November 20, 2023

Capital Power Announces Strategic Acquisition of Two Contracted Combined-Cycle U.S. Gas Generation Facilities and a $400 Million Subscription Receipts Offering

US$1.1 billion (~$1.5 billion) acquisition will be immediately accretive to adjusted funds from operations per share

Acquisition Highlights

  • New casino games La Paloma and Harquahala are critical infrastructure assets, which support the reliability of California and Arizona’s electricity grids and add further growth opportunities in the attractive WECC1 market
  • Attractive Valuation: 4.8x 2024E Adjusted EBITDA2 and 5.4x 5-year average Adjusted EBITDA2 acquisition multiples
  • Immediately Accretive: expected to be accretive to AFFO per share in the first full year of ownership and expected 5-year average accretion of 8%2
  • Expands Leadership Position in North America: adds 1.6 GW (net) of gas-fired generation capacity in the U.S., making Capital Power the 5th largest non-regulated operator of flexible and reliable gas-fired generation in North America3 , and balances the company’s geographical footprint across Canada and the U.S.
  • Broadens Institutional Partnerships: 50/50 partnership with BlackRock, through a fund managed by BlackRock’s Diversified Infrastructure business, to own Harquahala and a private placement investment from Alberta Investment Management Corporation (“AIMCo”) in Capital Power equity
  • Prudent Financing Plan: concurrent $400 million subscription receipt offering via a $300 million public bought offering and a $100 million private placement to AIMCo is expected to fully address Capital Power’s discrete equity funding for the acquisitions with the remaining funding plan preserving Capital Power’s strong financial flexibility and investment grade rating
  1. Western Electricity Coordinating Council
  2. See Non-GAAP Financial Measures and Ratios.
  3. Based on net unregulated capacity utilizing S&P Global Market Intelligence database of gas-fired generation operators (November 2023) and referenced against publicly disclosed sources where available. Capital Power’s status as the 5th largest operator of flexible and reliable gas-fired generation in North America includes its previously announced acquisition of the Frederickson 1 Generating Station.

EDMONTON, Alberta – November 20, 2023 – Capital Power Corporation (“Capital Power” or the “Company”) (TSX: CPX) announced today that it has entered into two separate definitive agreements with CSG Investments, Inc., a subsidiary of Beal Financial Corporation, to acquire:

  1. 100% of the equity interests in CXA La Paloma, LLC (“La Paloma”), which owns the 1,062 MW La Paloma natural gas-fired generation facility in Kern County, California (the “La Paloma Acquisition”); and
  2. under a newly formed 50/50 partnership between Capital Power Investments, LLC and an affiliate of a fund managed by BlackRock’s Diversified Infrastructure business (“BlackRock”), 100% of the equity interests in New Harquahala Generation Company, LLC (“Harquahala”), which owns the 1,092 MW Harquahala natural gas-fired generation facility in Maricopa County, Arizona (the “Harquahala Acquisition” and together with the La Paloma Acquisition, the “Acquisitions”).

Under the newly established 50/50 partnership, Capital Power and BlackRock will each be responsible for funding 50% of the cash consideration for the Harquahala Acquisition. Capital Power will be responsible for the operations New casino sitesand maintenance and asset management for which it will receive an annual management fee.

The net purchase price of the Acquisitions attributable to Capital Power is expected to be US$1.1 billion (~$1.5 billion), subject to working capital and other customary closing adjustments. The Acquisitions are each expected to close in the first quarter of 2024, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions.

Following the closing of the Acquisitions and accounting for Capital Power’s previously announced acquisition of the Frederickson 1 Generating Station, the Company’s flexible and reliable gas-fired generation fleet is expected to be the 5th largest in North America4 and have a balanced geographic footprint across Canada and the U.S. on a net operating capacity basis. The Acquisitions are consistent with Capital Power’s strategy to acquire contracted gas-fired generation assets that are strategically positioned within their markets and create additional growth opportunities for both the Company’s gas-fired and renewable generation businesses. Capital Power will leverage its deep knowledge and experience in plant operations to commercially optimize these assets and help drive long-term value as part of its broader fleet.

