Capital Power's (CPXWF) CEO Brian Vaasjo on Q1 2016 Results - Earnings Call Transcript

| About: Capital Power (CPXWF)

Capital Power Corporation (OTC:CPXWF) Q1 2016 Results Earnings Conference Call April 25, 2016 11:00 AM ET

Executives

Randy Mah - Senior Manager of Investor Relations

Brian Vaasjo - President and Chief Executive Officer

Bryan DeNeve - Senior Vice President, Finance and Chief Financial Officer

Analysts

Linda Ezergailis - TD Newcrest

Jeremy Rosenfield - Industrial Alliance

Andrew Kuske - Credit Suisse

Robert Kwan - RBC Capital Markets

Steven Paget - FirstEnergy Capital

Ben Pham - BMO Capital Markets

Patrick Kenny - National Bank Financial

Operator

Welcome to Capital Power's first quarter 2016 results conference call. At this time, all participants are in listen-only mode. Following the presentation, the conference call will be opened for questions. This conference call is being recorded today April 25, 2016.

I will now turn the call over to Randy Mah, Senior Manager, Investor Relations. Please go ahead.

Randy Mah

Good morning and thank you for joining us today to review Capital Power's first quarter 2016 results which were released earlier this morning. The financial results and the presentation slides for this conference call are posted on our website at capitalpower.com. We will start the call with opening comments from Brian Vaasjo, President and CEO and Bryan DeNeve, Senior Vice President and CFO. After our opening remarks, we will open up the lines to take your questions.

Before we start, I would like to remind listeners that certain statements about future events made on this conference call are forward-looking in nature and are based on certain assumptions and analysis made by the company. Actual results may differ materially from the company's expectations due to various material risks and uncertainties associated with our business. Please refer to the cautionary statement on forward-looking information on slide number two.

In today's presentation, we will be referring to various non-GAAP financial measures as noted on slide three. These measures are not defined financial measures according to GAAP and do not have standardized meanings described by GAAP and therefore are unlikely to be comparable to similar measures used by other enterprises. Reconciliations of these non-GAAP financial measures can be found in the first quarter 2016 MD&A.

I will now turn the call over to Brian Vaasjo for his remarks starting on slide four.

Brian Vaasjo

Thanks Randy. I will start off by reviewing our highlights for the first quarter. Capital Power delivered solid operating and financial performance in the first quarter that were in line with management's expectations. This included achieving an average plant availability of 97%.

On March 24, we terminated our buyer role under the Sundance C PPA. The impacts from the PPA termination resulted in an increase to our Alberta commercial hedge positions for 2017 to 2020, which is expected to produce positive impacts to adjusted EBITDA. Brian DeNeve will provide further details in his remarks.

For the Bloom Wind project, we have signed a 10-year agreement with a subsidiary of Allianz SE, the worldwide insurance and asset management group for 100% of the output. Construction for the 178 megawatt project located in Kansas will begin in the third quarter of this year with targeted completion in the third quarter of 2017.

For Genesee 4 and 5 project, we have delayed the full notice to proceed decision to the fourth quarter of this year. The construction execution has been restructured and should we elect to proceed under this revised plan, we would expect to achieve substantial completion of Genesee 4 in early 2020.

Turning to slide five, I want to provide an update on the Alberta Climate Leadership Plan. The Alberta government has appointed Mr. Terry Boston as the coal phase-out facilitator to oversee the transition away from coal-fired generation by 2030. The facilitator is tasked with presented options to the Alberta government that will strive to maintain the availability of Alberta's electricity grid, maintain stability for prices for consumers and avoid unnecessarily stranding capital.

The primary focus for the facilitator is on the six coal units that had end-of-life beyond 2030 under the federal Capital Stock Turnover regulations. For capital power, this impacts on the Genesee 1 and 2 units and a 50% interest in Genesee 3 and Keephills 3. Initial meetings with Mr. Boston have taken place earlier this month and we remain optimistic that a fair and appropriate compensation outcome will be reached for our shareholders.

Moving to slide six. This slide summarizes the plant availability operating performance of our plants for the first quarter of 2016 compared to the same period a year ago. We had excellent operational performance in the first quarter with average plant availability of 97% compared to 98% in the first quarter of 2015.

I will now turn the call over to Bryan DeNeve.

