Brookfield Renewable Partners L.P. (BEP) Q3 2013 Earnings Report, Transcript and Summary

This is the Chorus Call conference operator. Welcome to the Brookfield Renewable Energy Partners 2013 Third Quarter Conference Call and Webcast. [Operator Instructions] At this time, I'd like to turn the conference over to Mr. Richard Legault, President and Chief Executive Officer of Brookfield Renewable Energy Partners. Please go ahead, Mr. Legault.

Thank you, operator. Good morning, everyone, and thank you for joining us this morning for our third quarter conference call. With me on the call is Sachin Shah, our Chief Financial Officer. Before we begin, I would like to remind you that a copy of our news release, investor supplement and letter to shareholders can be found on our website at brookfieldrenewable.com. I would also like to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks and our future results may differ materially. For more information, you're encouraged to review our Form 20-F and other regulatory filings available on SEDAR, EDGAR and also on our website. As we near the end of 2013, we can look back on the year and be pleased with the continued success of our operating and growth plans. This month, also marks 2 years since Brookfield Renewable was launched as a global listed pure-play renewable power company. In that time, we've been able to expand our platform, increase cash flows and raise our distributions, all while strengthening our financial position and delivering strong returns to shareholders. During this period, we have made considerable investments in building our organic growth prospects with a view to an improving economy, stronger power fundamentals and eventually rising interest rates. In that regard, there are 4 themes that we continue to focus on internally, which we believe will drive the business forward. First, we continue to look globally for new assets, and in particular, are focused on acquiring merchant assets underwritten based on the current low price environment, which we believe will provide the business with significant cash flow upside in the future. This is most recently exemplified by the acquisition of 85 megawatts of hydro assets, which we announced last week, bringing the amount of market-based hydro we have added in North America in the past year to approximately 1.3 million-megawatt hours. Second, we've spent significant time in the last 12 months focusing on teams -- our teams on prioritizing our 1,800-megawatt development pipeline. We have a number of projects in the advanced stage of development and subject to pricing will advance these 2 to construction phase. Accordingly, we believe we can deploy 500 million of equity at premium development returns over the next 5 years. Third, vast majority of our assets continue to benefit from contractual inflation protection, which over time, improves our margins and enhances returns. Additionally, with more than 200 facilities and $17 billion in assets, our operating platform benefits from our cost structure and scale that allows us to operate and integrate assets with high-efficiency and at very low cost. Finally, we've been diligent with our capitalization profile, locking in low rates over the last 24 months, pushing out our maturities and lowering our cost of capital. As a result, we believe that the business remains very well-positioned for cash flow growth and distribution increases that are comfortably at the higher end of our 3% to 5% distribution growth target. By virtue of these organic initiatives alone, as I know, as you know, we remain focused on strategic acquisitions, which will allow us to expand our global footprint, penetrate new markets and diversify into new technologies. The recent launch of a number of dedicated private funds and publicly traded renewable power investment vehicles in North America and Europe is indicative of the growing attractiveness of our industry and the significant level of capital being allocated to this sector. In that regard, our long-term track record of value creation, strong organic growth profile, global M&A mandate and unique hydroelectric focus position us extremely well within this universe. Our business prospects have never been stronger. We remained confident in our ability to produce attractive long-term performance for shareholders and continue to target investment returns of 12% to 15% overtime from our high quality scalable portfolio of renewable power assets. I'll now hand the call over to Sachin to discuss our financial and operational results.

