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Investing.com -- Hut 8 Corp. (NASDAQ:HUT) stock surged 12.9% after the energy infrastructure company announced that its four natural gas-fired power plants in Ontario have been awarded five-year capacity contracts with the Ontario Independent (LON:IOG) Electricity System Operator (IESO).
The contracts, which will commence on May 1, 2026, were secured through the competitive IESO Medium-Term 2 capacity auction for the portfolio of power plants owned and operated by Far North Power Corp., a joint venture between Hut 8 and Macquarie Equipment Finance Ltd. The four sites—Iroquois Falls, Kingston, Kapuskasing, and North Bay—represent 310 MW of nameplate capacity.
According to the company, the contracts include a weighted average capacity payment of approximately CAD $530 per MW-business day in the first year, with partial inflation indexation that could lead to increases over time. This arrangement provides Hut 8 with more stable revenue compared to its previous short-term seasonal capacity agreements.
"Securing these contracts is a testament to the commercial and regulatory fluency of our power-native team," said Asher Genoot, CEO of Hut 8. "It reflects our proactive approach to portfolio management and our focus on identifying value-accretive opportunities to maximize returns on our Power assets."
The contracts position the company to benefit from Ontario’s projected electricity demand growth, which the IESO forecasts will increase by 75% by 2050, with a potential capacity shortfall of up to 5.8 GW by 2030. Hut 8 noted that the government-backed counterparty is rated AA3 (Positive) by Moody’s, adding creditworthiness to the arrangement.
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