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ENMAX terminates Keephills power purchase arrangement


May 12, 2016 – ENMAX is terminating its Keephills power purchase arrangement under the PPA’s Change in Law provision, which allows the PPA buyer to terminate an arrangement when there is a change in law that makes the agreement unprofitable or more unprofitable.

With respect to the Keephills (which burns coal) PPA, the change in the costs under the Specified Gas Emitters Regulation made this PPA more unprofitable than it already was, reports ENMAX, so the right to terminate was triggered.

This decision results in ENMAX recording an impairment charge of $51 million, which represents the remaining book value of the original investment in the PPA, says the utility. Combined with the 2015 write-down of $144.5 million from the termination of the Battle River PPA, ENMAX has now incurred a financial impact of $195.4 million in impairment charges as a result of terminating its two coal PPAs.

ENMAX says it remains supportive of the government’s vision to reduce greenhouse gas emissions in Alberta.