 18, 2015.