Thank you, Richard, and good morning. The business continued to perform well in the third quarter. Total generation exceeded 5,100 gigawatt hours in the quarter, consistent with long-term average and substantially ahead of the same period last year due to contributions of new assets and a return to normal inflows, following unusually dry conditions in 2012. Hydroelectric generation was more than 2,000 gigawatt hours higher than the prior year with new assets performing above expectation and contributing 850 gigawatt hours of the difference. Results so far in the fourth quarter have been in line with long-term average. Generation from our wind assets was below long-term average in 150 -- 140 gigawatt hours higher than the prior year, reflecting the successful integration of our California wind assets acquired earlier this year. For the third quarter, adjusted EBITDA was $260 million and funds from operations was $108 million, both in line with plan and substantially above the prior year's results. As Richard indicated, the business possesses a number of organic drivers that we expect will enable us to continue to grow distributions within the high end of our stated range of 3% to 5% annually. In addition, our investment teams are seeing a very robust level of opportunities coming to market in North America, Brazil and Europe, which we believe positions us well to meet or exceed our longer-term 12% to 15% total return targets. Accordingly, in this environment, we have been very focused on maintaining a high level of liquidity. At the end of the third quarter, we've increased liquidity by $200 million over the prior quarter and almost $600 million over the year end to more than $1.2 billion, reflecting strong operating cash flows and increase in our corporate credit facilities and proceeds received from institutional equity partners in connection with our 360-megawatt hydro portfolio in Maine acquired earlier this year. This is in addition to committed private equity capital, giving us tremendous financial flexibility to pursue transactions globally. That concludes our formal remarks. Thank you for joining us this morning. Richard and I would be pleased to take your questions at this time. Operator?

[Operator Instructions] First question is from Juan Plessis of Canaccord Genuity.

As you mentioned your focus and some of your recent acquisitions have a larger component of merchant exposure than what you've traditionally been exposed to. And I appreciate that you see upside to benefit if power prices rise. With some of your facilities up for re-contracting in coming years, you have the opportunity to increase your exposure to the merchant market. Just wondering if you can update us on your preference to hold merchant production or perhaps tell us what you're thinking in respect to what percentage of production you'd like to have contracted versus open going forward?

Sure. It's Sachin here. So I guess, we benefit from starting with a very high level of contracted assets. If you look, currently, over the next 5 years, with our existing portfolio, we still have 80% of the business under contracted proportionately to BREP. Over the next 5 years, if you think about the 20% that's largely uncontracted, much of that was acquired in the last 12 to 18 months and what we -- what we're trying to position the business for is in this environment, if we're able to underwrite new investments in the $40 to $50 price environment that we see today, we think we're positioning the business very well to deliver reasonable cash flows during that period from the new assets, but have significant upside to rising prices as the economy in North America recovers, GDP growth continues to come back to that 2% to 3% range. And as demand comes back from -- put to pre-recessionary levels. So, I think, when you talk about adding incrementally new uncontracted assets, we are doing that, but we're starting from a very high base of contracted cash flows. And what we haven't done is dramatically change the risk profile of business. In terms of targets, we don't put a target out there specifically in terms of what we would like contracted versus uncontracted. But I think we recognize cash flow stability as important, and I think the balance of this portfolio will always be tended towards contracted. I don't think we'll get lower than 70% over time, but we haven't put a specific target. I think it will be opportunistic dependent.

Okay, but just to clarify, you are comfortable holding 20% merchant exposure a couple of years out?

Absolutely. If we're able to acquire in this price environment, we were absolutely comfortable with that. And then we would work patiently to provide accretive returns to shareholders through contracting that out over the longer-term.

Okay. In the letter to shareholders, you mentioned that you believe and in your -- in Richard's comments, that you believe that you could deliver distribution increases at the higher end of the annual 3% to 5% targeted range, over what period is that for?

