Capital Power Corp. (TSX: CPX) announced a binding agreement to supply electricity to an Alberta data center developer on Tuesday, less than two weeks after federal and provincial governments suspended clean electricity regulations.
The Edmonton-based power generator entered into a memorandum of understanding for a 250-megawatt electricity supply agreement with an investment-grade data center developer. The long-term contract, spanning more than 10 years, will begin in 2028 and will draw from Capital Power’s generating facilities in Alberta.
The announcement comes less than two weeks after Prime Minister Mark Carney and Alberta Premier Danielle Smith signed an energy memorandum of understanding on November 27 that immediately suspended federal Clean Electricity Regulations for the province.
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The federal regulations had restricted new natural gas-fired power generation beyond 2035, creating uncertainty for companies seeking long-term electricity contracts. The suspension aims to stabilize Alberta’s power grid and enable investments in artificial intelligence data centers, according to the agreement.
“We see an opportunity to grow our business as a result of structural growth in power demand driven by the AI infrastructure boom and the growing need for reliable and affordable energy,” Capital Power President and CEO Avik Dey said in a statement released at the company’s 2025 Investor Day in Toronto.
The Ottawa-Alberta agreement positioned data center development as a key economic priority for the province. The memorandum of understanding commits both governments to support AI-focused computing capacity requiring thousands of megawatts of power.
Capital Power has previously disclosed plans for discussions with a significant North American data center provider about co-locating a campus of up to 1,500 megawatts at its Genesee Generating Station west of Edmonton. The company describes the repowered facility as Canada’s most efficient natural gas combined cycle plant.
The suspension of clean electricity regulations remains in effect while Alberta and the federal government negotiate a new industrial carbon pricing agreement, with a deadline of April 1, 2026.
The company will receive a termination fee should negotiations with the developer fail to produce a final agreement.
Separately, Capital Power announced a memorandum of understanding with funds managed by affiliates of Apollo Global Management to form a $3 billion US partnership to acquire merchant natural gas assets across the United States.
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