Innergex Renewable Energy Inc. (TSE: INE) has signed a 30-year, 320 megawatts (MW) power purchase agreement (PPA) with PacifiCorp in which the former will supply power produced at its Boswell Springs wind project to the latter. The deal is expected to support Innergex Renewable Energy’s financials in the long term and, in turn, boost its stock price.
Boswell Springs wind project is expected to begin its commercial operations in the fourth quarter of Fiscal 2024. According to a report published by MarketWatch, the wind project is to be built in Wyoming.
However, the fate of the agreement depends on the final written order from the Wyoming Public Service Commission, granting the Certificate of Public Convenience and Necessity for Gateway South.
Discussing the financials related to the Boswell Springs project, Innergex highlighted that the total construction cost could touch $544 million. Meanwhile, the project is expected to generate operating cash flow of nearly $22.6 million annually.
Further, the Boswell Springs project will likely get 100% of the US Production Tax Credits (PTCs), estimated to be nearly $39.2 million annually.
Is INE Stock a Good Investment?
Turning to Wall Street, analysts seem to be cautiously optimistic about INE Stock, which has a Moderate Buy rating based on three Buys and two Holds.
INE’s average price target of C$22.20 implies 14% upside potential. Shares of the company have grown about 7.8% year-to-date.
On the contrary, retail investors have decreased their holdings in INE stock by 2.2% in the last 30 days.
Final Thoughts
According to Innergex, the PPA is a major milestone for the company’s Boswell Springs wind project. The company will witness revenue certainty over the long term with this contract. Further, Innergex expects contributions from the Boswell Springs wind project to enhance its payout ratio.
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