The Acquisitions reflect an attractive entry valuation of 4.8x 2024E Adjusted EBITDA5, below the historical average of transactions Capital Power has announced in the same asset class. The Acquisitions are expected to generate average annual Adjusted EBITDA of approximately $265 million5 for the 2024-2028 period and are estimated to be, on average, 8%5 accretive to AFFO per share over the same period, based on expected permanent financing.

“Capital Power’s acquisition of La Paloma and the partnership in Harquahala’s gas generation assets marks a significant milestone in our strategic growth,” said Avik Dey, President and Chief Executive Officer of Capital Power. “These plants are well positioned to bolster our current portfolio and align with our commitment to providing reliable, affordable power solutions that support a balanced approach to the energy transition. This acquisition further unlocks an interesting market opportunity in WECC, where we can play a leading role in supporting the shift to low-carbon energy solutions through offering reliable generation while we grow our own renewables fleet. Lastly, this transaction underscores our dedication to delivering long-term value to our shareholders and advancing our position as a leader in the power generation sector.”

“We are pleased with how this strategic investment fully aligns with our financial objectives. The acquisition of La Paloma and the partnership in Harquahala offer an attractive entry point in the WECC market, are immediately accretive and maintains our investment grade credit ratings and balance sheet strength.” said Sandra Haskins, SVP Finance and Chief Financial Officer of Capital Power.

“We are excited to partner with Capital Power for the acquisition of Harquahala, an efficient natural gas-fired power plant, which benefits from a contract for 100 percent of the plant’s capacity through 2031 with an investment grade utility,” said Mark Florian, Head of BlackRock’s Diversified Infrastructure Group. “This acquisition is consistent with our strategy of partnering with high-quality operators to acquire and manage contracted critical infrastructure that is essential to meet the growing demand for efficient, affordable and reliable energy.”

“AIMCo is pleased to participate in this private placement, which provides our clients with a compelling opportunity to invest in a high-quality company that is pursuing robust growth, diversification, and decarbonization strategies,” said David Tiley, Managing Director, Public Equities at AIMCo.

Net proceeds from Capital Power’s concurrent $400 million subscription receipt offering, as further outlined below, is expected to fully address the planned discrete equity funding for the Acquisitions. The remaining funding requirements are expected to be addressed via senior and hybrid debt financing at the corporate level, subject to market conditions. Capital Power’s contemplated funding plan preserves New casino sitesits strong balance sheet and financial flexibility.

Subscription Receipt Offering

The Company has entered into an agreement with a syndicate of underwriters (the “Underwriters”) led by TD Securities Inc. and National Bank Financial Inc. to issue 8,231,000 subscription receipts (the “Subscription Receipts”), on a bought deal basis, at an issue price of $36.45 per Subscription Receipt (the “Offering Price”), for total gross proceeds of approximately $300 million (the “Public Offering”). The Company has granted the Underwriters an over-allotment option to purchase, in whole or part, up to an additional 1,234,650 Subscription Receipts at the Offering Price to cover over-allotments, if any, exercisable at any time and from time to time until the date that is 30 days following the closing of the Offering. If the over-allotment option is exercised in full, gross proceeds from the Public Offering will be approximately $345 million.

Additionally, the Company will issue, at the Offering Price, 2,745,000 subscription receipts to AIMCo on a private placement basis (the “Private Placement”), for gross proceeds of approximately $100 million. The subscription receipts sold pursuant to the Private Placement and the underlying Common Shares (defined below) will be subject to a statutory hold period of 4 months from the closing date of the Private Placement. TD Securities Inc. is acting as sole agent and sole bookrunner on the Private Placement.

Each Subscription Receipt will entitle the holder thereof to receive, without payment of additional consideration or further action, upon the first to close of the Acquisitions, one common share of Capital Power (a “Common Share”).