I think when we look out, it's Sachin again. When we look out over the next 3 to 5 years in terms of our plans, setting aside the M&A environment because I think you've heard us say often that it's a very robust environment. But if you just look at the business today, excluding M&A, we've got -- and we've added merchant positions, we've added approximately 1.3 terawatts of proportionate merchant generation to the business in BREP. We got inflation escalators in all of our PPAs. We've got a scaled portfolio that allows us to keep costs very low, so we can grow our margins over time. We've got a development pipeline that's very robust and it's looking better as the economy recovers. And I think we've been publicly saying that we think we can allocate $500 million of BREP equity at 15% to 20% type returns just with our pipeline. And if you recall, when we sized our distribution, we did it in a way where we achieved long-term average generation. We're left with about $100 million of cash flow in the business to reinvest. So largely fueling that development pipeline without the need for new equity in the business. We think that all of those levers just sets us up really well organically to deliver in the high end of the range. And we think M&A then supplements that and allows us to meet or exceed that longer-term. So it's kind of in that 3- to 5-year range.

Okay, great. And my final question here, you changed the distribution payment date. What was the rationale for that?

Sure. So, as you can imagine, a number of our investors institutionally and retail-wise hold more -- hold other Brookfield companies, not just Brookfield Renewable Energy Partners. And so what we've been hearing increasingly from a number of shareholders in the group broadly was that they would appreciate having all of the Brookfield group companies pay dividends on the same date. So this was to accommodate shareholder requests, and we complied.

The next question is from Bert Powell of BMO Capital Markets.

Question just relating to the development projects. If I'd look at what you've typically been talking about, you're heavily skewed to hydro, one project in particular in Brazil. I'm just wondering if you can give us your thoughts in terms of where you would see, is that kind of the opportunities set today? Or if there's anything in addition to that, that you would highlight as places for how that $500 million of equity to go?

Sure. Hey Bert, it's Sachin. So you're right, we have highlighted Brazil. I'd say, if you recall, much of the development I'd say about half of our development pipeline is in Brazil and it's very strong, it's all small hydro. So it's all the 150-megawatt hydro consistent with the portfolio that we operate today. Prices in Brazil continued to go up based on demand growth in that marketplace. Contracting prices are going up and the ability to contract for term is getting better year-over-year. And so we feel quite strongly that our development pipeline there for the next 3 or 4 years will allow us to invest in at least 3 to 4 projects in the near-term and potentially 6 or 7 over the next 5 years. We have, obviously, Kokish underway in North America, that's in the construction phase. We've got a solar project that we've talked about in Puerto Rico that we acquired with the Western Wind portfolio. So we've got a pretty healthy pipeline of different technologies and different geographies. But clearly, Brazil today is the larger focus.

When you say 3 or 4 near term, what, those have been under development for some time? When do you make the final investment decision on those?

I'd say in the next 24 months, you'll -- we can -- we'll have a few of those. If we make the decision based on pricing and our ability to contract those assets, then I'd say within the next 24 months you'll start to see us move from advanced development into construction.

Okay. And I know Europe is always talked about as an opportunity, and it's been referenced in the past. I'm just wondering if you could give us your updated thinking. I know there's some -- that's more of a platform kind of thought, but I'm just wondering what you're thinking is with respect to acquisitions in Europe these days?

Yes, Europe I don't think it's a surprise to anybody or everybody in this call would certainly know about the economic malaise there and the fiscal situation of many of the countries. I think the biggest differentiator for us is that we have a significant access to capital. And we have a strong balance sheet and ability to execute very quickly on transactions. So if you combine that with our operating expertise that we bring from North America and from Latin America, we just bring something to that market in terms of access to capital and speed to deploy capital as a huge advantage. There are a number of either government entities or utilities or private investors there, who have monetization plans under way, largely because they're trying to sort out their own balance sheet considerations. And we just feel it's a pretty opportune time for us to start to enter that market with a view to overtime, building a platform consistent with what we have in North America and Brazil today. So we think there over the next 5 years, this will be a great place for us to allocate capital. We think we can develop a platform there. We have investment teams on the ground there. And we're actually building up a small pool people in that marketplace. And we're just fans of the ability to underwrite today in that environment of very strong returns.

Okay. And just lastly, just a quick question, on the 70 megawatts or the 375 gigawatts that you picked up on Maine, what do you actually end up owning proportionate of that?

