Latest news with #CapitalPower
Edmonton Journal
4 days ago
- Business
- Edmonton Journal
Varcoe: The game 'is just getting started' — the pursuit of Alberta's $100B data centre dream revs up
Article content Article content AESO officials said Monday they'll publish an update later this month with details on both Phase I — on proponents securing load contracts for the initial allocation — and for the future phase of the connection process. Article content TransAlta, the province's largest generator, said in February it was working on data centre-related developments, initially considering offering 400 MW from one of its generating units at its Keephills power plant in the Wabamun Lake area, potentially followed by another 400 MW. Article content It submitted its Keephills site to the AESO interconnection lineup. Article content The Calgary-based company is moving toward executing a data centre memorandum of understanding in relation to its system capacity allocation, TransAlta CEO John Kousinioris said during the company's second-quarter earnings call. Article content Article content 'We are very, very pleased with the progress that we're making and are confident in the project as we're envisioning it going forward,' he said. Article content Article content Edmonton-based Capital Power also has two massive proposals in the AESO connection lineup, representing 1,500 megawatts of load for potential data centres to be co-located at its Genesee Generating Station. Article content However, the AESO's decision to limit large load connections in this first stage means a 1,000-megawatt project isn't viable and it's chosen not to pursue a scaled-down project at Genesee in Phase 1, CEO Avik Dey said on a recent earnings call. Article content But in an interview, Dey noted Capital Power, as a large electricity producer, will continue to pursue the concept in the future. Article content Article content He pointed out Alberta has large supplies of natural gas that can support long-term electricity supply to help attract data centres, a transmission and distribution system that is well built out, and cooler temperatures that leads to lower consumption by such developments. Article content 'We are not taking a foot off the gas of establishing Genesee as a site for a large, hyper data centre. Phase 1 doesn't allow us to pursue it at the scale we need,' he said. Article content 'We want Phase 1 to be very successful for the government . . . We'll happily provide power to each and every one of them, but there's still this option for us to attract the large, hyper data centre.' Article content Dey remains optimistic around the potential for data centres in Alberta, noting AESO was able to confirm this summer the province has 1,200 MW of available capacity in the short term it could earmark for such facilities that won't affect reliability and affordability for consumers. Article content 'If we can validate Alberta as a place for data centres to thrive, then I think we've got a high-class problem, which is now, how do we go capture the hyper data centre, how do we bring big tech into this province . . . I don't see in any scenario that we lose the opportunity,' Dey said.
Calgary Herald
4 days ago
- Business
- Calgary Herald
Varcoe: The game 'is just getting started' — the pursuit of Alberta's $100B data centre dream revs up
Article content AESO officials said Monday they'll publish an update later this month with details on both Phase I — on proponents securing load contracts for the initial allocation — and for the future phase of the connection process. Article content TransAlta, the province's largest generator, said in February it was working on data centre-related developments, initially considering offering 400 MW from one of its generating units at its Keephills power plant in the Wabamun Lake area, potentially followed by another 400 MW. Article content It submitted its Keephills site to the AESO interconnection lineup. Article content The Calgary-based company is moving toward executing a data centre memorandum of understanding in relation to its system capacity allocation, TransAlta CEO John Kousinioris said during the company's second-quarter earnings call. Article content Article content 'We are very, very pleased with the progress that we're making and are confident in the project as we're envisioning it going forward,' he said. Article content Article content Edmonton-based Capital Power also has two massive proposals in the AESO connection lineup, representing 1,500 megawatts of load for potential data centres to be co-located at its Genesee Generating Station. Article content However, the AESO's decision to limit large load connections in this first stage means a 1,000-megawatt project isn't viable and it's chosen not to pursue a scaled-down project at Genesee in Phase 1, CEO Avik Dey said on a recent earnings call. Article content But in an interview, Dey noted Capital Power, as a large electricity producer, will continue to pursue the concept in the future. Article content Article content He pointed out Alberta has large supplies of natural gas that can support long-term electricity supply to help attract data centres, a transmission and distribution system that is well built out, and cooler temperatures that leads to lower consumption by such developments. Article content 'We are not taking a foot off the gas of establishing Genesee as a site for a large, hyper data centre. Phase 1 doesn't allow us to pursue it at the scale we need,' he said. Article content 'We want Phase 1 to be very successful for the government . . . We'll happily provide power to each and every one of them, but there's still this option for us to attract the large, hyper data centre.' Article content Dey remains optimistic around the potential for data centres in Alberta, noting AESO was able to confirm this summer the province has 1,200 MW of available capacity in the short term it could earmark for such facilities that won't affect reliability and affordability for consumers. Article content 'If we can validate Alberta as a place for data centres to thrive, then I think we've got a high-class problem, which is now, how do we go capture the hyper data centre, how do we bring big tech into this province . . . I don't see in any scenario that we lose the opportunity,' Dey said. Article content
