Ontario Power Generation sold its U.S. subsidiary last year for less than what it paid, taking a $477-million fourth quarter loss on the sale, according to the provincial generating utility’s annual report released earlier this month.
Eagle Creek Renewable Energy Inc. was sold by OPG to funds controlled by New York-based private equity giant Apollo Global Management for $1.48 billion (U.S.).
The deal included assets OPG paid a total of $1.66 billion (U.S.) for, including its initial 2018 purchase of Eagle Creek, as well as several other U.S. generating sites bought later and folded into Eagle Creek.
In a written statement, OPG said the proceeds from the sale would go toward reinvesting in power generating infrastructure in Ontario, including the refurbishment of the Pickering nuclear power plant, building new “small modular reactors,” and the “modernization” of OPG’s hydroelectric plants.
“We determined that greater long-term value to ratepayers could be achieved by redeploying capital to priority infrastructure projects here in Ontario,” OPG said in its statement. “With demand for clean electricity in Ontario projected to increase significantly by 2050, now is the time to invest in the infrastructure needed to ensure a reliable, affordable energy future for the province.”
A spokesperson for Ontario energy minister Stephen Lecce, who’s responsible for oversight of OPG, directed questions about the sale to OPG.
OPG declined to specify the cause of the $477 million (Canadian) loss associated with the sale, or why the assets were sold for less than they were bought for.
OPG said Apollo was just one of several potential buyers of Eagle Creek, which has roughly 700 megawatts of generating capacity across 18 U.S. states.
At a time when worldwide demand for electricity is skyrocketing, thanks partly to the surge in AI data centres, selling generating capacity in the world’s largest economy at a loss is a headscratcher, said Matt Sooy, an accounting professor at Western University’s Ivey Business School.
“The future of power is valuable,” said Sooy. “It strikes me as curious why they’d be selling these assets at a loss.”
In its annual report, OPG reported net earnings — which it contributes to provincial government coffers — of $1.51 billion, up from $988 million in 2024.
“The increase in earnings was partially offset by a nonrecurring pre-tax loss … related to the sale of electricity generation and development business in the United States,” the annual report noted.
If OPG were a publicly-traded company whose shares were listed on a stock exchange, they’d almost certainly need to provide greater clarity on the $477-million loss, Sooy said.
“If this were a public company, I think they’d find it necessary and appropriate to provide more detail than this,” said Sooy. “That’s not a few million dollars. That’s a lot of money. And I think Ontario taxpayers would also deserve to know … that the sale was necessary and that the process was thorough and robust.”
NDP energy and mines critic Jamie West said the loss raises the question of whether OPG maximized what it could have been paid for such a major asset.
“It might be fine, but that’s a lot of money to leave on the table,” said West, MPP for Sudbury. “Did they just decide ‘We can sell it for a song. We don’t have to wait until we get a decent price for it, because we know ratepayers are going to pick up the tab?’”
In its statement, OPG said choosing Apollo’s bid followed “a comprehensive, competitive sale process involving multiple qualified bidders.”
In a conference call with analysts to discuss the 2025 report, OPG chief financial officer Aida Cipolla said the provincially-owned generating company looked at all its assets to see which ones it could sell to help support the government’s “Integrated Energy Plan,” a blueprint to provide reliable power across the province.
“We did look very closely at all of our assets and made the decision to (sell) Eagle Creek, to bring back those cash flows here in the Province of Ontario,” Cipolla said.
In an October press release announcing the sale, Apollo partner Joseph Romeo said the company was looking to expand Eagle Creek’s holdings.
“We see significant opportunity to support the business in its next phase,” Romeo said, “further expanding the platform and providing reliable, clean power generation to meet the growth in demand.”