Bryan DeNeve

Thanks Brian. Starting on slide seven, I would like to review our first quarter financial performance. We generated $109 million in funds from operations and normalized earnings per share of $0.33 that were in line with our expectations. Alberta power prices in the first quarter averaged $18 a megawatt-hour compared to $29 per megawatt-hour in the first quarter of 2015. Despite this 38% year-over-year decline, our trading desk captured 189% higher realized average price of $52 per megawatt-hour on our Alberta commercial assets versus the spot price of $18 per megawatt-hour.

Turning to slide eight, I will review our first quarter financial results compared to the first quarter of 2015. Revenues were $341 million, down 5% from first quarter of 2015, primarily due to lower portfolio optimization revenues. The portfolio was fully hedged at an average realized price of $52 per megawatt-hour compared to an average realized price of $59 in the first quarter of last year. Adjusted EBITDA before unrealized changes in fair values was $128 million, up 10% from the first quarter of 2015, primarily due to the addition of K2 Wind, which began commercial operations in the second quarter of 2015. Normalized earnings per share of $0.33 increased 3% compared to $0.32 a year ago. As mentioned, we generated funds from operations of $109 million in the first quarter, which were up slightly on a year-over-year basis.

On slide nine, I will discuss the impact of our Alberta baseload hedging profile from the termination of the Sundance C PPA. The recent decisions of Capital Power and other companies to return PPAs back to the balancing pool has resulted in a significant albeit temporary increase in liquidity in the forward market, which has in turn helped contribute to the increase in our baseload hedging profile. For example, the table on the slide shows our current Alberta Commercial portfolio positions from 2017 to 2019. For 2017 and 2018, the table also shows what our hedge positions were at the end of 2015. For 2017, we are now fully hedged, compared to being 38% hedged at the end of 2015. The average contracted price of our fully hedge position is in the mid-$40 per megawatt-hour range. In 2018, we are 50% hedged compared to 9% at the end of 2015. The average contracted price for our hedges in 2018 is in the low-$50 per megawatt-hour. And for 2019, we are 34% hedged at an average contracted price in the low-$50 per megawatt-hour. So you can see our baseload merchant exposure is fully hedged for this year and for 2017.

Turning to slide 10. This slide shows our financial coverage of our operating margin to our financial obligations and dividends. Financial obligations includes interest payments, sustaining CapEx, G&A expenses and assumes dividend growth from 2016 to 2018. This shows that we have significantly firmed up on our hedging position relative to when we spoke to this at our Investor Day in December. As depicted in the bottom line of the chart, our operating margin from our contracted facilities alone excluding any merchant margins covers close to 100% of our financial obligations and dividends in 2016 and fluctuates between 90% to 95% in 2017 to 2019. The three lines above the contracted margin line shows our coverage when you add the operating margins from our merchant facilities at various price levels.

For example, at a fixed $40 per megawatt-hour price from 2016 to 2019, the financial coverage is approximately 135% in 2016 and decreases to about 110% in 2019. For illustrative purposes, we have also shown the financial coverage based on forward prices at the end of March 2016 and also at a $70 per megawatt-hour price. This results in an even higher financial coverage ratio. With respect to given instability and dividend growth, this is supported by the table on the slide. As our baseload positions are fully hedged in 2016 and 2017, there is no reliance on Alberta spot power prices to cover our financial obligations and dividends, including the dividend growth. In 2018, we would need a minimum of $20 a megawatt-hour to cover our financial obligations and dividends and that minimum price increases to $30 per megawatt-hour in 2019. As you saw on the previous slide, forward prices for 2018 and 2019 are currently trading about $50 a megawatt-hour.

I will now turn the call back to Brian Vaasjo.

Brian Vaasjo

Thanks Bryan. The charts on slide 11 show our first quarter operational and financial results versus the 2016 annual targets. For the first quarter, average plant availability was 97%, which exceeded our 94% plant availability target for 2016. Our sustaining CapEx was $8 million versus the $65 million annual target. We reported $52 million in plant operating and maintenance expense versus the $200 million to $220 million target. Finally, we generated $109 million in funds from operations in the first quarter versus the $380 million to $430 million annual target. Overall, we are on track to meet our 2016 annual operational and financial targets.

