VARNA – The Municipality of Bluewater has passed high building permit fees for industrial wind turbines in the municipality, but a legal battle may be looming.
Council passed fees which will see developers pay $434,000 per turbine, as part of an updated bylaw March 4 under the direction of Toronto-based lawyer Eric K. Gillespie, whose legal firm drafted the bylaw.
The updated fees will charge a $14,000 base permit fee, a $220,000 security per turbine for decommissioning, a $100,000 fee per turbine for matters related to health and property devaluation and a $100,000 fee per turbine for potential legal matters arising as a result of the turbines.
Gillespie told council in his view the bylaw does not conflict with existing legislation, such as the Green Energy Act.
“You may . . . hear a point of view that says there may be issues around whether this bylaw conflicts in any way with legislation,” Gillespie said. “It’s our respectful view it does not.”
Gillespie noted his firm looked at the bylaw in a practical sense, of how it would be applied in the real world and in the face of a legal challenge.
“Thought has gone into how these amounts should be applied and what seems to be reasonable and something that the municipality can stand behind,” Gillespie said. “That is the basis for the recommendation.”
He noted that’s why the firm recommended the originally proposed $25,000 per turbine, per year economic development fee be removed from the bylaw and instead levied as a development charge.
Based on the expected 20-year lifespan, the fee worked out to roughly $500,000 per turbine.
Gillespie noted the $14,000 fee has been calculated in consultation with Bluewater staff and outside consultants, adding it is believed to be a reasonable reflection of the costs that would be incurred in granting the building permit.
As well, he noted the decommissioning, health and legal securities protect the public interest, ensuring there are sufficient funds available for matters that could eventually become a concern.
Gillespie added the proposal is designed to give the chief building official discretion to decide when the securities should be refunded or drawn upon.
Following discussion, Hay West Coun. John Gillespie moved the bylaw, seconded by Stanley West. Coun. George Irvin.
In a single, 7-0 vote council gave the bylaw first, second and third reading to pass it into law. Mayor Bill Dowson, Deputy Mayor Paul Klopp and Hay East Coun. John Becker declared conflicts on the issue.
Legal action forthcoming?
Tyson Dyck, legal counsel for wind developer NextEra Energy, the developer of 52 proposed turbines in the municipality, disagreed with Gillespie’s assessment of the bylaw’s legality on several counts.
“One of the major, overarching concerns is the limitation on municipal jurisdiction to pass any kind of bylaw that frustrates the purpose of the provincial piece of legislation,” said Dyck, of the Toronto law firm Torys.
He noted the Green Energy Act (GEA), a piece of provincial legislation, has an entire regime for permitting these types of projects, adding Bluewater’s bylaw encroaches on the GEA in a number of ways.
“Any municipal bylaw that attempts to cover the same area runs into conflict with that provincial regime and is therefore, unfortunately, invalid.”
He noted NextEra feels the decommissioning fee is an encroachment on the GEA, since developers are already required to provide a decommissioning plan as part of the Renewable Energy Approval (REA) process.
“The province has kept its own legislative authority to deal with these areas and municipal bylaws that run afoul of those provincial rules or come into conflict with those types of rules can be declared invalid,” Dyck said.
He added the company feels the $14,000 building permit fee is another example of the bylaw exceeding municipal jurisdiction, noting NextEra hasn’t seen any evidence to substantiate why the fee is reasonable.
Dyck also found fault with the powers delegated to the CBO under the new bylaw, noting the Building Code Act lays out what the CBO’s powers entail.
“In our client’s view, and supported by a body of case law, any direction on the CBO to first of all, take in a decommissioning security and then assess at the end of the day, whether the decommissioning was performed to his or her satisfaction not only runs into conflict with the provincial regime that’s set out for decommissioning of these types of projects, but also directs the CBO to do something the municipality doesn’t have the legislative authority to direct him or her to do,” Dyck explained.
He also referenced a letter from his colleague John Terry of Torys, which indicated municipalities are limited to imposing fees that are reflective of the costs incurred in providing the building permit.
“It appears that the proposed fees and security deposits are in reality taxes intended to discourage wind development,” the letter states, indicating the municipality is also unable to charge fees related to unspecified legal fees.
While NextEra applied for delegation status at the meeting, Bluewater chief administrative officer Steve McAuley told council the request came in after the agenda was released, adding it was up to council if they were allowed to appear.
“No disrespect to the representatives from NextEra,” said Irvin in denying the request, “but quite frankly I’ve heard quite enough from the corporation.”
As a result, Dyck spoke to council during questions and comments from the gallery, laying out the company’s concerns with the bylaw.
He told council NextEra will now assess its legal avenues moving forward.
“Now that the bylaw has been passed tonight, (our client) is going to have to take a step back and consider all of its available legal options,” Dyck said.
He told council under Ontario law bylaws that go beyond municipal authority or are invalid, can be quashed.
“You may also know that under Ontario law there is potential liability, not only for municipalities, but also for individual municipal officials,” Dyck continued, “where there are actions taken that result in damages based on unlawful legal actions, such as the passage of a bylaw.”
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