EDMONTON - Capital Power Corporation (TSX: CPX) today released financial results for the quarter ended June 30, 2021.

Highlights

Generated net cash flows from operating activities of $129 million and adjusted funds from operations (AFFO) of $91 million in the second quarter of 2021

Generated net income of $17 million and adjusted EBITDA of $241 million in the second quarter of 2021

Increased 2021 financial guidance for adjusted EBITDA to $1,090 million to $1,140 million (2021 target and original guidance of $975 million to $1,025 million) and AFFO to $570 million to $620 million (2021 target and original guidance of $500 million to $550 million)

Completed successful offering of common shares for total gross proceeds of $288 million

Executed a US$150 million private placement of 12-year senior notes

Extended, amended and transitioned existing credit facilities into an inaugural $1 billion of Sustainability-linked credit facilities

Increased the common share dividend by 6.8% to $2.19 per year representing the eighth consecutive annual increase

'Capital Power's financial results in the second quarter of 2021 exceeded management's expectations,' said Brian Vaasjo, President and CEO of Capital Power. 'Financial results benefitted from higher Alberta power prices where our trading desk captured an average realized power price of $75 per megawatt hour in the second quarter. This was partially offset by major outages at the Arlington Valley and Decatur Energy facilities, a stronger Canadian dollar relative to the U.S. dollar and lower wind resource availability at most of our wind facilities. Based on the strong forecast for the remainder of the year driven by a positive outlook for Alberta power prices, we have increased our 2021 financial guidance with revised guidance ranges now exceeding the top end of our original targets.'

'I am pleased to announce that the Board of Directors has approved a 6.8% per common share dividend increase effective for the third quarter 2021 dividend payment, which is consistent with our 7% annual dividend growth guidance for 2021 and 5% for 2022,' stated Mr. Vaasjo. 'The annualized dividend of $2.19 per year is forecasted to be below our long-term AFFO payout ratio target of 45% to 55% in 2021.'

'Debt and equity financing activities completed to date in 2021 were significant in reducing financing risk related to our growth initiatives, including 985 megawatts in advanced stages of development,' said Sandra Haskins, SVP Finance and CFO of Capital Power. 'With the completion of the $288 million common share offering we do not expect additional equity offerings will be required to fund our current growth projects. The successful financings and confidence in our long-term outlook are supported by the recent affirmations of our investment grade credit ratings and stable outlook by our credit rating agencies, S&P and DBRS.'

Common share offering

In June of 2021 the Company completed a public offering of 7,480,750 common shares (inclusive of the full exercise of a 975,750 common shares over-allotment option), at an issue price of $38.45 per common share for total gross proceeds of $288 million (the Offering) less issue costs of $12 million. The Company intends to use the net proceeds from the Offering to fund growth initiatives (including projects in advanced stages of development) and for general corporate purposes.

Forward-looking Information

Forward-looking information or statements included in this press release are provided to inform the Company's shareholders and potential investors about management's assessment of Capital Power's future plans and operations. This information may not be appropriate for other purposes. The forward-looking information in this press release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes.

Material forward-looking information in this press release includes disclosures regarding (i) status of, and updates to, the Company's 2021 AFFO and adjusted EBITDA guidance, (ii) forecasted depreciation for the remainder of 2021, (iii) the intended use of proceeds from the common share offering, (iv) expectations pertaining to the financial guidance, timing of construction and timing of commercial operations commencement of Enchant Solar, (v) expectations around the resolution of the pricing dispute on the Buckthorn Wind offtake and commodity swaps, (vi) the intended use of proceeds and expected closing date of the U.S. private placement of senior notes and (vii) matters relating to the LLR Proceeding, including the recovery from appropriate parties.

These statements are based on certain assumptions and analyses made by the Company considering its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate including its review of purchased businesses and assets. The material factors and assumptions used to develop these forward-looking statements relate to: (i) electricity, other energy and carbon prices, (ii) performance, (iii) business prospects (including the need for and potential re-contracting of facilities) and opportunities including expected growth and capital projects, (iv) status of and impact of policy, legislation and regulations, (v) effective tax rates, and (vi) matters relating to the LLR Proceeding, including the recovery and timing thereof from appropriate parties.

Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company's expectations. Such material risks and uncertainties are: (i) changes in electricity, natural gas and carbon prices in markets in which the Company operates and the use of derivatives, (ii) regulatory and political environments including changes to environmental, climate, financial reporting, market structure and tax legislation, (iii) generation facility availability, wind capacity factor and performance including maintenance expenditures, (iv) ability to fund current and future capital and working capital needs, (v) acquisitions and developments including timing and costs of regulatory approvals and construction, (vi) changes in the availability of fuel, (vii) ability to realize the anticipated benefits of acquisitions, (viii) limitations inherent in the Company's review of acquired assets, (ix) changes in general economic and competitive conditions and (x) changes in the performance and cost of technologies and the development of new technologies, new energy efficient products, services and programs.

Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the specified approval date. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

About Capital Power

Capital Power (TSX: CPX) is a growth-oriented North American wholesale power producer with a strategic focus on sustainable energy headquartered in Edmonton, Alberta. We build, own, and operate high-quality, utility-scale generation facilities that include renewables and thermal. We have also made significant investments in carbon capture and utilization to reduce carbon impacts and are committed to be off coal in 2023. Capital Power owns over 6,400 MW of power generation capacity at 26 facilities across North America. Projects in advanced development include 425 MW of owned renewable generation capacity in North Carolina and Alberta and 560 MW of incremental natural gas combined cycle capacity from the repowering of Genesee 1 and 2 in Alberta.

Contact:

Katherine Perron

Tel: 1-780-392-5335

Email: kperron@capitalpower.com

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