Published: January 4, 2016 |

[Click image to enlarge]

Atlantic Power Corporation has signed an agreement with Equistar Chemicals, LP, a subsidiary of LyondellBasell, to modify and extend the energy services agreement (ESA) for its Morris project from November 2023 to December 2034. The facility’s ground lease and equipment leases also have been extended to the ESA expiration date. The changes to the ESA became effective January 1, 2016.

“The modified agreement extends our relationship with an important customer while also extending our presence and participation in the PJM power market,” said James J. Moore, Jr., president and chief executive officer of Atlantic Power.

Morris is a 177 megawatt (MW) natural gas combined-cycle facility that entered commercial operation in 1998. The project is located in Morris, Illinois, approximately 60 miles from Chicago, and is in the ComEd zone of PJM. Equistar is the primary customer for the project’s steam output. The remaining capacity and energy as well as ancillary services are sold into the PJM market.

Separately, and not related to the ESA modifications and extension, the company expects that Morris will undergo an approximately six-week major maintenance outage in the late summer of 2016. Morris is also expected to undergo a shorter routine outage in the spring. During these outages, the company will continue work on upgrades to the project’s combustion turbines and steam turbine generator, which are expected to enhance availability and reliability. Higher maintenance expense associated with both outages and lost margin during the longer outage, as well as other less significant factors, are expected to reduce project adjusted EBITDA from the Morris project by approximately 60 percent in 2016 from an above-average level in 2015.

The extension of the Morris ESA increases the average remaining life of the company’s power purchase agreements (PPAs) from 7.2 years to 7.6 years (on an EBITDA-weighted basis). 

“We expect the changes to the ESA will result in modestly higher project adjusted EBITDA from Morris on average relative to the original contract. The terms of this amendment and extension were achieved despite very challenging power market conditions. This is an indication of the value of reliable, well-located projects and strong customer relationships,” said Moore.

“Now that we have significantly reduced our debt and overhead costs, we are in a better financial position to be patient and disciplined in considering PPA extensions depending on customer needs, market conditions and terms,” added Moore.

About Atlantic Power
Atlantic Power owns and operates a diverse fleet of power generation assets in the United States and Canada. The company’s power generation projects sell electricity to utilities and other large commercial customers largely under long-term power purchase agreements, which seek to minimize exposure to changes in commodity prices. Atlantic Power’s power generation projects in operation have an aggregate gross electric generation capacity of approximately 2,141 MW, in which its aggregate ownership interest is approximately 1,504 MW. The company’s current portfolio consists of interests in 23 operational power generation projects across nine states in the United States and two provinces in Canada.

To stop by Atlantic Power’s website, CLICK HERE

Be in-the-know when you’re on-the-go!

FREE eNews delivery service to your email twice-weekly. With a focus on lead-driven news, our news service will help you develop new business contacts on an on-going basis.
CLICK HERE to register your email address.

Copyright © 2016 Mining Connection LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

For licensing permission, .(JavaScript must be enabled to view this email address)