Northland Power Income Fund
TSX : NPI.UN
TSX : NPI.DB
TSX : NPI.DB.A

Northland Power Income Fund

February 08, 2010 08:55 ET

Northland Power to Build $700 Million Baseload Power Plant in Saskatchewan

TORONTO, ONTARIO--(Marketwire - Feb. 8, 2010) -

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Northland Power Income Fund (the "Fund") (TSX:NPI.UN)(TSX:NPI.DB)(TSX:NPI.DB.A) announced today that a wholly-owned subsidiary has entered into a 20-year Power Purchase Agreement (PPA) with the Saskatchewan Power Corporation to build and own a new natural-gas-fired power plant to provide baseload power to the Saskatchewan energy system.

The 261 megawatt natural-gas-fired combined cycle plant will be built near North Battleford, Saskatchewan, about 150 km north-west of Saskatoon. All power produced by the plant will be sold under the PPA to SaskPower. The plant will use a General Electric gas turbine with associated heat recovery and a steam turbine to produce the electricity. Construction is expected to begin in July 2010, and the plant is scheduled to begin commercial operations in 2013. The total cost of the project is budgeted at approximately $700 million.

"We are very pleased that SaskPower has again shown its confidence in Northland Power and selected us as their partner to help meet their needs for reliable generation capacity", said John Brace, CEO of the Fund. "With construction of our peaking plant near Spy Hill to begin in the spring, this will further strengthen our presence in Saskatchewan and allow us to participate in the province's continued growth. We are very confident that the North Battleford facility, modeled closely on our cogeneration plant that is about to begin commercial operations in Thorold, Ontario, will satisfy SaskPower's requirements in an efficient and economical manner."

Under the PPA, the project will receive monthly payments that are designed to cover all fixed costs and investment returns. The PPA also provides protection against changes in the market price of natural gas, as fuel costs are passed through to SaskPower. Northland Power will be responsible for operating the plant to achieve specified efficiency and reliability levels. The contractual structure of the project is designed to ensure predictable, stable and sustainable cash flows over the entire 20-year term of the PPA. The Fund intends to finance the project largely using non-recourse project debt, its line of credit and cash on hand.

The North Battleford project is one of the greenfield development projects acquired by the Fund through its July 2009 merger with Northland Power Inc. The Fund will continue to develop the assets in the portfolio, as well as looking to add new 'Clean and Green' acquisitions and projects.

In other developments, the Fund has concluded arrangements with its banking syndicate to increase its committed line of credit available for investments and acquisitions to $130 million.

ABOUT THE FUND

Northland Power Income Fund is a Canadian income trust that has ownership or economic interests in 10 power projects totaling over 1,100 megawatts ("MWs") (net 872 MWs). The Fund's assets comprise natural-gas-fired plants which efficiently and cleanly produce electricity and steam as well as facilities generating renewable energy from wind and biomass. Sales are made almost entirely under long-term contracts with a current average duration of 14 years. The Fund's plants are located in Canada, the United States and Germany. In addition, the Fund's 86 MW Spy Hill project and the 261 MW North Battleford facility are in advanced stages of development. The Fund also has a diverse development portfolio of high-quality 'Clean and Green' energy projects, including wind, solar, natural gas, and hydro assets that supports the Fund's strategy of sustainable growth primarily through internally developed opportunities.

The Fund's trust units and two series of convertible debentures, which trade on the Toronto Stock Exchange under the symbols NPI.UN, NPI.DB and NPI.DB.A respectively, are qualified investments for RRSPs and DPSPs under the Canadian Income Tax Act. The Fund has in place a distribution re-investment plan that allows Unitholders who are residents of Canada to automatically have their monthly cash distributions reinvested in additional units. Participants do not pay any costs associated with the plan, including brokerage commissions. For further information or to join the plan, contact your financial advisor or broker.

Contact Information

  • Northland Power Income Fund
    John Brace
    President & Chief Executive Officer
    416-962-6262 x 115
    or
    Northland Power Income Fund
    Boris Balan
    Director, Communications & Business Development
    416-962-6262 x 116
    or
    Northland Power Income Fund
    Barb Bokla
    Manager, Investor Relations
    416-962-6262 x 156
    416-962-6266 (FAX)
    info@NPIFund.com
    www.NPIFund.com