Capital Power Corp. is taking a $53-milion charge to terminate its agreement to buy power from the coal-burning facility near Edmonton
EDMONTON—Capital Power Corp. 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. previously issued notice that it would terminate its power 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.