Turning to slide 12. We have two development and construction growth targets in 2016. As mentioned, we have worked with our partner ENMAX and our suppliers to restructure the construction execution of the Genesee 4 and 5 project. This has delayed the decision point for proceeding to the fourth quarter of 2016, resulting in modestly higher cost and risk. The project is also contingent on clarity with respect to the impact of decisions from the Climate Leadership Plan and the appropriate price signals for the Alberta energy only market.

On slide 13, we also have growth targets outside of Alberta, which involves executing a contract for the output of a new development. As highlighted earlier, this has been achieved with our Bloom Wind project. Bloom Wind has a 10-year fixed price contract covering 100% of the output. The cost for Bloom Wind is approximately CDN358 million. Construction of the project is expected to start in the third quarter of this year with commercial operations targeting one year later. In addition to Bloom Wind, we are also actively bidding into RFPs for other U.S. wind projects.

I will now turn the call back over to Randy.

Randy Mah

Thanks Brian. Mike, we are ready to start the Q&A.

Question-and-Answer Session

Operator

[Operator Instructions]. The first question comes from Linda Ezergailis. Please go ahead.

Linda Ezergailis

Thank you. I have some questions around Bloom I wonder if you could provide us with some parameters around the economics, whether it be power price utilization, your expected returns, et cetera?

Bryan DeNeve

Yes. So for the Bloom project, the project itself is expected to meet our target returns. We look at the project primarily on a contracted basis, but also post-PPA we have built-in higher returns from a merchant perspective where we see some recontracting risk. The projected EBITDA during the next 10 years is approximately CDN9 million per year. That could vary slightly up or down depending on the final commercial terms we have in place with a tax equity investor. At the end of the PPA period, we expect that the EBITDA will increase to the range of CDN23 million per year.

Linda Ezergailis

Okay. Thank you. And just some more details around the financing with tax equity?

Bryan DeNeve

No. At this point, those details are still under discussion and negotiation. So the actual final agreements with the tax equity investor will be negotiated and put in place closer to COD.

Linda Ezergailis

Okay. Thank you. And just a follow-up on the G 4 and 5. Can you talk a little bit about what the additional incremental risks are and what bringing the cost a little bit higher, if you can talk about quantity as well, that would be helpful?

Brian Vaasjo

Sure, Linda. Those are [indiscernible] relatively modest in terms of cost through the normal kind of escalations associated with supply contracts. So nothing dramatic at all from that perspective. And in respect of risk, as we indicate, the project has been restructured, which means you are undertaking a lot more activity in a shorter period of time. So that brings on just an additional complexity risk where you have higher peak number of people on-site working on multiple construction phases [indiscernible] execution risks associated with it. Just a higher level of activity taking place at the site for a shorter period of time.

Linda Ezergailis

Thank you. And is there an option, potential with your suppliers and partners to delay a little bit further if necessary? Or do you expect those to be kind a hard stop to decide by the end of this year?

Brian Vaasjo

Well, we can always delay the project and have the flexibility to delay the project, completion date changes. The target here is to continue and we have been compressing the timeframe such that we can have the same general completion date. But within contracts, there is the ability to move the project further along but for later completion dates.

Linda Ezergailis

Great. Thank you.

Operator

All rights. Next question comes from Jeremy Rosenfield from Industrial Alliance. Please go ahead.

Jeremy Rosenfield

Yes. Thank you. Good morning. Just a couple of questions. In terms of the hedging to start off by turning back over the PPA for Sundance, what is the hedge position now for the remainder of 2016? If you can sort of elaborate on that? And what your strategy is for the rest of the year? Have you brought the hedge position down to 100% of the remaining baseload capacity?

Bryan DeNeve

Yes. So with the termination of the Sundance C PPA, that's removed about 350 megawatts of length in our position. Now, as you mentioned, we were hedged about 100% of our baseload. So we still have our peaking assets, which include Clover Bar Energy Center and our share of the Joffre facility, which cover the majority of that length that we have reduced. So at this point in time, we would have greater than 100% of our baseload position hedged and we are managing that position as we move forward.

Jeremy Rosenfield

So just to be clear, when you say you are managing as you move forward, you are going to look and see in the market and weigh whether it's worthwhile offloading some of that compared to potentially generating power not from the baseload portion of your portfolio, if I understand correctly?

Bryan DeNeve

That's exactly right.

Jeremy Rosenfield

Okay. I wanted to just be clear on that.

Bryan DeNeve

Yes.

