Hut 8 Corp. (HUT), through its joint venture Far North Power Corp. with Macquarie Equipment Finance Ltd., has secured five-year capacity contracts for all four of its Ontario-based natural gas-fired power plants.
The contracts, awarded by the Ontario Independent Electricity System Operator or IESO through its Medium-Term 2 (MT2) auction, will begin on May 1, 2026, and cover 310 MW of nameplate capacity across Iroquois Falls, Kingston, Kapuskasing, and North Bay.
The agreements offer a weighted average capacity payment of approximately CAD $530 per MW-business day in the first year, with partial inflation indexing.
Hut 8 CEO Asher Genoot credited the company's strategic and regulatory expertise for the successful bids, calling it a value-accretive move that maximizes power asset returns. Macquarie's Joshua Stevens noted the contracts bolster Far North's long-term role in Ontario's increasingly constrained power market.
Key highlights include a stable, five-year contract with a government-backed counterparty rated AA3 (Positive) by Moody's, providing strong credit assurance. The shift from short-term seasonal agreements to fixed long-term contracts enhances revenue predictability and reduces earnings volatility. Additionally, the contracts present an opportunity for incremental income from energy sales, supported by Ontario's projected 75% electricity demand growth by 2050 and an anticipated 5.8 GW capacity shortfall by 2030.
Wednesday, HUT closed at $21.08, up 14.07%, and rose further after hours to $21.33, gaining 1.19% on the NasdaqGS.
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