TransAlta Corp. and Capital Power Corp. have agreed to swap interests in the Keephills 3 and the Genesee 3 facilities in Alberta.
Their new deal will allow Capital Power to fully own and operate the Genesee 3 facility and TransAlta to fully own and operate the Keephills 3 facility. Both generating units are currently owned and operated under the companies' joint venture agreements.
Keephills 3 is a 463-MW coal-fired generating facility that started commercial operations in 2011. It has been identified by TransAlta a candidate for coal-to-gas conversion.
Genesee 3 is a 466-MW coal-fired power plant that started operating in 2005. It has also been a target for conversion for 100% dual-fuel capability.
Capital Power will make a net payment of approximately C$10 million to TransAlta, subject to working capital adjustments, according to an Aug. 2 news release. The transaction is expected to close in the fourth quarter of 2019, subject to regulatory approvals and other customary conditions.
Capital Power expects the deal to be neutral to adjusted funds from operation "over the medium term," but it anticipates recording a net pretax loss of C$200 million to C$250 million.
"[T]he transaction will streamline costs and processes that are commercial in nature and results in a reduction of regulatory compliance risk," Capital Power President and CEO Brian Vaasjo said.