OAKVILLE, ON, Nov. 14 /PRNewswire-FirstCall/ -- Algonquin Power Income Fund (the "Fund") announced today that it has approved plans for a re-development of its 42MW natural gas powered generating station located in Sanger, California which is expected to result in substantial improvement in fuel efficiency and facility output.
The Sanger generating station is a combined cycle electrical generating station currently powered by a Westinghouse W251 natural gas fired turbine and a General Electric steam turbine. Electrical energy and capacity produced by the facility are sold to Pacific Gas and Electric Company ("PG&E") pursuant to a long term agreement ending in May, 2022. Payments under the power purchase agreement consist of a monthly capacity payment and an energy payment related to the cost of natural gas. While the facility has demonstrated a successful operating history since its commissioning in 1991, advances in general turbine technology provide an opportunity to substantially improve the fuel efficiency and output of the facility. Accordingly, the Fund has approved a plan to retrofit the Sanger facility with a General Electric LM6000 turbine, estimated for completion during the fourth quarter of 2007.
"The projected fuel and maintenance costs savings alone provide an accretive investment opportunity for the Fund," commented Ian Robertson, a senior manager of the Fund. "Perhaps as importantly, the broad industry support for the General Electric turbine will substantially reduce operating risks for the Fund and the attractive fuel efficiency of the LM6000 will allow the facility to participate competitively in the electrical capacity market following the expiration of the existing power purchase agreement in 2022," he continued.
The projected cost of the retrofit program is approximately US$23 million. The layout of the Sanger facility will allow the installation of the LM6000 turbine concurrently with continued operation of the Westinghouse turbine prior to switchover to eliminate any expected loss of capacity payments from PG&E during the construction period. The higher electrical capacity of the LM6000 turbine will allow total electric output of the Sanger facility to be increased to approximately 56MW.
About Algonquin Power Income Fund
Algonquin Power Income Fund is an open-ended investment trust that owns and has interests in a diverse portfolio of power generating and infrastructure assets across North America, including 48 hydroelectric facilities, five natural gas-fired cogeneration facilities, 17 alternative fuels facilities and 15 water distribution and waste-water facilities. Algonquin Power Income Fund was established in 1997 to provide unitholders with sustainable, highly stable cash flows through a diversified portfolio of energy and infrastructure assets. Algonquin Power Income Fund's units and convertible debentures are traded on the Toronto Stock Exchange under the symbols APF.UN & APF.DB, and units are included in the S&P/TSX Composite Index. More information about Algonquin Power Income Fund can be found at http://www.algonquinpower.com/.
