Capital Power Corp

Capital Power reported second-quarter adjusted EBITDA of $351 million, up $29 million from Q2 2025, and AFFO of $328 million, up $93 million year over year. The increase in adjusted EBITDA was mainly driven by the expanded PJM portfolio, partially offset by planned maintenance outages, lower capacity revenues in U.S. Flexible Generation, and higher corporate expenses. Year-to-date adjusted EBITDA reached $755 million, up $66 million, while AFFO was $482 million, up $29 million. The company recognized Canadian Clean Tech ITC government grants in AFFO from Halkirk Wind and Ontario Battery Energy Storage projects, with some cash expected in 2026 and the balance in the first half of 2027. Management reaffirmed 2026 guidance for adjusted EBITDA of $1.565 billion to $1.765 billion, AFFO of $890 million to $1.01 billion, and sustaining capital of $290 million to $330 million.

Avik Dey framed the quarter as evidence that the company is capturing demand and converting existing capacity into long-duration cash flows. He emphasized that Alberta is becoming more attractive for data centers and large load customers, and said the Meta deal is proof of Capital Power’s ability to monetize merchant capacity without new capital investment. His tone was upbeat and confident, repeatedly pointing to embedded growth, commercial optimization, and a balanced return strategy with growth plus a growing dividend.

Kevin MacIntosh said the company is increasingly confident in the upside already embedded in the portfolio and raised annual adjusted EBITDA upside to about $1.25 billion from about $1 billion previously. He broke that upside into approximately $400 million to $550 million of contracted upside and $375 million to $700 million of merchant upside, citing recontracting progress, stronger Alberta pricing expectations, and the Meta contract as key contributors. He also reaffirmed full-year 2026 guidance and said sustaining capital remains elevated because of a planned maintenance cycle, while noting that the company increased its dividend by 2% for 2026, marking 13 consecutive years of dividend increases.

Analysts focused on PJM regulatory changes, Alberta data center demand, Genesee optionality, and M&A. Management said the PJM rule changes were positive for incumbent generators and that bilaterals look stronger, while reiterating interest in deploying capital where opportunities are accretive. On Genesee, Avik Dey said the site remains highly attractive for data centers and could support Phase 2 bring-your-own-generation or bridging solutions, with ongoing work to increase capacity. Questions on the Meta contract, Alberta public sentiment, and Apollo partnership led to answers that the company is still disciplined, is having multiple customer conversations, and has not yet transacted with Apollo despite evaluating several opportunities.