Algonquin Power & Utilities Corp T.AQN

RBC

[retiredcf]

May 10, 2022

Outperform

NYSE: AQN; USD 13.55; TSX: AQN

Price Target USD 17.00

All values in USD unless otherwise noted.
Priced as of prior trading day's market close, EST (unless otherwise noted).

Algonquin Power & Utilities Corp.

112 MW Deerfield II wind development signs PPA with Meta
Sentiment: Neutral

Our view: We believe the corporate PPA with Meta builds on the company's track record of working with a range companies to green their energy consumption. The corporate PPA is consistent with Algonquin's strategy of developing contracted renewable energy projects. We expect management to provide an update on the rest of its development pipeline when Algonquin releases Q1/22 results on May 12 and hosts their conference call on May 13 (10:00AM ET).

First impression:

Corporate PPA signed with Meta. Algonquin announced that it has signed a long-term corporate PPA with Meta for 100% of the production and environmental attributes of its 112 MW Deerfield II wind development in Michigan. Algonquin's operating 80 MW Altavista solar facility in Virginia currently sells the majority of its power to Meta, so the latest corporate PPA builds on their existing relationship.

$200 million project to be completed in 2023. The Deerfield II wind project will be located adjacent to Algonquin's 150 MW Deerfield I wind facility. Management estimates that the project cost will total ~$200 million, and construction commenced in April 2022, with completion scheduled for 2023.