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EDMONTON, Alberta – Capital Power Corporation (TSX: CPX) today released financial results for the quarter ended March 31, 2023.

“Financial results were strong for the first quarter despite unseasonably warm temperatures,” said Brian Vaasjo, President and CEO of Capital Power. “This included warm temperatures in Alberta for most of the quarter that resulted in an average power price of $142 per megawatt hour which was well below our expectations of $208 per megawatt hour. Our financial forecast and outlook for Alberta power prices and fleetwide performance continues to be positive for the remainder of the year. We expect financial results to be trending to the upper end of the adjusted EBITDA and AFFO guidance ranges of $1,455 million to $1,515 million and $805 million to $865 million, respectively.”

“The Ontario IESO capacity procurement confirms our natural gas strategy and is a good investment opportunity for Capital Power,” stated Mr. Vaasjo. “We were awarded a 6-year IESO contract extension associated with our 40 megawatt efficiency upgrade bid for Goreway, which applies to the new combined contracted capacity of 880 megawatts and extends the current contract from 2029 to 2035. We continue discussions with the IESO on a similar contract award for York Energy Centre and look forward to the results on our competitive bids relating to a gas turbine expansion at East Windsor and battery projects at Goreway and York Energy.”

“On behalf of all of Capital Power, I would like to welcome Avik Dey to the Company. Avik will be a tremendous catalyst for the team and as he noted in the April 19^th press release, he is looking forward to accelerating the company’s existing strategic plan. I would also like to congratulate Kate Chisholm, Senior Vice President and Chief Strategy and Sustainability Officer on her retirement. Kate has been an integral part of the executive team with outstanding service and valuable contributions since the inception of Capital Power. We wish Kate the very best in retirement,” added Mr. Vaasjo.

“Capital Power has been very fortunate to have Brian as our inaugural President & CEO,” said Board Chair, Jill Gardiner. “On behalf of the Board of Directors and the Company, I want to thank him for his tremendous leadership and bringing Capital Power to the strong position it is in today.”

Operational and Financial Highlights¹

(unaudited, millions of dollars except per share and operational amounts)	Three months ended March 31
	2023	2022
Electricity generation (Gigawatt hours)	7,417	6,893
Generation facility availability	94%	95%
Revenues and other income	$1,267	$501
Adjusted EBITDA 2	$401	$348
Net income 3	$285	$119
Net income attributable to shareholders of the Company	$286	$122
Basic earnings per share	$2.39	$0.96
Diluted earnings per share	$2.38	$0.96
Net cash flows from operating activities	$349	$415
Adjusted funds from operations 2	$210	$200
Adjusted funds from operations per share 2	$1.80	$1.72
Purchase of property, plant and equipment and other assets, net	$86	$132
Dividends per common share, declared	$0.5800	$0.5475

1. The operational and financial highlights in this press release should be read in conjunction with the Management’s Discussion and Analysis and the unaudited condensed interim financial statements for the three months ended March 31, 2023.
2. Earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from joint venture interests, gains or losses on disposals and unrealized changes in fair value of commodity derivatives and emissions credits (adjusted EBITDA) and adjusted funds from operations (AFFO) are used as non-GAAP financial measures by the Company. The Company also uses AFFO per share which is a non-GAAP ratio. These measures and ratios do not have standardized meanings under GAAP and are, therefore, unlikely to be comparable to similar measures used by other enterprises. See Non-GAAP Financial Measures and Ratios.
3. Includes depreciation and amortization for the three months ended March 31, 2023 and 2022 of $141 million and $142 million, respectively. Forecasted depreciation and amortization for the remainder of 2023 is $137 million per quarter.

Significant Events

Approval of normal course issuer bid

During the first quarter of 2023, the Toronto Stock Exchange approved Capital Power’s normal course issuer bid to purchase and cancel up to 5.8 million of its outstanding common shares during the one-year period from March 3, 2023 to March 2, 2024.

Executed 23-year clean electricity supply agreement for Halkirk 2 Wind

On February 3, 2023, we announced a 23-year clean electricity supply agreement with Public Services and Procurement Canada. The Agreement will provide approximately 250,000 MWh of clean electricity per year initially through Canada-sourced renewable energy credits until Capital Power’s proposed Alberta-based Halkirk 2 Wind project is completed, which is expected to be operational by January 1, 2025 (subject to regulatory approval). The 151 MW Halkirk 2 Wind project will provide renewable energy for the remainder of the term – representing approximately 49% of the facility’s output. As part of the transaction, Capital Power committed to securing an equity partnership with local Indigenous communities related to the proposed project.

Subsequent Events

Goreway awarded 6-year contract extension by Ontario IESO

On April 25, 2023, Capital Power and the Ontario Independent Electric System Operator (IESO) executed a 6-year contract extension for Goreway associated with its successful efficiency upgrade bid of approximately 40 megawatts (MW) in IESO’s competitive capacity procurement process. The uprate will increase Goreway’s current combined contracted capacity from 840 MW to 880 MW. The IESO contract extension applies to the new combined contracted capacity of 880 MW and extends the current Clean Energy Supply Contract from 2029 to 2035. The upgrade is expected to be completed in 2025. Goreway is a natural gas-fired combined cycle facility located in Brampton, Ontario.