In addition, while the Subscription Receipts remain outstanding, holders will be entitled to receive cash payments (“Dividend Equivalent Payments”) per Subscription Receipt equal to dividends declared by Capital Power on each Common Share. Such Dividend Equivalent Payments will have the same record date as the related Common Share dividend and will be paid to holders of Subscription Receipts concurrently with the payment date of each such dividend. The Dividend Equivalent Payments will be made regardless of whether or not the Acquisitions are completed. If both of the Acquisitions are not completed prior to April 30, 2024, or in certain other events, then the subscription price for the Subscription Receipts will be returned to holders of Subscription Receipts, together with any (i) unpaid Dividend Equivalent Payments or (ii) if no Dividend Equivalent Payment is payable prior to such occurrence, any pro-rata interest on such funds and such holder’s pro-rata share of the interest that would have been earned on the initial Underwriters’ fee payment as if such payment had been held in escrow as part of the escrowed funds and not paid to the Underwriters.

The gross proceeds of the Public Offering and the Private Placement, less the portion of the Underwriters’ fee that is payable on New casino sitesclosing of the Public Offering and the applicable commitment fee with respect to the Private Placement, will be held in escrow and, after payment of applicable fees and expenses upon the first to close of the Acquisitions, are intended to be used by Capital Power to fund a portion of the purchase price for the Acquisitions. In the event that only one of the Acquisitions is completed, the balance of the proceeds from the Public Offering and Private Placement may be used by the Company to repay, redeem or refinance existing indebtedness, including indebtedness under the Company’s credit facilities, or for general corporate purposes.

The Public Offering will be offered in all provinces and territories of Canada by way of a prospectus supplement dated November 22, 2023 to Capital Power’s base shelf prospectus dated June 10, 2022. Completion of the Public Offering and Private Placement are subject to certain conditions including receipt of all necessary approvals, including the approval of the Toronto Stock Exchange. The closings of the Public Offering and Private Placement are anticipated to occur on or about November 28, 2023. The closing of the Private Placement is conditional on the concurrent New casino sitesclosing of the Public Offering and closing of the Public Offering is conditional on the concurrent closing of the Private Placement.

The above is a summary of the Public Offering. For further information, please refer to the term sheet filed on Capital Power’s SEDAR+ profile ( and the prospectus supplement qualifying the offering of Subscription Receipts, which will be filed on SEDAR+.

This announcement does not constitute an offer of securities for sale in the United States, nor may any securities referred to herein be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act), and the rules and regulations thereunder. The securities referred to herein have not and will not be registered under the U.S. Securities Act or any state securities law, and except pursuant to exemptions from registration requirements of the U.S. Securities Act or any state securities laws, there is no intention to register any of the securities in the United States or to conduct a public offering of securities in the United States. Such securities may be offered in the United States only to “qualified institutional buyers” (as defined in and in reliance on Rule 144A under the U.S. Securities Act).

Update on Timing of 2024 Guidance Release

Capital Power intends to announce its 2024 guidance in January 2024 and guidance for adjusted EBITDA, AFFO and capital expenditures will be presented on a pro forma basis to reflect the Acquisitions, the recent acquisition of Frederickson 1 Generating Station and organic growth investments. Additionally, Capital Power will host its Investor Day in Edmonton, Alberta on May 7 and 8, 2024. Further details about the La Paloma and Harquahala assets will be shared at the Investor Day event.

Teleconference Call

Analysts, investors and members of the media are invited to take part in a webcast on Monday, November 20, 2023 at 2:45 PM Mountain time (4:45 PM Toronto/Montreal/New York). The webcast can be accessed at:

View Webcast


TD Securities Inc. and J.P. Morgan are acting as financial advisors and Winston & Strawn LLP and Simpson Thacher & Bartlett LLP are acting as legal advisors to Capital Power and BlackRock with respect to the Acquisitions. PEI Global Partners LLC is acting as sole financial advisor and White & Case LLP is acting as legal advisor to CSG Investments, Inc.

