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Wind farm firm sues province; $1.2B sought over offshore moratorium

A Leamington company has launched a $1.2-billion lawsuit against the provincial government for issuing a moratorium on offshore wind farms.

In a statement of claim filed March 21, SouthPoint Wind – owned by the Liovas family of Leamington – alleges that indefinitely suspending windturbine projects caused undue hardship on the company.

The $1.2-billion claim includes $100 million in punitive damages and $100 million for bad faith negotiating.

The McGuinty government announced in February 2011 that it was placing a moratorium on freshwater wind-turbine projects pending further study on possible environmental impacts. Ontario had first placed a temporary moratorium on freshwater wind farms in 2006.

“The government intends to vigorously defend the statement of claim,” Jennifer Kett, spokesperson for the Ministry of the Environment, said Tuesday. “SouthPoint Wind did not have a contract with the government.”

Kett said she could not address any more specifics since the case is before the courts, but insisted the moratorium makes sense.

“In February 2011 the government announced it is not proceeding with the proposed offshore wind while further scientific research is conducted,” Kett said. “We wanted to study scientific research that’s available now. We wanted to work with our U.S. neighbours to ensure that any future proposed projects would protect the environment on both sides of the Great Lakes.

“Offshore wind in freshwater lakes is in the really early stages of development. And there are actually no projects operating in North America right now in fresh water.”

Adam Paglione, a lawyer for SouthPoint Wind, said the company has suffered financially because of the government’s decision.

“Just because we don’t have a contract, does not mean we don’t have an action,” Paglione said. “That’s not the end of it.”

Paglione declined further comment.

According to the statement of claim, SouthPoint Wind started negotiating with the government in 2004 to build three offshore wind farms on Crown land south of Leamington, Union and Kingsville. The claim says that in 2005 the Ministry of Natural Resources chose SouthPoint Wind as the “applicant of record” for the projects.

In 2006, the government issued a moratorium, the claim says, but assured SouthPoint Wind that its special status would remain.

In 2008 the first moratorium was lifted, and negotiations continued, though the claim says discussions eventually grew more difficult.

“During the second moratorium, the MNR arbitrarily cancelled all applications for offshore wind development and revoked SPW’s Applicant of Record status, leaving it with no certainty as to where its project could be located,” the claim says. “As a result of such uncertainty, previous site specific environmental studies and reports completed at great expense to SPW were rendered useless because they related to tracts of land for which SPW no longer held Applicant of Record status, resulting in significant financial hardship to the Plaintiff.”

The claim also alleges that the government told South-Point Wind that it had to reapply for the government’s feed-in-tariff program – which pays above-market rates for green energy put into the provincial grid. Doing so caused the company further delays and hardship, according to the claim.

“SPW was required to start the process anew, with no preference or grandfathering allowable despite all of its previous efforts in that regard,” the claim says.

The allegations have not been proven in court.

The claim names as defendants the Ministry of Natural Resources, the Ministry of the Environment, the Ministry of Energy, Environment Canada, Hydro One Networks, and the Ontario Power Authority.