RICHARD BLACKWELL, Globe and Mail, Mar. 16, 2010
Five public companies have emerged as winners in the first stage of British Columbia's "clean power call" that selected green energy projects to supply the province's future energy needs.
Late last week, British Columbia Hydro and Power Authority (BC Hydro) announced 19 projects that will get power purchase agreements - five wind farms and the rest run-of-river hydro projects. Among the 10 firms that won contracts, half are traded on either the main Toronto Stock Exchange or the TSX Venture Exchange.
The B.C. process was long, subject to many months of delays, and involved complex negotiations with the individual companies and affected first nations communities. But now the decision is in, the winning firms can go ahead with development plans over the next few years.
The province intends to sign power purchase agreements for about 5,000 gigawatt hours of clean power in total, and last week's selection amounts to just about half of that - enough to supply about 218,000 homes. Another group will get the good news before the end of March.
Here are the public companies that won in the first round, and how the decision affected their stock performance:
Finavera Renewables Inc. A few years ago, Finavera spent most of its efforts developing technology to get power from ocean waves. A series of technical and financial setbacks forced it to refocus on wind power. The company came out of the B.C. power call with approval for four of its wind projects - fully one-third the value of all contracts awarded. All four are in Northeastern B.C. and will be built between 2012 and 2014.
"This is without a doubt the biggest win for the company in its history," Scotia Capital analyst Ben Isaacson said. "This is real meat on the bones for them - these are bankable projects."
Finavera's stock showed the biggest jump of any of the companies that won B.C. contracts. It more than doubled in price Friday after the announcement, hitting 18 cents before falling back. Still, it is well below its 2007 high of 90 cents a share.
Capital Power Corp. This power-generating spinoff from Edmonton's electricity utility, Epcor, won the largest single power-purchase deal from B.C. Hydro for a $455-million 79-turbine project in Northeastern B.C.
But Capital Power is a big company, with several coal, natural gas and hydro power generating plants up and running, so the impact of the new operation will be relatively small. Analyst Bob Hastings of Canaccord Adams said the new wind project could add 15-20 cents to Capital Power earnings after it is up and running in 2012, but the current impact on its shares will be minimal.
Investors seemed to agree, as the stock hardly budged.
Innergex Renewable Energy Inc. This Longueuil, Que.-based firm owns a two-thirds stake in three run-of-river hydro projects that won B.C. contracts.
Innergex stock moved only slightly Friday, although some analysts boosted their target prices. Like Capital Power, Innergex has a number of other power plants in its portfolio, and its new B.C projects won't be on stream for several years.
Plutonic Power Corp. While Plutonic won a contract, its stock actually took a dip late last week. That's because, just before the deals were signed, Plutonic and its partner General Electric Co. delayed a massive run-of-river hydro project they had planned at Bute Inlet, northwest of Vancouver.
Swift Power Corp. This Vancouver company is working on developing a number of small run-of-river hydro projects, and it got the go-ahead for a 20-megawatt operation near Terrace, B.C. Swift's stock is thinly traded and volatile, and didn't take a big jump after the contract was announced.
There are a handful of other public companies that could see a boost if they win contracts under the balance of the B.C. power call, which is supposed to be announced by March 31. Among them is Naikun Wind Energy Group Inc., which has high hopes for a large wind farm in Hecate Straight near Haida Gwaii. It could be Canada's first offshore wind power project.
