The unexpected cancellation of a wind energy project by the new Ontario government will cost ratepayers more than $100 million according to the company spearheading the project.
On Tuesday afternoon, Tory house leader Todd Smith told reporters the government would cancel a wind turbine project in his own riding as one of its first acts of business when the legislature resumes on Thursday.
“We will introduce legislation to cancel the White Pines industrial wind turbine project which received its notice to proceed during the election period,” Smith said.
The company said it was caught flat-footed by the news and only found out about its death from a reporter.
“We are shocked by the news. The White Pines Wind Project has been under development for 10 years and is nearing the completion of construction (today there were over 100 workers on site),” WPD Canada president Ian MacRae said in an email.
The controversial project was opposed by several local groups. For example, the Alliance to Protect Prince Edward County, opposed the project, saying it believed it would be detrimental to the “unique historical, agricultural, cultural and rural character” of the region.
Ontario’s Independent Electricity System Operator (IESO) gave the final approval for the project during the election campaign in May. MacRae characterized the “notice to proceed” as a housekeeping document to confirm that the company had all its ducks in a row but the Tories are characterizing it as a breach of the convention that governments avoid big decisions during elections.
“This project was quietly granted a Notice to Proceed in the middle of an election campaign when government was supposed to be functioning in a caretaker capacity. This breaks with convention in how government operates in an election period,” read an emailed statement from spokesperson Simon Jefferies.
The IESO is not a government-run agency although its board is appointed by cabinet. According to its website it “operates independently of all other participants in the electricity market.” Jefferies said the caretaker convention is still expected to apply to it.
No one from the IESO was available for an immediate comment.
The wind project was approved in 2009 under the highly controversial Green Energy Act’s Feed in Tariff program. MacRae said his company will keep construction going until directed otherwise. He said contractors have been booked, roads have been built, one turbine is already up and the foundations for eight others have already been laid.
“Gas Plant 2.0 immediately comes to mind as the motivation seems to come from the local MPP and is clearly a breach of the contract,” MacRae said, referencing the former Liberal government’s billion dollar cancellation of two gas plants.
“The ratepayer will be on the hook for well in excess of $100 million,” MacRae said.
While providing no details on numbers the government said in the long run cancelling the project will be a positive for ratepayers.
“Cancelling this project will be a net-benefit and result in savings for Ontario ratepayers, after they will no longer be on the hook for this over-priced wind power. The Government will be taking action through legislation to insulate itself from any domestic litigation,” Jefferies said.
The legislation is expected to be tabled within the next week along with another bill to formally end cap-and-trade and another to deal with the strike at York University.
During the election, PC Leader Doug Ford promised to put a moratorium on new energy contracts and “walk away from, or renegotiate, pre-notice to proceed contracts, where feasible.” The party didn’t specify which contracts fell into that category but said the changes would save residential customers $40/year.
With a file from The Canadian Press.
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