It will be 40%. So that's a good question, Bert, just more broadly I guess in case somebody asks us. With this private funds, we would generally in BREP pickup, somewhere between 40% and 50%. So if you're trying to model that out, I'd say a baseline assumption would be in the 40% to 50% range depending on each investment.

The next question is from Nelson Ng of RBC Capital Markets.

Just in terms of the long-term average generation. I'm just wondering whether you have a similar number or whether you break it out to identify what the generation for Brookfield Renewable share is relative to the long-term average.

We do, Nelson. I don't have it at the tip of my fingers, but we will call you right after this call and we'll give that to you. We have it in our supplemental, in fact, I think I believe it's in the appendices.

Okay, great. And the next question I have is in terms of the -- in terms of common equity needs, can you talk about your general need for equity. I think in the past year, Brookfield Renewable has acquired a number of assets, but you haven't raised any equity to fund it. And I think a lot of the acquisitions are funded through I guess debt refinancing, free cash flow and I guess other end credit facilities. So I am just -- wonder whether you can comment on your -- like where you are in terms of your need for common equity?

Sure. So I'll start with just we have no immediate or near term need to raise equity capital in the business. I think, fortunately, we've had a year above the long-term average. Even at long-term average, we're pretty conservative in sizing our distribution. And we obviously don't pay out all of our cash flows. We pay out somewhere in the 60% to 70% range, so that leaves us with a few levers. One that leaves us with substantial excess cash this year in excess of $100 million of cash to fund growth to pay down our bank lines. We have a balance sheet that's investment-grade and has pretty low debt levels, 40% debt-to-cap. So we've been able to pull capital out of assets this year. We've probably -- we pulled out close to $200 million this year in terms of financing some of our wind facilities in Ontario. And we've raised our bank lines. We've got 4-year bank lines with a group of global banking institutions at very low rates. And we've raised that by $300 million this year, so all in all, what we've been able to do is really protect the balance sheet and the more we can pull capital out of assets, keep the risk profile the same for shareholders and not dilute the stock, in the end, we can generate better per share cash flows, which is good for all of our shareholders, which is what we're trying to do.

Okay, great. And then just one last question. In terms of your development pipeline, you mentioned that half of it is in Brazil. In terms of the remaining pipeline, I guess, how much of it is wind versus solar or hydro?

It's very little solar. It's the 1 project we have that we acquired this year. And then the balance I'd say is about in North America is more skewed towards wind. It's probably about 60% wind, 40% hydro.

The next question is from Matthew Akman of Scotiabank.

Couple of questions, in your development pipeline, I wanted to ask how you're doing on the Western Wind assets that they had and whether you're making progress on some of those development projects in the Southwest?

It's Richard. I can tell you that today, our focus on the development front on that portfolio has been really sort of the solar project. It was the most advanced, and ultimately, needed the most attention in the short-term. I think that we've been looking at the rest of what we acquired and continue to move those projects forward, but I would say the key ones that we actually will focus on overtime was the Arizona development. And I believe that those will find the right -- if the contracts were available, which we don't think they are at this stage, we would push them further. So they are part of our development pipeline, will continue to be part of our development pipeline. And hopefully, we'll build them over time.

Sorry, the solar in Arizona contracts might be available or won't be available?

No, these aren't the solar, there were some wind projects in that area at very early stage. And I think the solar project is in Puerto Rico.

Right, okay. So what would you'd be working on there is wind primarily in California then?

And I think it would be wind in California, but we have probably better projects at this stage that would take precedence if we were to actually sort of try and service a contract in that jurisdiction.

Okay. Can you confirm whether you've done any recontracting in Brazil at all? It looks like maybe not from your open position next year?

No, if you, in fact, it's the opposite of that. If you go back to last year's disclosures, you'd see that we had probably about 600 or so megawatt hours come in due in Brazil. We've largely -- in 2014, we've largely recontracted all of that for 2014. It's a healthy price environment. There are currently, what we're trying to do is obviously push for a term. But where we see an ability to recontract at prices that reflect the current healthy level of demand, we're doing that. So we are pushing our contracts. And we effectively recontracted all of our 2014 exposures in Brazil, albeit for a very small amount.