Facilities Overview

La Paloma Harquahala
Nameplate Capacity: 1,062 MW 1,092 MW
Location: Kern County, California Maricopa County, Arizona
Commercial Operation Date: 2003 2004
Commercial Arrangement: Resource adequacy contracts through 2029 with multiple investment grade utilities and load serving entities 100% contracted tolling agreement through 2031 with an investment grade utility
Equipment: 4 Alstom GT24B CTs
4 Alstom/CE HRSGs
4 Alstom VAX STs
3 Siemens 501G CTS
3 Nooter/Erikson HRSGs
3 Siemens STs
Availability6: 93.7% 98.8%
Natural Gas Source: Mojave Pipeline Company LLC El Paso Natural Gas Company LLC
Interconnection: PG&E SRP; existing unutilized interconnection capacity includes 1,100 MW at the Hassayampa substation
Site: 443 acres total with 412 acres available for development 640 acres total with 496 acres available for development


All references to dollar amounts contained herein are to Canadian dollars unless otherwise indicated. Where applicable, converted between USD and CAD at the prevailing spot rate of 1.3722 as at close on November 17, 2023.

Non-GAAP Financial Measures and Ratios

The Company uses (i) earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from its joint venture interests, gains or losses on disposals and unrealized changes in fair value of commodity derivatives and emission credits (Adjusted EBITDA) and (ii) AFFO as financial performance measures.

The Company also uses AFFO per share as a performance measure. This measure is a non-GAAP ratio determined by applying AFFO to the weighted average number of common shares used in the calculation of basic and diluted earnings per share.

These terms are not defined financial measures according to GAAP and do not have standardized meanings prescribed by GAAP and, therefore, are unlikely best new online casinoto be comparable to similar measures used by other enterprises. These measures should not be considered alternatives to net income, net cash flows from operating activities or other measures of financial performance calculated in accordance with GAAP. Rather, these measures are provided to complement GAAP measures in the analysis of the Company’s results of operations from management’s perspective.

See Non-GAAP measures and ratios in the Company’s third quarter management’s discussion and analysis for the three and nine months ended September 30, 2023, and the Company’s 2022 Integrated Annual Report, which are available under the Company’s profile on SEDAR+ at and on the Company’s website at, for further discussion of these metrics and reconciliations of Adjusted EBITDA and AFFO to net income and net cash flows from operating activities, respectively.

A reconciliation of net cash flows from operating activities to AFFO resulting from the Acquisitions is as follows:

(unaudited, $ millions)7 2024E
Increase in net cash flows from operating activities resulting from the Acquisitions  $130
Add items included in calculation of net cash flows from operating activities:
Interest paid 57
Income taxes paid 37
Distributions received from joint venture (26)
Net finance expense (58)
Current income tax expense (37)
Changes in non-cash operating working capital 15
Sustaining capital expenditures (22)
AFFO from joint venture 35
Increase in AFFO resulting from the Acquisitions $131


A reconciliation of Adjusted EBITDA to net income resulting from the Acquisitions is as follows:

(unaudited, $ millions)7 2024E
Increase in adjusted EBITDA resulting from the Acquisitions8,9, $285
Depreciation and amortization 9, 10, (87)
Net finance expense 9 (74)
Income tax expense 9 (34)
Increase in net income resulting from the Acquisitions $90
  1. Based on net unregulated capacity utilizing S&P Global Market Intelligence database of gas-fired generation operators (November 2023) and referenced against publicly disclosed sources where available. Capital Power’s status as the 5th largest operator of flexible and reliable gas-fired generation in North America includes its previously announced acquisition of the Frederickson 1 Generating Station.
  2. See Non-GAAP Financial Measures and Ratios.
  3. Measured as availability less forced outage factor (1-FOF) while under contract, excluding planned outages.
  4. 2024E items converted from USD to CAD using a 1.3240 FX rate, reflective of consensus estimates for 2024.
  5.  Adjusted EBITDA shown here is net of Acquisitions’ transaction fees of $9M. Adjusted EBITDA before Acquisitions’ transaction fees is $294M (or US$222M), which underlies a 4.8x EV / Adj EBITDA (2024) multiple.
  6. Includes contribution from Capital Power’s interest in joint ventures.
  7. Depreciation and amortization is subject to change on finalization of purchase price allocation and closing adjustments.

Forward-looking Information

Certain information in this news release is forward-looking within the meaning of Canadian securities law as it relates to anticipated financial and operating performance, events or strategies. The forward-looking information or statements are provided to inform the Company’s shareholders and potential investors about management’s assessment of Capital Power’s future plans and operations. This information may not be appropriate for other purposes. The forward-looking information in this press release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes.

