- Hut 8 Corp. (HUT, Financial) secures five-year capacity contracts with IESO for 310 MW of power generation assets in Ontario.
- The contracts include a weighted average capacity payment of CAD $530 per MW-business day, commencing May 1, 2026.
- This strategic move is expected to stabilize cash flows and provide potential upside in Ontario's capacity-constrained power market.
Hut 8 Corp. (HUT) has announced the successful acquisition of five-year capacity contracts with the Ontario Independent Electricity System Operator (IESO) for its 310 MW power generation portfolio. These contracts, awarded through Far North Power Corp.—a joint venture with Macquarie Equipment Finance Ltd.—will become effective on May 1, 2026. The agreements cover four natural gas-fired power plants located in Iroquois Falls, Kingston, Kapuskasing, and North Bay, Ontario.
The contracts stipulate a weighted average capacity payment of CAD $530 per MW-business day for the first year, with potential increases through partial inflation indexation. This development marks a significant transition from Hut 8's earlier short-term seasonal agreements to more secure, fixed long-term contracts, effectively reducing earnings volatility.
These contracts are backed by a government counterparty rated AA3 (Positive) by Moody's, which substantially mitigates counterparty risk. As Ontario is facing a projected electricity demand growth of 75% by 2050 and a capacity shortfall of 5.8 GW by 2030, Hut 8's position in the market is strategically beneficial.
Hut 8's CEO, Asher Genoot, emphasized that this achievement underscores the commercial and regulatory acumen of the company's power-focused team. Joshua Stevens, Managing Director in Macquarie Group’s Commodities and Global Markets business, highlighted the long-term relevance these contracts bring to the Far North power plants in a capacity-constrained market.
For investors, this represents a meaningful enhancement in Hut 8's risk profile, ensuring consistent cash flows and potential revenue growth through additional energy sales. The company's strategic pivot towards revenue stability through these contracts complements its existing Bitcoin mining operations.