Okay, I guess the new open is more in the acquisition front than what you guys require.

That's correct.

So directionally though in Brazil then, it sounds like better pricing?

Absolutely, yes.

The next question is from Andrew Kuske of Credit Suisse.

Maybe this is a question for Sachin. And it just relates to some sort of co-investment strategy with some of the Brookfield funds, just give us some clarity on how the cash flow actually flows out of those funds that you co-invest into BREP?

Sure. You mean once an investment is made, Andrew?

Yes, exactly. Once an investment is made on let's say a specific facility and on how you actually receive the cash flow?

So the investors in our private funds are IRR-driven, which is -- which means that the more cash flows you pay out earlier, the better returns are and the better -- and the more we have happy investors and correspondingly happy shareholders in BREP. So we pay quarterly distributions out of the assets. Those quarterly distributions, whether we own them directly in BREP or we own them through a fund, those quarterly payments get made out to investors or to facilitate our distributions in BREP. There's no different model in terms of the privately held or the assets held in institutional funds. It's not like we're changing the distribution profile. And our motivation is to payout all of the cash flows as often as we can.

So you essentially have a matched up, well I guess, the payout ratio would be 100%, as much as possible matched up as far as possible on the dates?

Yes, and I think the luxury we have is we don't finance those assets any differently, they're all nonrecourse project level financing. There's no different covenant packages. So, ultimately, we get to manage those assets exactly the same way as all the other assets we have in our portfolio. And because we use a pretty modest level of leverage or size to investment grade, all the cash flows are largely being flowed up and paid out to the owners.

Okay, that's really helpful. And then maybe a bigger broader question for Richard. Just on geothermal, and I know we've talked about this in the past, but do you have any updates on your view on geothermal, especially as you look around the world for assets?

No, I don't think that there's anything to add this quarter. And certainly, I think we continue to think it's an interesting technology. We continue to think that it's a very small market. Very little has actually surfaced as opportunities for us. So we've been turning our attention mostly to, I would say, looking at a second owner strategy on solar. They're probably a lot more deal flow in that respect and certainly, I think, like I say, there's been very little movement in geothermal, Andrew.

And then, I guess, just a follow-up. What's driving the second owner strategy in solar? Is it really overly rich? Or lack of performance on certain facilities?

I think the fact is that we're save and except the project in Puerto Rico, which we think if we could certainly get it to the point where it had a reasonable return for the risk profile of the project, we would be happy to build. When we look at solar, we just think right now, if we were to invest in solar, we would actually invest in an operating portfolio of assets contracted for the long term and build our understanding of the technology even more. It's a little bit -- it's not all that different from what we did in wind when we first built print, but then started to look at being a little bit more cautious. We bought some of the projects that we currently have in the 1,000 megawatts. Obviously, Ontario we have more of a built strategy. In other jurisdictions, we had, buy as a second owner. So we think solar is -- obviously, you're not going to see us swinging for the fences on solar and buying huge portfolios, but if we could buy a reasonably sized portfolio for the right value, we'd be happy to do that.

The next question is from Steven Paget of FirstEnergy.

You've discussed a 60% wind and 40% hydro development potentially in North America. How much of each would be contracted? And would any of it be merchant?

So Steven, I think -- it's Richard. I will clarify that for you. We would not build in North America an asset that doesn't have a long-term contract. So none of it, the 60% or the 40% would be built if we can't secure a long-term contract for that.

So here given that you want to, of course, use nonrecourse project debt, the contracting is a must?

