Alberta Power: Fed-AB MOU Progress On Carbon Supportive Of Investment Climate

Research evidence excerpt

Alberta Power: Fed-AB MOU Progress On Carbon Supportive Of Investment Climate

TD Cowen

Global Research May 19, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

For the thermal-weighted Independent Power Producers (IPPs), our valuation methodology

utilizes a segmented sum-of-the-parts valuation methodology. For regulated utilities, we focus

on a relative valuation using the following metrics on an equally weighted basis: EV/EBITDA,

Dividend Yield, FCF Yield, and P/E.

Investment Risks

Independent Power Producers - Business Risks (CPX, TA)

Primary business risks for unregulated IPPs include fluctuations in wholesale power prices or

natural gas, and potential operational disruptions. Regulatory risk is also relevant due to the

potential for unanticipated changes to power market design, regulations, or environmental

laws (including changes to carbon pricing regimes). Other business risks include fluctuations

in general economic conditions, risks associated with capital cost overruns, project delays,

recontracting, completing and integrating potential acquisitions, and access to capital

markets. As dividend paying equities, share prices of IPPs are exposed to the risk of rising

interest rates, given their positioning as yield-oriented investments.

Utilities - Business Risks

Primary business risks in the utilities industry involve unfavorable regulatory and policy changes

as well as physical operations risk. We view regulatory risk as a business risk for the utility

industry as regulatory decisions impact material aspects of a utility's business, including

customer rates, allowed ROE's, deemed capital structures, and capital expenditures. Political

risk is also important to note and refers to changes in government and shifts in government