AltaGas income trust increases power capacity by 25 megawatts
CALGARY--(CCNMatthews - Aug. 31) - AltaGas Income Trust (AltaGas or the
Trust) (TSE:ALA.UN) announced today it has entered into a contract with Maxim
Energy Group Ltd. for the right to 25 megawatts of gas fired power peaking
capacity. The contract requires no capital outlay by AltaGas but instead
requires AltaGas to pay Maxim monthly variable operating and maintenance
charges plus a capacity fee. AltaGas retains 100 percent of the ancillary
service and peaking sales revenues. The contract has a 10 year term
commencing September 1, 2004 and includes an option at the end of the initial
term to extend the term for a further 15 years or purchase the assets.
The 25 megawatts of power is generated by four gas fired peaking plants
located in southern Alberta. AltaGas' total power portfolio now consists of
478 megawatts of power generation representing approximately 6 percent of the
Alberta power market as of June, 2004.
The addition of the 25 megawatts of natural gas generation capacity provides
fuel diversity to AltaGas' coal fired generation. It adds a fifth independent
supply source, reducing any potential risk on the Trust's overall power
supply portfolio. Operationally, given the speed at which the power assets
can be ramped up, the peaking supply easily provides backstopping to AltaGas'
Sundance B Power Purchase Arrangement and Genesee energy contract. The
peaking gas requirement will be managed by the gas services component of
AltaGas does not engage in speculative trading of power. The Trust manages
its acquired power capacity to provide stable, predictable earnings and cash
flow over time. AltaGas reduces its exposure to floating electricity prices
by supplying internal electrical demand requirements and by using a balanced
portfolio of contracts to lock in power margins to reduce pricing risk.
AltaGas moves energy from its source to the end user, adding value through
the process. The Trust has consolidated assets totalling over $950 million
and a market capitalization of approximately $1 billion. Its steadily
expanding asset base today includes natural gas gathering and processing
facilities, interests in ethane and natural gas liquids extraction plants,
and transmission pipelines. AltaGas distributes natural gas to Alberta
customers through AltaGas Utilities Inc., to customers in the Northwest
Territories through the Ikhil Gas Project and distributes gas in Nova Scotia
through its interest in Heritage Gas Limited. The Trust provides energy
services to customers, including marketing of natural gas and natural gas
liquids and sale of power from its power purchase based arrangements.
AltaGas' Trust Units are listed on the Toronto Stock Exchange under the
symbol ALA.UN. The Trust is included in the S&P/TSX Capped Income Trust Index
and the S&P/TSX Capped Energy Trust Index.
When used in this news release, the words "anticipate," "estimate," and
similar expressions are intended to identify-forward looking statements. Such
statements are subject to certain risks, uncertainties and assumptions that
could cause actual results to differ materially from those contemplated in
the forward looking statements. These risks and uncertainties include
operating performance, regulatory and environmental issues, weather and
economic conditions, competition and financing availability. For additional
information on these and other factors see the reports filed by AltaGas with
Canadian securities regulators. AltaGas disclaims any intention or obligation
to update or revise any forward looking information whether as a result of
new information or future event.