On January 9 Atlantic Power Corporation announced revised contractual arrangements for, and operational status of, its Kapuskasing, North Bay and Nipigon facilities in Ontario. The capacity of each plant is 40 megawatts.
Effective for 2017, Atlantic Power Limited Partnership (APLP, a subsidiary of Atlantic Power) has signed Non-Utility Generator (NUG) Enhanced Dispatch Contracts with the Ontario Independent Electricity System Operator for the three facilities. In conjunction with the execution of the new contracts, APLP has agreed to terminate the Power Purchase Agreements with the Ontario Electricity Financial Corporation (OEFC) for the Kapuskasing and North Bay plants, which were scheduled to expire in December 2017, and to suspend for a period, as described below, the Nipigon PPA, which is scheduled to expire in December 2022.
The Enhanced Dispatch Contracts for Kapuskasing and North Bay provide a fixed monthly payment to the plants until December 31, 2017. The contracts have no delivery obligations and allow APLP to retain operating flexibility. Based on its assessment of the Ontario power market, including the estimated impact on plant economics, Atlantic Power has begun the process of mothballing both plants.
The Enhanced Dispatch Contract for Nipigon provides fixed monthly payments to that plant through October 31, 2018. During that period, the plant's PPA with the OEFC will be suspended. At the conclusion of that period, or after that date should that subsequently be agreed to, the arrangement will revert to the existing terms of the PPA. The Company also has begun the process of mothballing Nipigon.
Atlantic Power is committed to working with those employees affected by the decision to mothball the three facilities.
Atlantic Power believes this outcome provides benefits for ratepayers and contributes to the Province’s goal of reducing greenhouse gas emissions. Atlantic Power is continuing to work collaboratively with the relevant parties on other potential initiatives that could result in additional benefits to ratepayers.
Earlier, on December 22, TransAlta Corporation also announced that it had signed a Non-Utility Generator (NUG) Enhanced Dispatch Contract with the IESO for its Mississauga Cogeneration Facility to come into effect on January 1. In conjunction with the execution of the new contract, TransAlta agreed to terminate, effective December 31, 2016, the facility's existing contract with the OEFC, which would have otherwise terminated in December 2018.
The new contract provides TransAlta a fixed monthly payment until December 31, 2018, with no delivery obligations and maintains TransAlta's operational flexibility to pursue opportunities for the Facility to meet power market needs in the Northeast, including Ontario. Additionally, the new contract provides an immediate reduction in greenhouse gas emissions in Ontario, which will help Ontario achieve its GHG targets. TransAlta has committed to working with the employees of the Facility during this transition.