CALGARY, AB, Aug. 23, 2022 /CNW/ - TransAlta Renewables Inc. (TSX: RNW) ("TransAlta Renewables" or the "Company") is pleased to announce that it has been awarded capacity contracts for the Sarnia cogeneration facility and the Melancthon 1 wind facility with the Ontario Independent Electricity System Operator ("IESO") as part of the IESO's Medium-Term Capacity Procurement Request For Proposals (the "RFP"). The Company's successful proposal will extend the period of contracted revenues of the Sarnia facility to April 30, 2031.
"Recontracting Sarnia with the IESO and our industrial customers was an important and complex initiative for the Company over the last few years that required a cross functional effort and alignment across many stakeholders. We would like to acknowledge the work done by the IESO and our industrial customers in helping us complete the successful recontracting of the electrical capacity of the facility," said Todd Stack, President of TransAlta Renewables.
The Company was awarded the contracts for both the Sarnia facility and the Melancthon 1 wind facility through the competitive RFP process that included a cap on pricing, and which was designed by the IESO to help address electricity supply needs and reliability in Ontario in a cost-effective manner. Although the Company expects gross margin from the Sarnia facility to be reduced by approximately 30 percent per year starting in May 2026 as a result of the price cap under the RFP, the extension to the facility's contracted capacity revenues into 2031 will help ensure the facility continues to supply reliable steam and power to the Company's industrial customers and the IESO beyond 2025. The awarded contracts are expected to be finalized and executed with the IESO by September 20, 2022.
About TransAlta Renewables Inc.:
TransAlta Renewables is among the largest of any publicly traded renewable independent power producers ("IPP") in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 26 wind facilities, 13 hydroelectric facilities, eight natural gas generation facilities, two solar facilities, one natural gas pipeline, and one battery storage project, representing an ownership interest of 2,968 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Pennsylvania, New Hampshire, Wyoming, Massachusetts, Michigan, Minnesota, Washington, North Carolina, and the State of Western Australia.
Forward-Looking Statements:
This news release contains forward looking statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "propose", "plans", "intends" and similar expressions are intended to identify forward looking information or statements. More particularly, and without limitation, this news release contains forward looking statements and information relating to: the finalization and execution of the awarded contract under the IESO's medium term RFP for the Sarnia facility and the Melancthon 1 wind facility and the impact on gross margin at the Sarnia facility. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: changes to government regulations, including as it pertains to the medium term RFP or Ontario's electricity market; operational risks involving our Sarnia facility and the Melancthon 1 wind facility, including unplanned outages at such facilities; disruptions in the source of wind, or gas resources required to operate our facilities; any commercial disagreements or disputes with the IESO or the industrial customers at the Sarnia facility; catastrophes and public health crises, including COVID-19; equipment failure and our ability to carry out repairs in a cost-effective or timely manner, or at all; and other risk factors contained in the Company's Annual Information Form and Management's Discussion and Analysis for the year end dated December 31, 2021, filed under the Company's profile with the Canadian securities regulators on www.sedar.com and the U.S. Securities and Exchange Commission on www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta's expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are to give the reader information about management's current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes and is given as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE TransAlta Renewables Inc
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