TransCanada (TRP) Says Bruce Power Force Majeure Not Expected to Have Impact on FY12 EPS

June 28, 2012 10:19 AM EDT
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TransCanada Corporation (NYSE: TRP) (TransCanada) has been advised that Bruce Power has submitted a request for a force majeure claim to the Ontario Power Authority as a result of an external event that delayed the synchronization of Unit 2 (Bruce A) to the Ontario power grid. Bruce Power believes that the Ontario Power Authority will support Bruce's claim, and if accepted, the price that Bruce Power receives for power generated from the other operating units would not be impacted.

This development is not expected to have a material impact on TransCanada's 2012 earnings because the force majeure will ensure Bruce Power continues to receive contracted rates for power after July 1, 2012. Assessment of damage to Unit 2 is almost complete, Bruce Power has the materials they need to complete the repairs and that work is currently underway. We expect that an updated restart timeframe for Unit 2 will be made in the coming weeks.

TransCanada's share of the total net capital cost for the refurbishment is expected to be approximately $2.4 billion. Once the refurbishment is complete, Bruce Power will be one of the world's largest nuclear facilities, capable of providing more than 6,200 MW or about 25 per cent of Ontario's power. Refurbishment of the Unit 1 reactor at Bruce Power continues to progress as planned and it is expected to begin commercial operations in mid-third quarter 2012 as previously disclosed. Bruce Power consists of two generating stations (Bruce A & B) with each station housing four nuclear reactors. Six of those reactors are currently operational, producing more than 4,700 MW of power. TransCanada owns 49 per cent of Bruce A and 32 per cent of Bruce B.

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