Boston, MA, Nov. 13, 2007 — Atlantic Power Corp. announced that it has agreed to acquire the remaining 50.1% of Pasco Cogeneration L.P. from its current partners. The acquisition is expected to close in late December.
Pasco owns and operates a 121 megawatt gas-fired cogeneration facility located in Dade City, Florida in which Atlantic Power currently holds a 49.9% interest. Pasco sells electricity currently to Progress Energy Florida (PEF) under a power sales agreement that expires on December 31, 2008. On August 14, 2007 the Atlantic Power announced that it had negotiated a new ten-year tolling agreement with Tampa Electric Co. (TECo) that begins January 1, 2009 and runs through December 31, 2018.
Based on management’s current expectations of operating cash flow and debt service reserve releases, the acquisition of the remaining interest in Pasco is expected to increase distributions to Atlantic Power from Pasco by approximately $2.5 million in 2007 and $7.0 million in both 2008 and 2009. In 2010 through 2018, based on management’s expectations of operating performance and the terms of the new tolling agreement with TECo, the additional ownership in Pasco is expected to provide additional distributions of approximately $2 million per year.
Atlantic Power expects to finance the equity purchase price of approximately $25 million with cash on hand. There is a total of $15 million of existing debt at Pasco which is non-recourse to Atlantic Power and matures on December 31, 2008. The transaction is subject to approval by the project’s lenders, which is expected shortly.
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