Avik Dey appointed of as President and Chief Executive Officer, Brian Vaasjo to Retire

On April 19, 2023, the Company’s Board of Directors announced that it unanimously selected Avik Dey to be its next President and Chief Executive Officer and become a member of the Board of Directors, effective May 8, 2023. The appointment follows the planned retirement of Brian Vaasjo who will support Mr. Dey in an advisory role for six months to ensure a seamless transition.

Retirement announced for Kate Chisholm, Senior Vice President and Chief Strategy and Sustainability Officer

On April 13, 2023, the Company announced internally that Kate Chisholm, our Senior Vice President and Chief Strategy and Sustainability Officer has advised of her intention to retire effective July 4, 2023. Kate has been an integral part of the Executive Team with outstanding service and valuable contributions since the inception of Capital Power. Announcement for Kate’s replacement will occur in due course.

Analyst conference call and webcast

Capital Power will be hosting a conference call and live webcast with analysts on May 1, 2023 at 9:00 am (MT) to discuss the first quarter financial results. The conference call dial-in number is:

(800) 319-4610 (toll-free from Canada and USA)

Interested parties may also access the live webcast on the Company’s website at www.capitalpower.com with an archive of the webcast available following the conclusion of the analyst conference call.

Non-GAAP Financial Measures and Ratios

Capital Power uses (i) earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from our joint venture interests, gains or losses on disposals and unrealized changes in fair value of commodity derivatives and emission credits (adjusted EBITDA), and (ii) AFFO as financial performance measures.

Capital Power also uses AFFO per share as a performance measure. This measure is a non-GAAP ratio determined by applying AFFO to the weighted average number of common shares used in the calculation of basic and diluted earnings per share.

These terms are not defined financial measures according to GAAP and do not have standardized meanings prescribed by GAAP and, therefore, are unlikely to be comparable to similar measures used by other enterprises. These measures should not be considered alternatives to net income, net income attributable to shareholders of Capital Power, net cash flows from operating activities or other measures of financial performance calculated in accordance with GAAP. Rather, these measures are provided to complement GAAP measures in the analysis of our results of operations from management’s perspective.

Forward-looking Information

Forward-looking information or statements included in this press release are provided to inform the Company’s shareholders and potential investors about management’s assessment of Capital Power’s future plans and operations. This information may not be appropriate for other purposes. The forward-looking information in this press release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes.

Material forward-looking information in this press release includes disclosures regarding (i) status of the Company’s 2023 AFFO and adjusted EBITDA guidance, (ii) budgeted 2023 depreciation, and (iii) the generation capacity and timing of Goreway’s efficiency upgrade.

These statements are based on certain assumptions and analyses made by the Company considering its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate including its review of purchased businesses and assets. The material factors and assumptions used to develop these forward-looking statements relate to: (i) electricity, other energy and carbon prices, (ii) performance, (iii) business prospects (including potential re-contracting of facilities) and opportunities including expected growth and capital projects, (iv) status of and impact of policy, legislation and regulations and (v) effective tax rates.

Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company’s expectations. Such material risks and uncertainties are: (i) changes in electricity, natural gas and carbon prices in markets in which the Company operates and the use of derivatives, (ii) regulatory and political environments including changes to environmental, climate, financial reporting, market structure and tax legislation, (iii) generation facility availability, wind capacity factor and performance including maintenance expenditures, (iv) ability to fund current and future capital and working capital needs, (v) acquisitions and developments including timing and costs of regulatory approvals and construction, (vi) changes in the availability of fuel, (vii) ability to realize the anticipated benefits of acquisitions, (viii) limitations inherent in the Company’s review of acquired assets, (ix) changes in general economic and competitive conditions and (x) changes in the performance and cost of technologies and the development of new technologies, new energy efficient products, services and programs. See Risks and Risk Management in the Company’s Integrated Annual Report for the year ended December 31, 2022, prepared as of February 28, 2023, for further discussion of these and other risks.

Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the specified approval date. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

Territorial Acknowledgement

In the spirit of reconciliation, Capital Power respectfully acknowledges that we operate within the ancestral homelands, traditional and treaty territories of the Indigenous Peoples of Turtle Island, or North America.

Capital Power’s head office is located within the traditional and contemporary home of many Indigenous Peoples of the Treaty 6 region and Métis Nation of Alberta Region 4. We acknowledge the diverse Indigenous communities that are located in these areas and whose presence continues to enrich the community.

About Capital Power

Capital Power (TSX: CPX) is a growth-oriented North American wholesale power producer with a strategic focus on sustainable energy headquartered in Edmonton, Alberta. We build, own, and operate high-quality, utility-scale generation facilities that include renewables and thermal. We have also made significant investments in carbon capture and utilization to reduce carbon impacts. Capital Power owns approximately 7,500 MW of power generation capacity at 29 facilities across North America. Projects in advanced development include approximately 151 MW of owned renewable generation capacity in Alberta and 512 MW of incremental natural gas combined cycle capacity, from the repowering of Genesee 1 and 2 in Alberta.

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Supporting Document

• Full 2023 Q1 Report