It's not just the contracting side. Keeping in mind that when we buy an asset in the current environment and you're buying a hydro asset, and the market environment is $40, when you're building a new wind farm and you need $110 to $120 over 20 years in order to make it work, there is a really large difference between those 2 economic proposals. So we think that investing in an acquisition at $40 power is a really good investment because it's probably, I'd like to call it rightsized risk, it is unlikely that prices will fall much below $40 and a lot more likely that prices will rise above that level. But if you build a new plant and you build it on a merchant basis, we've never been fans of that because the initial build just really requires strong financial support in order to actually finance it, but also to protect the value of your investment going forward because then from $110, there is a high likelihood that prices could be lower than $110 and a very unlikely scenario that it will be above $110. So that's how we think of those value proposals.

And Steven, just to add one thing, in North America today, the arbitrage between buying assets in this price environment and to Richard's point is far better than building. So when we look at those 2, it's deploying capital either way, one just has a higher risk profile and you have a higher return requirement. Today, the arbitrage to buy in North America is far stronger. So you've seen us dedicate much of our growth strategy in North America to buying in particular merchant hydro. In Brazil, because prices have gone up that arbitrage is going away and our pipeline is getting stronger and that's what we're trying to lay out to shareholders.

That's excellent. When you look at buying the merchant hydro, you've had success and yet I'd continue to hear that the space is jammed here. You are continuing to be able to find things to buy? Is that simply because you can actually come at the seller with a credible financing strategy with that and the scale -- the seller knows that it will be executed, et cetera?

Yes, I mean we've heard that as well. If there's still a tremendous amount of hydro in North America that's held by utilities, that's held in private funds, that's held by government and we're not suggesting that governments are, in any way, selling hydros today. But there's a lot of hydro out there, that trades, and we tend to, because of our operating expertise, our ability to manage the regulatory environment, deal with stakeholders, the scale that we bring to this business and the ability to create economies of scale, we're very competitive in this environment. And we tend to be able to bring that competitive advantage to transactions. So we're not worried there's nothing left to buy in North America. We think the opposite there's a tremendous amount and we'll keep leveraging our advantage.

Is there a lot of what you might call corporate hydro, I remember you bought those assets of ALCOA.

Yes absolutely. That's the other -- that's the fourth group that I would highlight. And we've been very successful in 15 years buying from industrials. And so that group continues to exist in North America and it's a cost of capital gain for them. They want to put proceeds back into their business and we're a logical partner in that regard.

And if I can -- it's Richard, if I can just add the more our strategy becomes more global, the bigger that universe grows.

Right, you mean in other countries?

Correct.

Okay. Could you finally, discuss regulatory risk in Brazil now that we're a year post the proposed measures in the sector?

I most certainly can, it's Richard. I think, if you go back I would say when this started and there was a push by the current government to reduce rates to consumers, it obviously, sends shockwaves through a whole bunch of people that had investments there and wondering after a very probably more than a decade of regulatory stability, what did that all mean? Our position was quite clearly that the actual reduction of rates, when you actually have a need that grows at 4% to 5% was something that was extremely difficult for our government to deliver on. And I wouldn't say we feel vindicated, but we certainly, I think, feel that we weren't wrong in our assessment that rates and prices would rise in Brazil, as a result of the slowdown in construction. So the supply response has been very slow. Government has been trying to cap options at prices that just does not resonate with people that are, have projects in their portfolios and they've been essentially not receiving as much response from the supply side as they would've hoped. So there is clearly also other signals where the government is now including thermal assets in price signals particularly in spot price-type metrics, and that has increased short-term prices to a level where now, long-term contracts are a lot more attractive to buyers of power in Brazil. So I would say things have actually, I would say the new normal is back to where they were before. The government is lacking the infrastructure to support growth in the country and prices are now gravitating very quickly back to levels that we feel will actually trigger a supply response. So this may not sort of -- it's a long way of answering your question, but I would say we're quite bullish in terms of what prices will do in the next 24 months. And when we look at what is being built today, there is a lack of supply for what essentially is the demand growth in that country, which is always very positive dynamics no matter what the regulatory risk is.

