Tuesday, May 12, 2009

Epcor to sell stock in power operation

The municipally owned water and power utility in Edmonton plans to sell investors a quarter of its energy arm.

Epcor Utilities Inc. said Friday that it will form a new unit to hold its power operations and initially sell a 25 per cent stake to the public. It may sell more later, the company said in a news release.

The new company, Capital Power Corp., will fund its growth through capital markets.

"Over the past 10 years, Epcor has grown from operating five power and water plants to more than 50, and both lines of business are continuing to develop growth opportunities that require significant capital," said Don Lowry, president and CEO.

Capital Power will hold Epcor's 30.6 per cent stake in Epcor Power LP and be responsible for about 3,300 megawatts of owned and/or operated generation capacity at 31 plants in Canada and the United States.

It plans to build power plants across North America and continue to commercialize near-zero-emission generation technologies.

Based in Edmonton, Capital Power will include about a third of Epcor's 3,000 employees.

There will be no changes for Epcor's regulated power and water customers, the company said.

Epcor, which operates as a company and not as a municipal utility, said Friday that it made $104 million profit on revenue of $890 million for the three months ended March 31, compared with $68 million on revenue of $799 million in the same period a year earlier.

The Capital Power spinoff was approved by Edmonton council on April 17. The new company will be headed by Brian Vaasjo, Epcor executive vice-president and chief operating officer.

Epcor expects the Capital shares will be sold before the summer.