- Capital Power (CPX) has extended the contract for its Alabama Decatur Energy centre by a further 10 years
- Decatur will immediately receive payments for 34 megawatts of additional capacity, and an additional 79 megawatts upon completion of a new interconnection agreement, due in 2021
- The contract extension means Decatur’s power supply has been secured until 2032
- The company acquired the centre in 2017, and has since added a further 60 megawatts of capacity to the facility, with another 30 megawatts planned in 2021
- Capital power (CPX) is up 0.42 per cent and is trading at C$28.45 per share
Capital Power (CPX) has extended the contract for its Alabama Decatur Energy centre by a further 10 years.
The Decatur Energy centre is a natural gas-fired power production facility in Alabama. The deal has secured a buyer for the centre's power until 2032.
Decatur will receive payments for 34 megawatts of additional capacity immediately, and capacity payments up to an additional 79 megawatts upon completion of a new interconnection agreement, due in 2021.
Capital acquired the Decatur centre in 2017, as part of a strategy to secure energy assets with potential beyond their current contracts.
The company sunk a significant amount of time and money into improving Decatur's combustion turbines since it acquired the site, increasing capacity, improving the facility's heat rate and fuel efficiency, to ultimately improve reliability.
Thus far, the company has upgraded two of the three turbines, adding 60 megawatts of capacity. The third turbine is expected to be completed by 2021 and should add another 30 megawatts of capacity.
An interconnection agreement still needs to be finalised and the site’s lines and poles will need to be expanded so that the additional energy can reach nearby communities.
When the company acquired Decatur Energy in 2017, President of Capital Power, Brian Vaasjo believed there was a high probability of re-contracting.
"This 10-year extension validates our acquisition strategy of acquiring mid-life contracted natural gas assets that have a positive outlook for re-contracting and have value beyond the current contract term," he said.
Capital Power (CPX) is up 0.42 per cent and is trading at C$28.45 per share at 10:00 am EDT.