Wind Concerns Ontario is a province-wide advocacy organization whose mission is to provide information on the potential impact of industrial-scale wind power generation on the economy, human health, and the natural environment.
“If I didn’t sign, I would see the windmills without revenue”: cash crop farmer Marc Bercier
Not too many years ago, cash cropper and seed grower/processor Marc Bercier was actively opposed to green energy projects being proposed and built in his area, but this February he signed for a potential five windmills* and one substation to be located on his 1,700 acres.
“If I didn’t sign I would see the windmills without revenue,” said Bercier.
$15,000 per turbine, per year
Pointing to the 29 pages of documentation involved for his portion of the 10,000-acre proposed windmill project, Bercier noted how the negotiated sections on soil compaction, erosion and overall environmental protection were vital to him, considering that his farm is only just over the requires 500 meters from this village. [Editor: what? Do you mean from the project?]
The documentation showed that Bercier was promised $15,000 per windmill per year as a base price, with incentives for more power and compensation for anything that affected the surrounding land. The substation lease was $20,000 per year.
It’s a massive community project that seems to have the support of Nation Township Mayor Francois St. Amour. A January 20, 2014 council motion passed, stating it [council] “supports the application under the Ontario Power Authority’s Large Renewable Procurement Program.”
… Ontario Farmer obtained documentation showing that, as of March, 2015, 165 landowners had been approached by the EWG windmill company, of which 128 had signed agreements and 37 were in discussion.
“They are all farmers,” said St. Amour, noting that the required setback distances from the windmills meant that a lot of land was involved per windmill.
As of mid-June, almost everyone of the former holdouts had signed up and joined, said Bercier.
The company had persuaded and signed up a local, prominent farmer who then went up and down the concessions promoting the project to individuals, said Bercier.
OFA “incredibly helpful”
… “yes, there are liens on the project,” said Bercier. However all lien documentation has been passed by his lawyer, alleviating all concerns as to affecting the farming operation, he said.
The OFA has been incredibly helpful in promoting the project, noted Bercier.
Spending $42,000 a year of hydro costs for his farm, “double what it would cost if I was in Quebec,” Bercier is well aware of the extra hydro costs the public pay to finance such green energy projects.
“We had an election, the Liberals won. The voters chose to pay for more electricity,” said Bercier.
Energy Minister Chiarelli tells us he is in control
Listening to CBC Windsor‘s recent radio interview with Energy Minister Bob Chiarelli and reading his recent remarks to the Oakville Chamber of Commerce and Professional Engineers of Ontario, Oakville Chapter, demonstrates the misguided logic and math skills that have made Ontario’s electricity system the mess it’s currently in.
The interview on the CBC was only 10 minutes but the hyperbole was beyond comprehension. In Windsor, Minister Chiarelli was touting “subsidies” for the greenhouse sector. A small part of Chiarelli’s preparedspeech delivered at the University of Windsor was captured on CBC TV and a couple of the greenhouse beneficiaries noted the significance of the subsidies which in one case represents an annual $1 million reduction in their cost of electricity. That will wind up in the “electricity” line on the bills of residential and small business ratepayers. With 1,114 greenhouse nursery and floriculture producers in the province, we “ordinary” ratepayers should hope it’s not $1 million each, or we are looking at a total subsidy of $1.1 billion in annual costs.
The questions raised by the CBC interviewer related mainly to the planned privatization of Hydro One, as did Minister Chiarelli’s Oakville presentation, but the dance moves performed by the Energy Minister at both events and during the interview were over the top!
Here is one part of the report on his speech to the Oakville crowd: “The provincial government decided to embark on an ‘aggressive’ plan to sell assets such as Hydro One, the LCBO, The Beer Store and significant real estate holdings, where possible, in order to ‘mitigate’ increased pressures on power rates as a result of Ontario’s climate change and carbon plans that included eliminating all coal-powered transmission stations, Chiarelli said.” This would suggest Minister Chiarelli was saying the sale proceeds from Hydro One would be dedicated to “mitigate” power rate increases, yetthe report fromearlier in his speech was: “Chiarelli said 100 per cent of the net profits from the sale of Hydro One by legislative law would also be used to improve roads, highways, bridges, transit and other infrastructure.”
