Capital Power extends its Arlington Valley tolling agreement to 2038 and increases its summer capacity by 35 MWs, enhancing reliability and long-term value

Executive Summary

• Capital Power extended the Arlington Valley tolling agreement through October 2038, adding 13 years of contracted revenue.
• The extension includes a 35 MW capacity uprate (10 MW in 2026 and 25 MW in 2027).
• The uprate is expected to generate an estimated annual Adjusted EBITDA uplift of ~US$70 million by 2032, with ~US$8 million per year attributable to the uprate itself starting in 2027.

Key Details

• Contract Extension: Existing summer tolling agreement (originally through 2031) now runs to October 2038, providing a total of 13 years of contracted revenue for the Arlington facility.
• Capacity Uprate: Incremental 35 MW added to summer capacity – 10 MW in 2026 and an additional 25 MW in 2027.
• Financial Impact: Full‑year Adjusted EBITDA uplift projected at ~US$70 million annually by 2032; the uprate contributes ~US$8 million per year of Adjusted EBITDA over the asset’s life, beginning in 2027.
• Facility Profile: Arlington is a 600 MW natural‑gas combined‑cycle plant located west of Phoenix, Arizona; acquired by Capital Power in 2018.
• Strategic Rationale: The 6‑month summer contract structure captures higher merchant value in winter while securing stable summer revenues; post‑2027 the facility will also capture capacity value in CAISO and the Desert Southwest through trading and commercial optimization.

Notable Quotes

“We are proud to continue our long‑term partnership with this agreement, which highlights the essential role Arlington plays as a vital pillar of grid reliability for the region,” – Avik Dey, President and CEO, Capital Power.