Globe and Mail
08-08-2025
- Business
- Globe and Mail
Don't be fooled by the ‘yield on cost' fallacy
Why would you not calculate your model dividend portfolio's yield based on its book cost instead of its current market value? I'll calculate the yield both ways in today's column. Then I'll explain why I prefer one method over the other. Let's use my model Yield Hog Dividend Growth Portfolio as an example. This is an opportune time to do so, because the portfolio just reached a key milestone: Thanks to a 6-per-cent dividend hike from Capital Power Corp. (CPX) on July 30, the portfolio's annual income has now officially doubled since inception. When I launched the portfolio with $100,000 of virtual money on Oct. 1, 2017, it was throwing off $4,094 of income annually based on dividend rates at the time. Owing to scores of dividend increases and regular reinvestments of cash over the years, it's now generating $8,199 of income – an increase of 100 per cent. These dividend ETF picks diversify your portfolio while saving on currency-conversion costs Down on dividend investing? Here's why you shouldn't be Now, to your question about yield: The traditional way to calculate the yield of a portfolio or individual stock is to divide the projected annual income by the current market value. Dividing the model portfolio's annualized income of $8,199 by its market value of $192,896 (as of July 31) produces a yield of about 4.3 per cent. In other words, for every dollar of capital in the portfolio today, about 4.3 cents of income is being generated annually, based on current dividend rates. This is what is known as the 'indicated yield,' and it is by far the most common way to calculate yield. But some investors prefer to measure yield in a different way. They calculate the 'yield on cost' by dividing current annualized income by the original cost of the stock or portfolio, not by the current market value. Using this method, the yield on cost of the model portfolio is $8,199 divided by the original value of $100,000, or about 8.2 per cent. The main benefit of using yield on cost is that it illustrates the growth of income over time. Indeed, despite the tariff-related volatility that has swept financial markets this year, dividend increases have continued to roll in from utilities, power producers, banks, real estate investment trusts and other companies in the portfolio. This is one reason I invest in dividend growth stocks: They bring some stability and predictability to an uncertain world. But here's the problem: Some investors don't always interpret yield on cost properly. They make the mistake of comparing the yield on cost with the current yields available in the marketplace. This is an apples-to-oranges comparison that can lead investors astray. Let's look at a stock in my personal portfolio to see why. Back in 2010, I bought shares of the utility, Fortis Inc. (FTS). At the time, the stock was trading at $27.58 a share and paying $1.12 of dividends annually, for a yield of about 4.1 per cent. Fortis (which I also hold in the model portfolio) has raised its dividend every year since then and is currently paying $2.46 annually. My yield on cost is therefore about 8.9 per cent (calculated as $2.46 of current income divided by my original purchase price of $27.58). Some fans of using yield on cost might argue that I could never find a dividend yield that high in the marketplace, especially from a company as solid as Fortis. I've even seen investors use a high yield on cost to justify hanging on to a stock they might otherwise want to sell. But am I actually earning 8.9 per cent on my investment in Fortis? No, absolutely not, because – this is the key part – my investment is no longer worth $27.58 a share. That price is 15 years out of date. Thanks to steady appreciation in Fortis's stock price over the years, my investment is now worth about $70 a share, as of Friday morning. So, if I currently have about $70 of capital tied up in each Fortis share, and each share is generating $2.46 of dividends, the yield of my Fortis shares is actually 3.5 per cent, not 8.9 per cent. The higher yield is misleading because it is derived by applying a current dividend rate to an old share price, which makes it useless for comparing Fortis's yield with the yields of other dividend stocks. Let's look at a more extreme example to drive the point home. Imagine you purchased a rental apartment building 50 years ago for $100,000. At the time, the building was generating rental income of $10,000, for a yield of 10 per cent. Now, let's assume the apartment building's market value and its total rental income have both increased tenfold, to $1-million and $100,000, respectively. Would you calculate the apartment's yield by dividing the current rental income of $100,000 by the wildly out-of-date market value of $100,000? Of course not. The price you paid 50 years ago is no longer relevant. What matters for the purposes of calculating the apartment's yield, and comparing it with the yield of other apartments, is the property's current market value and annual income potential today. The building's true yield is therefore 10 per cent ($100,000 divided by $1,000,000). A high yield on cost is a nice reminder that your income has grown, but it should never be used as a metric to compare with other investments. So, the next time someone tells you they don't want to sell a stock because it has a high yield on cost, show them this column. E-mail your questions to jheinzl@ I'm not able to respond personally to e-mails, but I choose certain questions to answer in my column.
