Power producer TransAlta Corp. (TSX:TA) says it plans to advance a major maintenance outage on its 353 megawatt Sundance 3 generating plant in Alberta from the second quarter of 2010 into the second and third quarters of 2009.
The move will cost the company between $24 million to $28 million in lost net income for 2009, or between 12 to 14 cents a share, TransAlta said in a release Wednesday.
However that will be offset by higher earnings the following year.
Transalta said the advancement of the Sundance 3 major maintenance outage takes advantage of the current low power prices in Alberta. It also allows TransAlta to optimize both the scheduling of this work and the preventative maintenance required in the short-term for the coal-fired plant about 70 kilometres west of Edmonton.
“Combining the Sundance 3 major maintenance outage with work required this year makes economic sense,” said Steve Snyder, TransAlta’s president and CEO. “There are savings from a cost viewpoint and we believe there will be an ongoing benefit from reduced forced outages.”
As a result of the change in schedule, TransAlta’s full year 2009 planned maintenance lost output will increase e by about 380 gigawatt hours. In 2010, the company is expected to benefit from a decrease of 380 GWh of planned maintenance and a corresponding increase in net income.
Due to the capital spending improvements, the net cash benefit over the two years is between $10 to $15 million, TransAlta said. The company expects lower cash of between $45 million to $50 million this year and a cash surplus of between $60 million to $65 million in 2010.