Capital Power is a growth-oriented North American power producer, building on more than a century of innovation and reliable performance. Our vision is to be recognized as one of North America’s most respected, reliable and competitive power generators. Headquartered in Edmonton, Alberta, Capital Power has interests in 31 facilities in Canada and the U.S. totaling approximately 3,500 MW of generation capacity. Capital Power and its subsidiaries develop, acquire and optimize power generation from a wide range of energy sources.
Corporate Structure
On May 8, 2009, EPCOR Utilities Inc. (EPCOR) announced its plans to create Capital Power Corporation (Capital Power), a power generation company permanently headquartered in Edmonton, Alberta. Capital Power issued 21,750,000 common shares in the capital of Capital Power at $23 per share pursuant to its initial public offering (IPO) on July 9, 2009. Proceeds from the IPO net of underwriting commissions were approximately $475 million, of which approximately $468 million were used to purchase a 27.8% equity interest in Capital Power L.P. (CPLP). EPCOR Power Group, which was substantially all of the power generation assets of EPCOR, was purchased by CPLP on July 9, 2009, with effect from July 1, 2009, through a series of transactions described in the Business Acquisition Report.
Immediately following completion of the Reorganization, Capital Power held approximately 27.8% of CPLP while EPCOR held 56.625 million exchangeable limited partnership units of CPLP (exchangeable for common shares of Capital Power on a one-for-one basis) representing approximately 72.2% of CPLP. Each exchangeable limited partnership unit is accompanied by a special voting share in the capital of Capital Power which entitles the holder to a vote at Capital Power shareholder meetings, subject to the restriction that such special voting shares must at all times represent not more than 49% of the votes attached to all Capital Power common shares and special voting shares, taken together.
Capital Power and EPCOR have agreed that for so long as EPCOR holds not less than a 20% interest in the common shares of Capital Power, the number of directors will not be less than nine. The special voting shares also entitle EPCOR, voting separately as a class, to nominate and elect a maximum of four directors of Capital Power. There are currently twelve directors on Capital Power’s board of directors. Accordingly, Capital Power controls CPLP and, on that basis, the operations of CPLP will be consolidated by Capital Power for financial statement purposes.
EPCOR has advised the Company that it intends to act only as an investor in and not as a manager of Capital Power, and that EPCOR intends to direct or exercise the voting rights attached to the Special Voting Shares and Special Limited Voting Share, as such. EPCOR has further advised the Company that it may eventually sell all or a substantial number of the Common Shares underlying its Exchangeable LP Units, subject to market conditions, its requirements for capital and other circumstances that may arise in the future.
The chart below sets out the inter-corporate relationships of EPCOR, Capital Power and its material subsidiaries.
CPILP
Capital Power Income L.P. (previously EPCOR Power L.P.) is a limited partnership formed under the laws of Ontario by an amended and restated limited partnership agreement dated August 31, 2005. CPILP is listed on the Toronto Stock Exchange. Capital Power indirectly holds a 30.3% interest in CPILP and indirectly serves as its manager and general partner. CPILP has an ownership interest in a portfolio of 20 generation plants in the U.S. and Canada with generation capacity of 1,668 MW and thermal capacity of approximately 3,797 million pounds per hour. These plants generate electricity and steam principally from natural gas and, to a lesser extent, from waste heat, hydro, biomass, coal and tire-derived fuel.