Globe and Mail
08-08-2025
- Business
- Globe and Mail
This Canadian Utility Stock Just Boosted Its Payout and Now Yields Nearly 5%
If you're looking for a top dividend stock to add to your portfolio, Capital Power (TSX:CPX) is one you won't want to overlook. This power-generation company has a stable business, and it believes that it's largely insulated from U.S. tariffs. Management is confident in the company's ability to perform at a high level, which is evident in Capital Power's board recently approving a 6% dividend increase. The new quarterly payout of $0.691 per share quates to an annualized dividend of $2.764. And with the stock trading at around $56, that means investors who buy today can collect a yield of around 4.9%. It's the 12 th consecutive year that the company has raised its payout, as it builds up its reputation of being a dependable dividend growth stock. The company's adjusted EBITDA for the most recent quarter was $322 million, which was nearly identical from the $323 million it reported a year ago. Capital Power recently closed two acquisition, one for Hummel Station (in Pennsylvania) and for Rolling Hills (in Ohio), which will expand its operations in the U.S. and lead to more growth for the business in the future. Investing in energy companies can be a good way for dividend investors to benefit from long-term stability while collecting above-average payouts. Since companies like Capital Power benefit from a great deal of recurring revenue, they can make for fairly good long-term investments. Over the past five years, Capital Power's stock has doubled in value, and that's without factoring in its dividend over that stretch. Trading at 18 times its estimated future earnings, this can be a good dividend stock to buy and hold right now.
CBC
31-07-2025
- Business
- CBC
Capital Power still waiting for Alberta data centre powering opportunity at Genesee plant
Capital Power Corp. says it's holding out for an opportunity to power a large-scale data centre at its Genesee Generating Station, but Alberta's grid operator is not currently making enough electrical connection capacity available for the size of project it's chasing. The power plant 80 kilometres southwest of Edmonton now runs entirely on natural gas instead of coal after a $1.6-billion multi-year revamp, allowing it to boost its capacity by around 60 per cent while cutting greenhouse gas emissions by 40 per cent. Capital Power CEO Avik Dey has said it would be the perfect site to exclusively power a data centre. Those are huge facilities housing the computing firepower needed for artificial intelligence and other applications. It can take an enormous amount of power to run and cool them. The Alberta government has set a goal of attracting $100 billion in data centre investments over five years. WATCH | Alberta's plan to build huge data centres for AI could pose a significant emissions challenge: Alberta's plan to build huge data centres for AI could pose a significant emissions challenge 7 months ago The Alberta Electric System Operator (AESO) said last month it has received requests from 29 proposed data centre projects representing more than 16,000 megawatts — more than 11 times the City of Edmonton's load. To accommodate that surge in demand, the AESO has placed a temporary limit on the projects wanting to connect to the grid — 1,200 megawatts between now and 2028 — in order to ensure system reliability. Capital Power was among those raising concerns about the interim limit. Dey told analysts on a conference call Wednesday that it wants to pursue a 1,000-megawatt project, but doesn't see something that big moving forward with a potential partner under the grid operator's current Phase 1 limits. It's taking a pass on pursuing something smaller at Genesee in the meantime. "Our physical site at Genesee is incredibly advantaged for a large hyper data centre," he said, pointing to its access to fibre, transmission and distribution infrastructure. Dey said Capital Power will look at whether it can move a project ahead under future phases of the AESO's allocation plan, and continue to advocate for the current limit to be raised. "I think we all want the same thing here … We have a different view on how that should be allocated, but I think everyone's trying to work to the same endgame here," he said. "And I will concede the AESO and the utilities ministry and the government are balancing multiple needs and considerations." Capital Power shares dropped almost six per cent in afternoon trading on the TSX to $58.55. Earlier Wednesday, the power producer said it swung to a loss in the second quarter compared with a profit last year. It said its net loss attributable to shareholders was $132 million during the quarter ended June 30, or 92 cents per diluted share. That compared with a profit of $75 million, or 51 cents per share in the same quarter last year. The loss came as revenue also dropped to $441 million, down from $774 million last year. In the quarter, the company completed its $3 billion acquisition of two power facilities in the U.S. that it says add to its flexible power generation.
