Capital Power ditches agreement to buy output of Sundance C coal-fired plant

EDMONTON – Capital Power Corp. (TSX:CPX) is terminating an agreement to buy electricity from the Sundance C coal-fired power plant west of Edmonton in response to a change in provincial regulations that took effect this year.

The Edmonton-based company says it expects to record a non-cash writeoff of the power agreement’s value, amounting to $53 million before taxes and $46 milion after taxes.

However, Capital Power says it expects the termination will have a positive impact on earnings between now and 2020.

Capital Power is the latest company to terminate power purchase agreements with the Sundance power generating operation.

TransCanada Corp. (TSX:TRP) previously issued notice that it would terminate its powers purchase agreements for Sundance A and B, either directly or through its ASTC Power Partnership with AltaGas Pipeline Partnership.

The NDP government of Rachel Notley announced in November that it planned to impose a carbon tax and phase out coal-fired power plants in order to reduce carbon dioxide emissions, a contributor to global warming.