Jeremy Rosenfield

Just from a strategic perspective, in periods of market volatility there is a risk associated with that and here obviously, I think the pricing is not very volatile. So just to make sure that your interpretation is that volatility should remain relatively low going forward and so you are not uncomfortable holding the gas-fired assets to backstop that PPA position or the hedge position, I should say.

Bryan DeNeve

That's correct. So very healthy. Our generating units are operating very well this year. But the other key factor, of course, is that with majority of the PPAs going back to balancing pool, we are not seeing a lot of strategic bidding that we saw previously. So that's also had a downward impact on volatility.

Jeremy Rosenfield

Okay. Maybe if I could just ask a second question on the negotiations that are ongoing. I think the first question is basically, are you allowed to say anything in terms of adding some transparency or visibility and/or is it maybe just too early and that we have to just hold on?

Brian Vaasjo

So I would say, all of the above. It is obviously very early in the process. Secondly, from the standpoint, as you characterized, these negotiations are not really appropriate to discuss that in public in the positioning and certainly there is an expectation that parties will keep negotiations and discussions or not be public in those discussions. So I wouldn't expect that you would hear necessarily a lot from any of the parties involved for a period of time.

Jeremy Rosenfield

Okay. Those are my questions for the moment. Thank you.

Operator

All right. Next we have a question from Andrew Kuske from Credit Suisse. Please go ahead.

Andrew Kuske

Thank you. Good morning. I guess the question is for Bryan and if you look at any market, no matter what market is, market confidence is really underpinning any kind of functional market dynamic and I guess just the question is, in the market context in Alberta where quite a few PPAs returned back to the balancing pool, does that really speak to the lack of market confidence in the market structure and that there is a real need for fundamental market change?

Brian Vaasjo

So the answer to that is clearly no. And from our perspective and its trying to take these moving pieces and putting them into context. So firstly, there is the backdrop what's happening with the Climate Leadership Plan and certainly the indications we have had thus far is the incorporation of renewables and the commitment of the government has been stated over and over that they want to maintain and see a healthy energy only market. All actions seem to be confirming that.

So when you look at the issue around compensation again, we expect a positive outcome from that. Then it gets to the particulars of the market price today and the economics and recognizing that the PPAs were a 20-year construct and near the end of their life, contractual provisions have kicked in that allows those contracts to be pushed back to the balancing pool, which is a reflection of economics, not a reflection of market fundamentals.

As you move forward to 2020, 2021 and those time periods as almost everybody's expectations are that you will see very robust prices reflecting, certainly the first wave of coal retirements and the need for new generation in the province. And again looking at it from a fundamental perspective, our view is when you look at the series of retirements that are going to be taking place, some sooner rather than later, but certainly through to the end of 2030, it actually is reflective of very, very dramatic in our market as opposed to something that would create a negative perception from a market fundamental perspective.

So we expect, as when we get through this current uncertainty, you will see a very fundamentally sound market although as it is indicative of a energy only market with low natural gas prices and a short-term overhang in supply, you have low prices. So we continue to be very bullish on the market fundamentals.

Andrew Kuske

So I presume that and maybe as a follow-up, is it fair to say and maybe to characterize, given baseball season just started, you have got some single hits for capital allocation with wind projects in the U.S., if you get wind PPAs and then maybe the home run prize is in your core market in Alberta with power initiatives like G4 and G5 on the longer term basis?

Brian Vaasjo

So certainly the visibility that we see today is on those natural gas opportunities as well as renewable opportunities here in the province. But in addition to that, we are seeing again significant renewable opportunities in the U.S. But we are also starting to see some and plan on participating in some fully contracted natural gas builds in the U.S. as well.

Andrew Kuske

Okay. Thank you.

Brian Vaasjo

So we are hoping to hit home runs from both Alberta and elsewhere in North America.

Andrew Kuske

Okay. That's great color. I appreciate that. Thank you.

Operator

All right. Next we have a question from Robert Kwan from RBC Capital Markets. Please go ahead.

Robert Kwan

Good morning. When I just look at the hedge position with Sun C dropping off, I am just wondering, is it because it was so early in the year? At this point, why you are more bullish on your 2016 FFO outlook, given you have dropped off a very high or high cost PPA and spot is quite a bit lower?

