Maxim Power Corp.
TSX : MXG

Maxim Power Corp.

June 25, 2015 14:27 ET

Maxim Power Corp. Provides an Update on the Amended Alberta Specified Gas Emitters Regulation and Announces the Termination of the Ridley Terminal Services Agreement

CALGARY, ALBERTA--(Marketwired - June 25, 2015) - Maxim Power Corp. ("MAXIM" or the "Corporation") (TSX:MXG) announced today the impacts of the amended Alberta Specified Gas Emitters Regulation ("SGER") and termination of the Ridley Terminal Services Agreement.

Amended Specified Gas Emitters Regulation

Under SGER in Alberta, large emitters of carbon dioxide ("CO2") are incented to lower the intensity level of their emissions relative to facility-specific baselines. Emitters that exceed their baseline less a 12% mandatory stringency adjustment ("adjusted baseline") are required to purchase emission performance credits in the market or purchase emission fund credits from the Province for each tonne of CO2 in excess of their adjusted baseline. Emitters that emit less than their adjusted baseline are able to sell emission performance credits based on the number of tonnes of CO2 not emitted below their adjusted baseline. Intensity for electrical generating facilities is measured in tonnes of CO2 emitted per megawatt-hour produced.

On June 25, 2015, the Government of Alberta announced that it is amending SGER. The price for emission fund credits increases from $15 per tonne of CO2 to $20 per tonne on January 1, 2016 and then to $30 per tonne on January 1, 2017. Over that same period, intensity reduction stringencies will move from the current level of 12% below the baseline to 15% on January 1, 2016 and then 20% on January 1, 2017.

MAXIM is well positioned under the amended regulation. HR Milner ("Milner") has the flexibility of burning natural gas and coal to manage adherence to its intensity baseline and create resalable emission performance credits. The increased cost of emission fund credits is expected to drive an increase in the market price for emission performance credits as either form of credit can be used to satisfy an emitter's obligations under the regulation. This change, coupled with the previously announced changes on June 10, 2015 to position Milner as a low cost producer of electricity in Alberta, is expected to mitigate any adverse impact associated with the stringency reduction. It is anticipated that increases in industry-wide SGER compliance costs will result in higher Alberta power prices that will ultimately be borne by Alberta power consumers.

MAXIM also considers its Buffalo Atlee wind power development project to be a hedge against further potential changes to emission legislation in Alberta. This project has the potential for development of over 200 MW of wind generation capacity. The addition of wind generation to MAXIM's existing portfolio of assets would diversify MAXIM's generation fuel types and provide the potential to offset the impact of expected new provincial greenhouse gas legislation.

Termination of Ridley Terminal Services Agreement

MAXIM also announced today that it has entered into a Termination and Mutual Release Agreement ("Termination Agreement") that cancels the Terminal Services Agreement between Ridley Terminals Inc. and MAXIM's wholly owned subsidiary, Summit Coal Limited Partnership ("Summit"). The TSA was entered into on December 9, 2011 and provided Summit with capacity at Ridley Terminals to ship coal through this port for a period of ten years. Pursuant to the Termination Agreement, MAXIM foregoes certain benefits under the TSA while eliminating contractual commitments of $63.2 million.

About MAXIM

Based in Calgary, Alberta, MAXIM is an independent power producer, which acquires or develops, owns and operates innovative and environmentally responsible power and power related projects. MAXIM currently owns and operates 39 power plants in Alberta, the United States and France, having 778 MW of electric generating capacity. MAXIM trades on the TSX under the symbol "MXG". For more information about MAXIM, visit our website at www.maximpowercorp.com.

Statements in this release which describe MAXIM's intentions, expectations or predictions, or which relate to matters that are not historical facts are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of MAXIM to be materially different from any future results, performances or achievements expressed in or implied by such forward-looking statements. MAXIM may update or revise any forward-looking statements, whether as a result of new information, future events or changing market and business conditions and will update such forward-looking statements as required pursuant to applicable securities laws.

Contact Information

  • Maxim Power Corp.
    John R. Bobenic
    President and CEO
    (403) 750-9300

    Maxim Power Corp.
    Michael R. Mayder
    Senior Vice President, Finance and CFO
    (403) 750-9311
    www.maximpowercorp.com