Taxpayer cost of stalled wind project could go way up, opposition warns 

The tab for a stalled $5.2-billion offshore wind turbine project on Lake Ontario near Kingston could dwarf the $1.1-billion debacle over cancelled gas plants, opposition parties claim.

Progressive Conservative Leader Patrick Brown peppered the government with questions Monday on whether last week’s $25 million damage award to Windstream Energy is just the start.

“How will the government pay for this $5.2-billion contract? Are ratepayers and taxpayers on the hook for a scandal that could be five times the size of the gas plants scandal?” Brown asked in the legislature’s daily question period.

He accused the government of halting the project because “a Liberal riding was about to revolt.”

Premier Kathleen Wynne and Energy Minister Glenn Thibeault would not say if Windstream, whose 300 megawatt project off Wolfe Island near Kingston was put on hold in 2011, could sue.

“One step at a time,” Thibeault later told reporters, noting the government is studying the damages award ordered by a North American Free Trade Agreement (NAFTA) tribunal last week.

Windstream’s contract remains in force, the tribunal found, even though Ontario is maintaining a moratorium on offshore wind power put in place in February 2011, six months after the Windstream deal was inked.

The province is working with the federal government, whose trade department lawyers handled the NAFTA case, in considering “next steps.”

The two levels of government have a 20-day period to redact confidential or market-sensitive information from the tribunal decision before it is released publicly and 90 days to make a court application to have the damage award set aside, federal officials said.

Neither the Ontario nor the federal governments will say which of them – or both – would pay the $25 million to Windstream, plus almost $3 million in legal fees.

Windstream officials could not be reached for comment Monday on what actions the U.S.-based company is planning to take.

“Obviously there’s potential for us to be sued for a lot more money,” said New Democrat MPP Peter Tabuns (Toronto-Danforth), his party’s energy critic.

“I wouldn’t be surprised if there’s a lot more to come to the surface.”

Wynne said the $25-million NAFTA award is “significantly less” than the $568 million Windstream was seeking in damages and that the environment ministry is “finalizing research” on the impacts of offshore wind turbines.

Concerns include issues around the way sound travels over water, and the eventual decommissioning of turbines once their service life is over.

Tabuns questioned why it has taken almost six years to compile enough research to make a decision on the safety of offshore wind.

“They’re stalling,” he said.

The NDP has no problems with offshore wind power, but says land-based wind projects are cheaper to build and operate, Tabuns said.

Auditor General Bonnie Lysyk found that the cancellation of natural gas-fired power plants in Mississauga and Oakville, where they faced community opposition before the fall 2011 election, and moving the plants to Napanee and Sarnia, could cost $1.1 billion over 20 years.

Last month, the Ontario government cancelled plans to sign contracts for another $3.8 billion in planned renewable energy projects, citing a surplus of electricity at a time when consumers are feeling the pinch of high hydro costs.

Wynne has promised to rebate the 8 per cent provincial tax on hydro bills starting in January, easing pressure on ratepayers.