Bryan DeNeve

In terms of the implications of the Sundance C PPA, certainly it varies month-to-month. Current forwards are showing some strengthen in new pricing in Alberta during the summer months. So certainly the benefits are less during those months. But we have taken into account the implications on our funds from operations and EBITDA in our Q1 forecast.

Robert Kwan

Okay. But just really, your comments are really based on where the forward strip is right now rather than what we are seeing prevailing in the spot market?

Bryan DeNeve

Yes. We typically look at forward prices when we put together a Q1 forecast. But certainly we also have our own view of fundamental prices that are drawn in our trading decisions.

Robert Kwan

Got it. Okay.

Bryan DeNeve

So certainly those are two different prices.

Robert Kwan

Okay. And just turning to the NCIB, how you viewing this? Is it more something that you are looking at having put in place for tactical purposes? Or do you plan to methodically use it at the current level of the share price? And things to be thinking, how do you look at just the uncertainty of how Alberta unfolds, your credit rating and then although it's probably less likely with the potential for G1 and G2 PPAs to be turned back to you?

Bryan DeNeve

Yes. We have put in place NCIB. Certainly we think that's one of the tools we want to have available to us for potential capital allocation. As we have mentioned before, our primary allocation is towards our growth opportunities. So with Bloom underway, that will be where our discretionary cash flow will primarily be directed. Certainly as we see things unfold, we would expect if we see the right things unfolding with the implementation of the Climate Leadership Plan, that G4 will be underway by the end of this year. So that will also be one of our priority places to put capital. So certainly we need to look at that and then in the context of, is there going to be any potential changes in our inner discretionary cash flow, either from the compensation decision or other potential changes in the market or if something happens in G4 does get pushed out. So again, it's to maintain that flexibility to utilize our capital in the most value-added way depending on how things unfold.

Robert Kwan

That's great. If I could just ask one last question around slide 10 in the contract or the dividend and financial charge coverage. Is the merchant $40 megawatt-hour, just want to confirm that that's a gross price and not net of carbon? And the other question being, what's driving a much greater wedge between that line and the contracted margin versus what you put forward at Investor Day?

Bryan DeNeve

So the prices there, the $40 megawatt-hour price, that would be the all-in pool price. So it's not net of any carbon taxes.

Robert Kwan

Okay. And then just why is the wedge significantly wider for 2019 versus what you had at Investor Day?

Bryan DeNeve

For 2019? I don't think we showed 2019 at Investor Day.

Robert Kwan

Okay. Even the 2018 amount is significantly wider. Sorry Bryan. Got the years mixed up.

Bryan DeNeve

2018?

Robert Kwan

Yes. 2018, the lines were almost on top of each other and there was a very significant wedge.

Bryan DeNeve

Between the forward line and the merchant $40 line?

Robert Kwan

No. The $40 line and the contracted margin line.

Bryan DeNeve

Okay.

Robert Kwan

Because I assume the higher hedging in 2018 would already be in the contracted line.

Bryan DeNeve

So as we hedge more in 2018, we are now 50% hedged. And we have hedged at prices that are above the $40. So what that means is, that line lifts if we are able to sell the balance of length at $40.

Robert Kwan

But you hedged a higher amount. So the contracted margin line have risen as well.

Bryan DeNeve

The lower line?

Robert Kwan

Yes.

Bryan DeNeve

No. The lower line, it only includes what we have under long-term pooling arrangements. It does not include any of our hedging of a merchant length in the Alberta market.

Robert Kwan

Got it. Understood. Okay. Thank you.

Operator

All right. And next we have a question from the Steven Paget from FirstEnergy Capital. Please go ahead.

Steven Paget

Thank you and good morning. If the Alberta government simply retires coal and allows the market to take care of everything else, that market would probably tend to use more gas-fired power. How do you think the government might induce the addition of renewables? Do you think there could be a renewable portfolio standard for end-use consumers?

Brian Vaasjo

So what the approach that the government is taking in the announcement last November and the direction by the Deputy Minister of Energy to the AESO was to develop a program that was basically inducing participants in the renewable market by basically providing them a top-up and there will be, for example, at the end of the tier an expectation that there will be a call for additional renewable energy in the province and the bidding process will be how much do you need from the government to move forward with your project on basically erect basis. So we will be competitive at the generation level and the government has not been and we don't anticipate will be setting renewable energy standard.