It is unclear how using “100 per cent of the net profits from the sale of Hydro One”to build bridges, highways or transit does anything to “mitigate” rate increases in the energy portfolio. Perhaps it’s a reflection of “Chiarelli math”?
Now on the Windsor portion of Chiarelli’s travels and pronouncements the Windsor Star reported:
“While hydro rates will continue to rise, Chiarelli said consumers have seen the last of sharp increases that averaged about six per cent annually over the last eight years. Starting next year, hydro rates for industrial users are expected to rise by 1.7 per cent — about the rate of inflation. Increases in rates for residential users will be ‘slightly higher,’ he added.” “Slightly higher” in Minister Chiarelli’s math means a minimum of 12% as was noted in an earlier article forecasting residential rate growth.
As far as the greenhouse growers are concerned the above noted article had this comment: “Justine Taylor, energy and environment co-ordinator at OGVG (Ontario Greenhouse Vegetable Growers), said hydro expansion is needed to compete with U.S. states, like Ohio, which offer dramatically cheaper electricity rates as well as incentives such as free land and tax holidays.”
It would appear Minister Chiarelli, hearing screams from numerous associations throughout the province, reacts to those who scream the loudest. He offers them concessions by burdening ordinary ratepayers and small commercial enterprises with higher and higher electricity rates to retain the jobs of those who threaten to leave.
It is ironic that U.S. states, like Ohio, NY and Michigan are the beneficiaries of that cheap electricity that Ontario exports hourly at a cost to ratepayers approaching $2 billion annually. This means they in turn can offer “dramatically cheaper electricity rates”.
The foregoing reflects on the results of the Green Energy Act which added a large amount of subsidized wind and solar generation to Ontario’s grid. Due to its intermittent nature they backed it up with expensive gas generation, allowed the spilling of hydro, steaming off of nuclear power, etc. The wasted generation is paid for by residential and small commercial businesses via the Global Adjustment.
The patchwork process the Energy Ministry exudes is the epitome of bad planning.
It is a reflection on the lack of a cost benefit analysis that would have disclosed the burden on Ontario’s economy the GEA created, but the Energy Minister appears willing to continue to dig the hole deeper and deeper.
A 27-turbine wind power project proposed for internationally recognized Amherst Island, an Important Bird Area near Kingston Ontario, may be approved soon by the Ontario government.
The many Species at Risk on Amherst Island include birds (Short-eared Owl, Bobolink, Eastern Meadowlark, Eastern Whip-poo-rwill, Barn Swallow, Golden Eagle, Least Bittern, and Red Knot), Blanding’s Turtles, and Milk and Ribbon Snakes.
Amherst Island has an international reputation as one of the most outstanding places in North America to see concentrations of northern owls and is an important stopover for bats on their migratory path across Lake Ontario. Bats are becoming endangered in many places and in April 2015, Canada, the United States and Mexico signed an agreement to protect the pathways of migratory bats.
A wind turbine installation on this small island, as learned from the nearby Wolfe Island installation, would result in loss of habitat for Short-eared Owl and serious and irreversible harm to local populations of Bobolinks, Barn Swallows and Eastern Meadowlarks, and to breeding population of Red-tailed Hawk, breeding and roosting Purple Martins, and Osprey. Additionally significant breeding population of Blanding’s Turtle, Wilson’s Phalarope and Whip-poor-wills are also at risk. No one is considering the cumulative impact of this project and the many others that are operational or proposed for this important migration route on the vulnerable populations of birds and other wildlife.
