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Municipal leaders skeptical of FIT changes  

Credit:  By WES KELLER, For the Citizen | 2013-06-06 | Orangeville Citizen | www.citizen.on.ca ~~

In what appears to be a partial return to the pre-Green Energy Act system, Energy Minister Bob Chiarelli is promising municipalities more power in the siting and approval of large-scale wind farms, and more revenue for those that act as hosts.

Although the Association of Municipalities of Ontario (AMO) has taken an optimistic view of the announced changes, saying they cover many of the points raised by it during a review of the FIT program, political leaders in Dufferin are skeptical as, for them, the announcement is vague and leaves many questions unanswered.

The announcement last Thursday, May 30, followed a regular twoyear review of the feed-in tariff (FIT) program. It defined “large scale” projects as anything more than 500 kW (1/2 MW), whereas the FIT program applied previously to all wind projects of greater than 10 kW, and micro-FIT to anything smaller.

The changes appear to be aimed at encouraging municipalities to welcome, if not to participate in, renewable energy projects. The program will now “require energy planners and developers to work directly with municipalities to identify appropriate locations and site requirements for any future large renewable energy project,” the announcement said. As well, it would “revise the Small FIT program rules for projects between 10 and 500 kW to give priority to projects partnered or led by municipalities.”

In the announcement, Mr. Chiarelli said the ministry would develop the competitive process by “working with the Ontario Power Authority (OPA) and municipalities.” In a media conference call on Friday, he described that process as “fine tuning.” The fine tuning would include working with municipalities “to determine a property tax rate increase for wind turbine towers,” which are currently subject to an assessment cap of $40,000 per MW capacity. But Mr. Chiarelli didn’t promise Friday that the cap would be removed. AMO says it will be monitoring the implementation of changes, and reporting to its members.

Meantime, it is saying one major change is the requirement for developers to work directly with municipalities for all future large renewable energy projects. “A crucial component will be determining how developers will work directly with municipalities before contracts are awarded.”

AMO is also seeking clarity on the tools available to communities who are unwilling to host large renewable energy projects; a dedicated municipal allocation for FIT. The FIT program will be amended so that municipalities are eligible for priority points, have access to “soft costs” and are eligible for “set-asides” under the procurement target. There will also be an increase in property tax assessment on turbines, and small and medium municipalities will be eligible for funding for Municipal Energy Plans, which align infrastructure, energy and land use planning.

Historically in Dufferin, Melancthon hosted the first commercial-scale wind farm in Ontario following some negotiations with Canadian Hydro Developers which had purchased leases arranged by Roger Short. CHD volunteered $1,000 per megawatt capacity annually as an ex gratia amenities payment when assessments on turbines were capped at $40,000 per MW capacity.

Amaranth, through negotiations and Ontario Municipal Board hearings, succeeded in hiking setbacks for turbines and increasing amenities payments to $4,000 for Phase 2 of the Melancthon wind farm development.

The province subsequently removed the powers of negotiation through enactment of the Green Energy Act and the inclusion of commercial wind farms in the feed-in tariff (FIT) program.

In short, the single substantive change appears to be removal of larger-scale generators from the FIT program.

At Grand Valley, where about 20 MW wind power has been installed, with another 20 MW or so on the way, Mayor John Oosterhof said the consultation process is nothing new, but something that had been previously promised.

East Garafraxa had recently been faced with the threat of a proposed Belwood Lake project expanding into the township. That expanded project has since died, apparently for lack of a suitable transmission line to connect to the Hydro One grid. Mayor Allen Taylor was in agreement with Mayor Oosterhof.

At the north of the county, Dufferin Wind Power (DWP) has a 100 MW project in the approvals stages.

There, DWP is welcoming the changes but Mayor Bill Hill isn’t so certain there are any. He said he is still digesting the announcement but finds it “raises more questions than it answers” and, among other things, appears to give municipalities more consultative powers by contains “no veto power.”

DWP has a 20-year contract under the FIT program, presumably at 11.1 cents a kwh. “We will honour existing contracts. We’re legally bound to proceed,” the minister said in Friday’s tele-conference. But he added that having a contract doesn’t guarantee approval. “The still have to do their due diligence and meet deadlines for approval of site plans and transmission lines.”

As well, the contract might not be as sweet as negotiated. Mr. Chiarelli said the Independent Electricity System Operator (IESO) has been given the authority to order providers to ramp up or down as the energy is required. He said this might mean that wind energy is not required at night or other times. (Previously, wind producers fed their production to the grid, irrespective of demand.)

At DWP, however, spokesperson Rebecca Crump said in an emailed response, “Dufferin Wind applauds Minster Chiarelli’s May 30th announcement related to improvements in the planning and procurement of renewable power generation in the province.

“The continued procurement of microFIT and small FIT generation resources demonstrates the Provincial government’s ongoing commitment to sourcing clean renewable energy for Ontario’s future.

“In addition, the transition to competitive procurement for large scale renewable generation will help to improve the development process and ensure that Ontarians receive competitively priced electricity,” Ms. Crump said.

Amaranth, among other municipalities, has been suggesting a 2,000 metre setback rather than the present 550 metre one prescribed by the province.

Responding by email to a question related to setbacks, a Ministry of Energy spokesperson said:

“The changes we’re making to the procurement process will provide municipalities with a stronger role going forward, but will not provide a veto.

“Competitive procurements for each individual project will ensure that renewable energy developers work directly with municipalities, before contracts are awarded.

“This new approach will engage municipalities from the beginning to identify appropriate locations and siting requirements for future large renewable energy projects.

“This procurement process will be developed by the Ministry of Energy and the Ontario Power Authority, in coordination with Ontario’s ongoing review of our Long-Term Energy Plan.”

Source:  By WES KELLER, For the Citizen | 2013-06-06 | Orangeville Citizen | www.citizen.on.ca

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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