"Continued low turbine availability combined with a low wind speed at Mount Copper this past quarter has resulted in lower than targeted cash reserves prior to heading into the low summer season for wind speed," says CEO Eric McFadden. Starting in June, he says, the fund will cut its monthly distributions by 13.6% to C$0.0542 per unit "to ensure sustainability for unit holders going forward."
Mount Copper's first quarter production was approximately 30% below the independent engineer's long term projection, says Creststreet. Wind speeds well below expectations for this time of year account for about two-thirds of the shortfall, while low turbine availability accounted for the rest.
The project's 30 Vestas 1.8 MW turbines were fully operational in June 2005. Its warranty with Vestas guarantees they will operate at a minimum of 90% availability in their first year and 95% in the subsequent four years. "Although Vestas has exceeded its warranty commitment, in the manager's view, the performance of Mount Copper has been disappointing," says Creststreet. It is working closely with Vestas to "correct key problems" to ensure availability meets the warranty threshold as the project enters its second year of full operations.
The fund is also owner of the 30.6 MW Pubnico Point wind farm in Nova Scotia, where 17 Vestas 1.8 MW turbines reached full production in February 2005. During the first quarter, the project's production was about 5% below the independent engineer's long term projection. "This shortfall was due to lower turbine availability, as wind volumes were approximately equal to the projected long term average," says Creststreet.
Overall, the fund lost C$108,000 during the first three months of 2006, or one cent per unit. The company saw a loss in its unit price, which fell 28.5% to C$5 in trading on the Toronto Stock Exchange, following release of its first quarter results.