Capital Power Secures Long-Term Contract with Consumers Energy
EDMONTON, Alberta – Capital Power (TSX: CPX) has announced a significant new long-term contract with Consumers Energy for the Midland Cogeneration Venture (MCV). This contract, which extends to 2040, enhances economic terms and delivers a decade of additional contracted revenue.
About the Midland Cogeneration Venture
MCV stands as the largest natural gas-fired combined electric and steam generation facility in the United States. This facility plays an essential role in the power generation landscape of Michigan. Under the new Power Purchase Agreement (PPA), MCV will provide payments for 1,240 megawatts, around 75% of its capacity, starting in June 2030. This arrangement is expected to create long-term revenue stability and support a projected annual gross increase in adjusted EBITDA of approximately US$100 million.
Impact on Capital Power
Avik Dey, President and CEO of Capital Power, expressed pride in continuing the partnership with Consumers Energy. He emphasized that Michigan represents an attractive and growing electricity market. The newly signed contract marks a crucial milestone for Capital Power, underscoring the vital function of efficient natural gas assets like MCV in ensuring grid reliability amidst rising energy demand.
Insights from Manulife Investment Management
Recep Kendircioglu, Global Head of Infrastructure at Manulife Investment Management, shared his thoughts on the contract, highlighting that investing in assets with stable cash flows is central to their strategy. He affirmed that MCV is critical to the MISO market, and they are pleased to partner with Capital Power in owning the facility.
Continued Commitment to Energy Reliability
Sri Maddipati, President of Electric Supply at Consumers Energy, reiterated the importance of their longstanding relationship with Capital Power through this new PPA. He remarked that MCV has been a dependable energy source for consumers over the years, ensuring continued reliability and cost-effectiveness as both companies transition towards a sustainable energy future.
Strategic Partnerships and Growth
As one of North America's largest independent power producers, Capital Power maintains a robust operational footprint. With approximately 12 GW of generation capacity across 32 facilities, the company is committed to delivering reliable power while pursuing initiatives for lower-carbon power systems. This contract represents their efforts to secure steady cash flows and enhance operational performance through strategic partnerships.
Acknowledging the Future of Energy
Capital Power is passionate about shaping the future of energy through responsible practices and innovative solutions. They aim to foster reliable electrical supply while also broadening their energy portfolio to include more sustainable options. Through agreements like the one with Consumers Energy, they continue to reinforce their reliability as a key energy provider.
Frequently Asked Questions
What is the new contract between Capital Power and Consumers Energy?
The contract extends to 2040 and focuses on the Midland Cogeneration Venture, enhancing economic terms and ensuring stable revenues.
How does this contract impact Capital Power's revenue?
This agreement is projected to increase the facility's adjusted EBITDA by about US$100 million annually.
What role does the Midland Cogeneration Venture play?
MCV is a crucial facility for power generation in Michigan, providing reliable energy and significant contributions to the local energy market.
Who is responsible for managing the facility?
The facility is co-owned by Capital Power and Manulife Investment Management.
What are Capital Power's future goals?
Capital Power aims to enhance its renewable energy portfolio and maintain its role as a reliable power supplier while pursuing sustainable solutions.
For more information, please contact:
Media Relations:
Katherine Perron
(780) 392-5335
kperron@capitalpower.com
Investor Relations:
Noreen Farrell
(403) 461-5236
investor@capitalpower.com