Steven Paget

Thank you. 2016, with the put back of the Sundance C PPA, it seems to me, you would be long about two terawatt-hours of contracts without backup generation. Is it at all possible you could make this up with your peaking uncontracted generation in the province? Or will you need to buy more power? And if you need to buy more power, why not buy it now at low prices?

Bryan DeNeve

I think that's a good characterization. So certainly there are periods of time where we won't be able to fully back our position with our peaking. Our decision whether to buy that power now, it all depends on our view of our fundamental prices versus forward prices.

Steven Paget

What do you think of the spread between the two right now?

Bryan DeNeve

That's information that we don't share publicly.

Steven Paget

Very well. Thank you, gentlemen and good morning.

Operator

All right and next we have a question from Ben Pham from BMO Capital Markets. Please go ahead.

Ben Pham

Hi. Thanks. Good morning. A couple of clarification questions. Are you still committed to your dividend growth targets you highlighted last Q?

Brian Vaasjo

So I think Ben, very much the way we talked about it at Investor Day. Our dividend growth and dividend expectations are based on our contracted cash flow and relative to what are obligations are. I think as Bryan went through the slide and demonstrated that that in fact that positioning is stronger than it was back in during Investor Day. So our position hasn't changed.

Ben Pham

Okay. Are you prioritizing that over share buybacks?

Brian Vaasjo

Yes.

Ben Pham

Okay. And then just on your, I had a couple of questions on a couple of commentaries you guys had on the hedges for 2016. Did you guys say that you bought back some hedges with the Sundance PPA termination of production runoff?

Bryan DeNeve

No. I don't think we have commented either way on that. I think what we have said is that by no longer having the Sundance C PPA that's reduced our length and we are making decisions on whether to buyback that length depending on our view of fundamental prices versus forward prices in the market.

Ben Pham

Okay. And then you also mentioned you are backed up somewhat with your gas-fired peakers, but when you include your expected production from that, it's reason to assume that you would still buy some spot the residual?

Bryan DeNeve

Yes. In some periods, yes.

Ben Pham

Okay. And do you guys hedging any of the gas pricing at all with cycle being pretty weak? Locking in the spot spreads?

Bryan DeNeve

Yes. And again, it fits a similar case where we look at our fundamental view of gas versus where forwards are and if there is, we may take a position on whether to lock in the gas for potential value creation opportunity.

Ben Pham

Okay. So you haven't hedged anything but that's something that you would consider?

Bryan DeNeve

No. I didn't say that. I just said that we will hedge depending on where we see value in hedging versus not.

Ben Pham

Okay.

Bryan DeNeve

So we certainly, I can't obviously disclose what we have hedged, given the competitive nature of the market, but we make those decisions again on our fundamental view versus where the market is trading at.

Ben Pham

Okay. That's it for me/ Thanks for taking my questions.

Operator

All right. And the last question we have in the queue at this time comes from Patrick Kenny from National Bank Financial. Please go ahead.

Patrick Kenny

Good morning, guys. Just on the Sundance PPAs being turned back, can you just confirm whether or not these are being challenged by the government at all or are these terminations a done deal from a legal perspective?

Brian Vaasjo

Given that the government is considering the PPAs and looking at the situation and they made public comments on conducting legal reviews and so on and so forth. So under the circumstances, it wouldn't be appropriate for us to comment on that, other than to say, we are pretty comfortable with our right to be able to, under these circumstances, to put the PPA back to the balancing pool.

Patrick Kenny

Okay. And then, I know it's still early days in your discussions with Mr. Boston, but wondering if there has been any change, perhaps in your views on potentially converting some of your coal plants to gas-fired as part of the overall compensation package?

Brian Vaasjo

So I will comment outside of that process. Obviously we continue to look at different ways in which our plants could have a life beyond 2030 for a part of or of those facilities. So that is ongoing work and to use a term, that does minimize stranded capital. So we are doing a lot of that work on our own.

Patrick Kenny

Okay. Great. Thanks guys. That's all I had.

Operator

All right. And we currently don't have any other questions in the queue.

Randy Mah

Okay. If there are no further questions, we will conclude our conference call. Thank you for joining us today and for your interest in Capital Power. Have a good day everyone.

Operator

Ladies and gentlemen, this concludes Capital Power's first quarter 2016 conference call. Thank you for your participation and have a nice day.

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