Hut 8 Corp. (NASDAQ: HUT) is seeing a significant upswing in the current trading session; according to the most recent check, its shares rose 14.36% to $21.13. The price spike began following news that the Ontario Independent Electricity System Operator (IESO) had given five-year capacity contracts to its jointly owned energy portfolio, including its four natural gas-fired power plants spread across Ontario.
The granted contracts cover facilities at Iroquois Falls, Kingston, Kapuskasing, and North Bay with a total nameplate capacity of 310 megawatts (MW).
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Robust Partnership Underpins Energy Portfolio
The power assets are operated under Far North Power Corp., a joint venture between Hut 8 and Macquarie Equipment Finance Ltd., a subsidiary of the globally recognized Macquarie Group Limited. The contracts were secured through successful bids in the IESO’s competitive Medium-Term 2 (MT2) capacity auction and are scheduled to commence on May 1, 2026.
Attractive Economics and Long-Term Stability
The agreement includes a weighted average capacity payment of approximately CAD $530 per MW-business day in the first year, with partial inflation indexation allowing for potential escalations.
These fixed five-year contracts are expected to stabilize cash flow by transitioning from seasonal short-term agreements, offering enhanced revenue predictability and reduced earnings volatility. Moreover, with a government-backed offtaker rated AA3 (Positive) by Moody’s, the transaction boasts high credit quality and low counterparty risk.
Positioning for Ontario’s Growing Power Needs
This development highlights the operational experience and strategic value of Hut 8’s cooperation with Far North. Additionally, it places the facilities at the forefront of Ontario’s long-term energy strategy, particularly in a market where electricity consumption is expected to rise by 75% by 2050 and capacity shortages of up to 5.8 GW by 2030 are anticipated.
The asset’s future income potential is highlighted by the possibility of further upside from energy sales into this tighter market, in addition to the guaranteed capacity payments.
