Innergex told to curtail power from HPPs in Canada

Innergex Renewable Energy Inc (TSE:INE) is unwillingly complying with notices from Canadian power utility BC Hydro to curtail electricity from its six hydropower plants (HPPs) in British Columbia in response to the COVID-19 pandemic, disputing the reasons given.

The Canadian independent power producer said it had been notified by BC Hydro that the utility would not accept and buy power under the applicable electricity purchase agreements (EPAs) above a specified curtailment level from May 22 to July 20, 2020.

Four HPPs are required to reduce output to 0.0 MWh, while curtailment levels for the Tretheway Creek and the Big Silver Creek HPPs are set for 2.0 MWh and 4.0 MWh, respectively.

Innergex calculates it stands to lose revenues of less than CAD 20 million (USD 14.3m/EUR 13.1m) for the specified period, which BC Hydro may further extend.

According to Innergex, BC Hydro is invoking force majeure under the EPAs, citing the pandemic and related government measures for not being able to accept or purchase the electricity from the plants. The curtailment notices arrive after BC Hydro’s public statements about how it is tackling lower demand and related challenges to the safe operation of its hydroelectric system under the current circumstances, Innergex said.

The company disputes these reasons and explains that BC Hydro can require curtailment in certain circumstances under the EPAs, but it has to compensate Innergex for electricity that otherwise would have been generated.

Innergex added that it will comply with BC Hydro’s request, “but will do so under protest and will seek to enforce its rights under the EPAs”.

(CAD 1.0 = USD 0.715/EUR 0.656)

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