Canadian Utilities sells fossil fuel assets in two deals

Canadian Utilities Ltd. has shaken up the Canadian power sector with the sale Monday of roughly 90 per cent of its fossil fuel-based generating capacity in two deals worth a total of $835 million.

“We’re going to stay involved in the generation business, albeit we are going to look to add newer sources of power,” Canadian Utilities president and CEO Siegfried Kiefer said after selling all of its Canadian coal- and natural-gas fired power plants. He added the company would add “a healthier dose of renewables” in the future.

First, it is selling 11 coal and gas power plants in B.C., Alberta and Ontario with cumulative 2,100 megawatts of generating capacity to a subsidiary of New York-based private equity firm Energy Capital Partner. The private equity giant invests in energy infrastructure and already owns about five per cent of the power generation in the U.S.

Many of the coal-fired power plants sold Monday were in the middle of major repurposing projects to run on natural gas, which emits about half the carbon as coal, to extend the life of the plants.

In the second deal, Canadian Utilities sold its 50-per-cent stake in a 260 MW power plant near Saskatoon to the province’s Crown corporation Saskpower, which said the deal represented an opportunity to take full control of one of its most important assets.

Canadian Utilities, which is 52 per cent owned by Calgary-based ATCO Ltd., did not disclose the values of the individual deals.

“It’s the lion’s share of our generation,” Kiefer said of his company’s two sales, adding that Canadian Utilities will be left with 250 megawatts of power generating capacity in its business.

However, the sales do not represent a complete exit from hydrocarbon forms of energy.

Canadian Utilities continues to own natural gas pipelines and storage facilities in Alberta as well gas-fired power plants in Australia.

It also owns diesel-fired power stations in Yukon and the Northwest Territories, areas where Kiefer said the company is also looking to add renewable power.

Other large Calgary-based power providers have also been transitioning their power generation fleet away from coal to focus on renewable forms of power.

Transalta announced March 25 that Brookfield Renewable Partners would make a $750-million investment that would allow it to speed up its own transition.