Westmoreland Coal Co. has announced that it amended its power supply agreement with Dominion Virginia Power, a subsidiary of Dominion (NYSE:D). Beginning 1 March 2017, Westmoreland will create cash savings as it will no longer be required to operate the Roanoke Valley Power Facility (ROVA). Under the amendment, Westmoreland will begin to provide the required contracted level of energy to Dominion through power purchase contracts, in lieu of providing it by operating ROVA.
“Amending the ROVA contract is a successful step toward our goal of reducing the impact of our non-core assets,” said Kevin Paprzycki, Westmoreland’s Chief Executive Officer. “This amendment allows us to meet our future capacity obligations through purchase contracts, instead of running our ROVA facility. By no longer operating ROVA, we will reduce our projected cash flow burn by US$13 million through March 2019, with the most meaningful cash savings occurring in 2019. Additionally, we are now more aggressively pursuing the sale of the remaining physical facility. I’d like to thank the team for their great efforts in 2016 which resulted in this transaction.”
Westmoreland continues to anticipate the release during 2017 of nearly half of the US$22 million in restricted cash in place at 30 September 2016.
Read the article online at: https://www.worldcoal.com/power/03012017/westmoreland-amends-rova-contracts/