Material forward-looking information in this press release includes: (i) expectations regarding the Acquisitions and the characteristics, value drivers, anticipated benefits (including expected Adjusted EBITDA contribution, AFFO, AFFO per share accretion and positioning for potential re-contracting), operational impacts (including to the Company’s net gas-fired operating capacity and geographic diversification) and credit impacts thereof, on a standalone and pro forma basis; (ii) expectations regarding future growth and emerging opportunities in, and characteristics of, relevant markets; (iii) expectations regarding the Company’s partnership and commercial arrangements with BlackRock with respect to Harquahala; (iv) expectation regarding the Company’s financing plans, transaction closing time, receipt of required regulatory approvals, and future development opportunities with respect to the Acquisitions; (v) expectations regarding the Company’s sources of funding, adequacy and availability of committed bank facilities and future borrowings; (vi) plans to add renewables generation to the Company’s fleet; (vii) expectations regarding the Company’s future cash requirements including New online casinosdividends and distributions, (viii) expectations regarding the Public Offering and the Concurrent Private Placement and the timing of the closings thereof; (ix) expectations regarding the use of proceeds of the Public Offering and the Concurrent Private Placement; (x) expectations regarding the exercise of the Underwriters’ over-allotment option; (xi) receipt of all regulatory approvals for the Public Offering and the Concurrent Private Placement; (xii) the characteristics of the subscription receipts; and (xiii) updated timing of the Company’s 2024 earnings guidance release.

These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate, including its review of the Acquisitions and re-contracting opportunities. The material factors and assumptions used to develop these forward-looking statements relate to: (i) electricity and other energy prices, (ii) anticipated performance of La Paloma and Harquahala, (iii) re-contracting opportunities, (iv) status of and impact of policy, legislation and regulations, (v) effective tax rates, (vi) anticipated facility performance, (vii) financing assumptions, including indebtedness and anticipated interest rates, and (viii) anticipated sustaining capital expenditures at the facilities.

Whether actual results, performance or achievements will conform to the Company’s expectations and predictions are subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company’s expectations. Such material risks and uncertainties are: (i) changes in electricity, natural gas and carbon prices in markets in which Capital Power operates and the use of derivatives; (ii) regulatory and political environments including changes to environmental, climate, financial reporting, market structure and tax legislation; (iii) disruptions, or price volatility within our supply chains; (iv) generation facility availability, wind capacity factor and performance including maintenance expenditures; (v) ability to fund current and future capital and working capital needs; (vi) acquisitions (including the Acquisitions) and developments including timing and costs of regulatory approvals and construction; (vii) changes in the availability of fuel; (viii) ability to realize the anticipated benefits of acquisitions (including the Acquisitions); (ix) limitations inherent in the Company’s review of acquired assets; (x) changes in general economic and competitive conditions, including inflation; (xi) changes in the performance and cost of technologies and the development of new technologies, new energy efficient products, services and programs; and (xii) the risks and uncertainties discussed under the heading Risks and Risk Management in the Company’s 2022 Integrated Annual Report.

Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the specified approval date. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

Territorial Acknowledgement

In the spirit of reconciliation, Capital Power respectfully acknowledges that we operate within the ancestral homelands, traditional and treaty territories of the Indigenous Peoples of Turtle Island, or North America. Capital Power’s head office is located within the traditional and contemporary home of many Indigenous Peoples of the Treaty 6 Territory and Métis Nation of Alberta Region 4. We acknowledge the diverse Indigenous communities that are located in these areas and whose presence continues to enrich the community.

About Capital Power

Capital Power is a growth-oriented power producer committed to net zero by 2045. Our balanced approach to the New online casinosenergy transition prioritizes reliable, affordable and decarbonized power that communities across North America can depend on.

Capital Power owns approximately 7,500 megawatts (MW) of power generation capacity at 29 facilities across North America. Projects in advanced development include approximately 213 MW of renewable generation capacity in Alberta and North Carolina, 512 MW of incremental natural gas combined cycle capacity from the repowering of Genesee 1 and 2 in Alberta, and approximately 350 MW of natural gas and battery energy storage systems in Ontario.