April 8, 2010
Source: Pacific Northern Gas Ltd.
PNG announced that it has partnered with Skookum Power Corporation, and is acquiring the 9.8 MW McNair Creek "run of river" hydro-electricity generation facility from Kiewit Hydropower Investors Inc and Renewable Power. The McNair Creek facility, located on the B.C. Sunshine Coast, has operated for more than 5 years. The facility's generation is sold under a long-term contract to BC Hydro.
PNG's 97 percent share of the approximately $17 million acquisition cost will be funded by way of assumption of existing non-recourse debt as well as utilization of PNG's current bank facility. PNG's debt to capitalization will be approximately 51 percent after the transaction. The transaction will be cash flow positive and is expected to be EPS accretive in 2011.
PNG has entered into a development and operating agreement with Skookum Power gaining access to extensive expertise in hydrology, engineering and commercial development to support PNG's new business platform. The principals of Skookum Power are former power company executives with collectively more than 50 years experience in the hydro-electricity and energy sectors.