Which makes you more bullish on development, the 150-megawatt hydro in Brazil developments that you have?

It's always been our call it our sweet spot, we just think this allows us to do things at a level where we're much more comfortable with the risk profile of these investments. Large projects carry very large risks in Brazil. When we look at 50 megawatts or less, we can actually do those projects have performed extremely well, delivering on them. So we see that as kind of our space. And also, I think contracts today, when we look at sort of what we have in front of us, if you see us building new hydro plants, I think to compliment Sachin's answer earlier on, it will likely be in Brazil and it will be in the smaller space of less than 50 megawatts in the next maybe 24, but I would say I wouldn't be surprised if it was less than 24 months.

The next question is from Michael Goldberg of Desjardins Securities.

Want to follow up on one question. In the past as you said, you bought hydro capacity from industrial users and now BIP talks about acquiring infrastructure from industrial users also possibly including hydro. So if there are purchases of hydro from industrial users, how do you sort out who does it between BIP and BREP or ultimately looking at it, who invests in the funds that make the purchases?

So Michael, I can tell you that in -- from any seller of assets, hydro assets and wind assets would be for BREPs account and ultimately, we have -- we will be doing any acquisition of that type of asset. So BIP would not be buying any hydro assets whether it from public sellers or industrial sellers. So just to clarify that. So today, if they're buying industrial call it infrastructure, that would be more likely transmission infrastructure potentially water treatment systems, I'm not going to speak for BIP, but it would not be hydro facilities.

Okay. Another question. If you could just clarify what U.S. assets specifically increased your U.S. hydro long-term average generation by 650 megawatts year-over-year? And what's included in the other category of generation where the long-term average is now 240 up from 97 megawatts last year?

Michael, it's Sachin. I will call you back after this call, and we can go through that.

Okay. And my last question, just to clarify, your 3% to 5% distribution growth target I understand is based -- just on organic growth, acquisition opportunities that you mention could add growth to the distribution over and above that range. Am I correct in that interpretation?

Yes.

The next question is from Sean Steuart of TD Securities.

Just a couple of questions. Can you give us any update on Lake Superior negotiations with the LTA on a new contract for that asset?

Sorry Sean, you mean on the gap facility in Ontario?

Correct, yes.

Listen I think the LSP facility in Sault Ste. Marie has been a very important contributor to the Northern Ontario electrical system for 20 years. So the contract comes to an end early Q2 of 2014. We've been in discussions with the various sort of the OPA, et cetera on renewing this as probably other nodes have been in that those discussions as well. We're certainly positive about the contribution this asset makes to Ontario in the future, but at this stage, I'll just sort of finish off on the fact that we're in discussions at this stage and discussions are constructive.

Okay. And my other question is just on the Maine and California acquisitions, I appreciate you guys are taking a stake in those deals, but can you give us the purchase price for those acquisitions?

Unfortunately, Sean, we are just precluded in our seller agreements to disclose that, which is why we didn't put it in the press release.

Your next question is from Brian Hikisch of Raymond James.

Just one question on the quarter. Can you just please provide a bit more detail on the wind platform coming in below the long-term average. Just wondering if there's any material downtime for maintenance in there. And if you'd expect top line to trend closer to the long-term averages within the next quarter.

Hey Brian, it's Sachin. No, material downtime for maintenance. Clearly, we would expect every quarter to be above or below average. This portfolio continues to perform in line with our expectations. We think we have very sound averages. That being said, we're -- it's early days, we're 1.5 year largely into our portfolio in California and about 4 or 5 years into our portfolio in Ontario. I think we've been happy with the performance of the portfolio, but this quarter, we did come in slightly below average.

There are no more questions at this time. I'll now hand the call back over to Mr. Legault for closing comments.

Well, again, once again, thank you for joining us this morning. And we really do look forward to speaking to you on year-end results in our next quarter call. Thank you very much.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.