HOUSTON — TransCanada said Monday it will end agreements to buy power from three coal plants.
The Calgary, Alberta-based company cited the rising costs of carbon emissions, and said it expects incur a pre-tax, non-cash charge of $235 million related to the contract termination at the Sheerness, Sundance A and Sundance B coal plants. All three plants are located in Alberta.
“Unprofitable market conditions are expected to continue as costs related to CO2 emissions have increased and they are forecast to continue to increase over the remaining term of the [power purchase agreements],” TransCanada said in a statement. “The company expects the termination will improve cash flow and comparable earnings in the near term.”
TransCanada is best known in the United States for the rejected Keystone XL pipeline, which would have carried oil sands crude from Alberta to Nebraska. But in addition to pipelines, TransCanada owns significant natural gas and renewable power generation assets in both Canada and the U.S.
TransCanada said the end of its agreements with the coal plants won’t impact its other power generation in the Canadian province. The company has four gas-fired plants totaling 438 megawatts in the area.
“Investment opportunities remain in the Alberta power market and are expected to begin with new wind projects and later with the need for gas-fired power capacity required to replace retiring coal-fired plants,” the company said in a statement.