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Westmoreland amends ROVA agreement to create cash savings through 2019.

M2 EQUITYBITES-December 29, 2016-Westmoreland amends ROVA agreement to create cash savings through 2019

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Coal company Westmoreland Coal Company (NYSE:WLB) reported an amendment to its power supply agreement with Dominion Virginia Power, a subsidiary of Dominion (NYSE:D), for the ROVA contract.

Effective 1 March 2017, Westmoreland will create cash savings through 2019 as it will no longer be required to operate the Roanoke Valley Power Facility (ROVA).

As part of the amendment, Westmoreland will provide the required contracted level of energy to Dominion through power purchase contracts, in lieu of providing it by operating ROVA.

For 2017, Westmoreland continues to anticipate the release of nearly half of the USD22m in restricted cash in place at 30 September 2016.

This restricted cash serves as collateral for existing ROVA power contracts. Recent higher power prices are expected to lower the required cash collateral levels.

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Date:Dec 29, 2016
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