Sheerness Capacity Sold Out

November 28, 2002

 

The final four strip contracts related to the Sheerness Power Purchase Arrangement (PPA) have been sold in the second phase of the Market Achievement Plan II (MAP II), completed November 15, 2002. This sale of 356 MW of PPA capacity completes the Sheerness sale process through which another 400 MW of Sheerness strip contracts were sold in late September. Buyers of Sheerness strip contracts have purchased a share or "strip" of Sheerness PPA capacity and are able to sell the energy, capacity and ancillary services (where applicable) associated with that "strip".

In the most recent round, UBS Warburg Energy (Canada) Ltd. and TransCanada Energy Ltd. have each purchased a contract for 100 MW of energy capacity. In addition, Candela Energy Services Ltd. and Duke Energy Marketing L.P. have each purchased a contract for 78 MW of capacity that can be sold as energy or ancillary services. These contracts will transfer control of Sheerness' PPA capacity to Buyers effective December 1, 2002 for a thirty-seven month term expiring December 31, 2005

"This outcome successfully concludes the sale of the full 756 MW of Sheerness PPA capacity and represents another significant step toward the goal of transferring control of the Balancing Pool-held capacity into the hands of market participants" said Bruce Roberts, Director of Planning and Development. "Six different parties now control the Sheerness capacity and market participants now control three of the four Clover Bar Unit Contracts. The MAP II process has also attracted several new entrants to the Alberta market," said Mr. Roberts.

The first stage of the MAP II process culminated in late summer with the sale of three 157 MW unit-specific power contracts related to the Clover Bar Power PPA.

"With the completion of the Sheerness process, the residual capacity held by the Balancing Pool is now below the holding restriction limits established by the Power Purchase Arrangement Regulation. This should address concerns about the exercise of market power by the Balancing Pool," said Gary Reynolds, Acting Balancing Pool Administrator and Chief Financial Officer.

The third phase of the MAP II process will involve the sale of physical strip contracts from the Genesee PPA and will take place in early 2003. "Consultation with interested parties confirms that there continues to be strong interest in the MAP II products. We will carry and build on this momentum in the third and final phase of the MAP II process," said Mr. Roberts.

 

For more information on MAP II, please contact:
Bruce Roberts
Director of Planning and Development
Balancing Pool 403-705-8519

 

On sales process, and bidder participation in MAP II:
Bruce Hogg
Vice President and Director
Macquarie North America Ltd.
416-594-5157

 

Ernst & Young Letter of Reserve Price Compliance - Sheerness