TransAlta Corp. will be closing operations at its two Sundance coal-fired units because repairs would be too costly. The Sundance 1 and 2 units have been down since December.

The units comprised 560 MW of the 2,126 MW Sundance power plant, which has six individual units and operates as a baseload facility for the Alberta electricity system. Sundance is the largest power plant in Alberta and the largest coal plant in Western Canada.

The closing of the units could cost consumers more than $200 million in unrealized refunds through Alberta’s Balancing Pool. The agency that oversees power purchase agreements would have to pay that amount to TransAlta as net book value of the plants and to TransCanada Corp. as partial payment on the remainder of its contract.
TransCanada holds the Sundance units’ power purchase agreement and expects reimbursement.

Since the units first went down, extreme cold has boosted demand and power prices up to $850 to $950/MW several times a week, to average around $79/MWh in January, substantially higher than previous months.