Atlantic Power To Sell Manchief Power Plant To Public Service Co. Of Colorado

(RTTNews) - Atlantic Power Corp. (AT, ATP.TO) said Monday that it has agreed to sell its Manchief power plant to Public Service Co. of Colorado or PSCo for $45.2 million, subject to working capital and other customary adjustments.

PSCo, a subsidiary of Xcel Energy, Inc. (XEL), is the current customer under the Manchief Power Purchase Agreement or PPA. Atlantic Power expects closing of the sale to occur in May 2022, following the expiration of the PPA.

Manchief entered commercial operation in July 2000 and is an approximately 300 megawatt gas-fired peaking facility. Under the terms of the PPA, the plant is dispatchable by the customer.

In November 2017, Atlantic Power submitted several proposals in PSCo's 2017 All-Source Solicitation for its longer-term energy supply needs. In June 2018, PSCo notified the company that it had selected the proposal under which it would acquire Manchief from the company at the end of the PPA term.

The sale is subject to receipt of regulatory approvals from the Colorado Public Utilities Commission and the Federal Energy Regulatory Commission, which are expected within approximately 11 months of filing.

Atlantic Power said it expects to use proceeds of the sale to reduce the remaining principal amount of its senior secured term loan.

James Moore, Jr., President and CEO of Atlantic Power said, "By retaining Manchief for the next three years, we will continue to realize the cash flows for the remaining PPA term. In addition, upon expiration of the PPA in 2022, the sale of the plant will provide us with a cash purchase price that eliminates uncertainty about post-PPA revenue and will support continued debt reduction."