More information about the Project and the Island can be found at: www.protectamherstisland.ca
This might the last opportunity to convince the Province to make the right decision and put an end to this project before it enters the expensive and draining cycle of legal challenges. It is time that Ontario’s green energy policy is balanced with its international obligations to protect biodiversity and that decision makers demonstrate genuine respect for the wishes of the overwhelming majority of community members. Please send letters to those listed below, asking that the wind-turbine project for Amherst Island be stopped completely – and permanently:
CC Association to Protect Amherst Island email@example.com
Kingston Field Naturalists and Nature Canada
WCO note: we suggest also sending a note to your local field naturalists’ organization to alert them to this situation, if they are not already aware, and to any nature/wildlife/birding columnists in your local newspaper
Christopher Monkton, 3rd Viscount Monkton of Brenchley; journalist
Another presentation from last week’s ideacity conference. Viscount Christopher Monkton spoke on the cost-benefit analysis of large-scale wind power development (something the Government of Ontario has never done, in spite of recommendations from two Auditors General).
He uses the example of the proposed Navitus wind “farm” in the U.K. which will forever alter the Jurassic coastline, as he points out in detail, for zero benefit to the environment or the economy.
It’s re-run time on TV so if you are looking for some amusement this evening—sorry, it’s only 10 minutes but that might be all you can take—try listening to Energy Minister Bob Chiarelli on CBC Radio’s Windsor Morning show today.
The Minister covers the topic of Hydro One (we are “re-purposing the assets”), the need for reliability in the electricity system (he inherited a system of brownouts and blackouts), and the Green Energy Act which somehow miraculously protects us from power outages due to thunderstorms.
We are re-posting this article which first appeared in Ontario Farmer: there is some confusion as to what the liabilities related to financing for landowners actually are. The “charge of lease” or “demand debenture” is registered on title but it is NOT THE SAME as when a mechanics’ lien is placed on a property for unpaid debts.
Please read the article by Garth Manning QC and Jane Wilson, below. It is important to be clear as the wind power developers will capitalize on any inaccuracies put forward by community groups.
Farm owners’ property as security for wind farm financing: what owners need to know
Ontario Farmer, May 5, 2015
by Garth Manning and Jane Wilson
It came as a surprise to many in Ontario when it was revealed that the multi-national power developers behind the K2 wind power generation project near Goderich had secured $1 B in financing, and that this arrangement is now registered on title for the 100 farm properties involved as lessors.
The arrangement is between K2 Wind Ontario Inc. and Mizuho Bank Ltd. Canada Branch. It secures a revolving credit facility of up to $1 billion at 25% on a number of items, including the contracts between landowners and K2 for land and road agreements with municipalities.
Another, smaller example has also come to light: a wind power project south of Ottawa in Eastern Ontario, where the five landowners leasing land for a 30-megawatt, 10-turbine project now have charges on their properties for $70 million.
Immediately, questions arise as to what would happen if the power developers were to default on their loans: would the lender then own the farm properties? How would that affect road use agreements with municipalities?
The fact is, this is a common practice. Property owners can refer to the leases imposed by the developers to review this potential situation, and many others that may affect operation and ownership of their land while leasing land for the power projects.
In an Invenergy standard contract, for example, is this clause: “In connection with the Lessee’s financing of the Project, the Lessee….is hereby given the right by the Lessor…to mortgage its interests in the Lease…and to assign this Lease, or any part of parts thereof, and any subleases as collateral security…”
The proper term for this is a “Charge of Lease” but may also be referred to as a “Demand Debenture.” What it means is, the present value of the wind power contract (i.e., the Feed In Tariff or FIT contract with the Ontario government) is greater than the present value of the lease amount. The difference between those two amounts is security for the loan to the power developer. It is a charge against all contracts favourable to the wind power developer, which may also include road use agreements.
It is like a line of credit for the developer and typically, advances against the amount are tied to certain milestones such as stages of construction.
The critical factor, however, is what it means for the lessors, in other words the farm owners who have leased their land for wind turbines, access roads, substations, transmission lines, etc. The importance lies not so much that the farmer lessors might on default lose their land (the farm land itself is not mortgaged, just the turbine contract on that land) but the damage it does to that property owner if he/she wants to sell, or to renew an existing mortgage, or place a new one, or in any way borrow money for which the lender would want security on his/her land.
Let’s assume a farm owner wants financing for farm operations or improvements. That might now pose difficulty: lenders do not like to be second in line, as they would be where a charge of lease is in place.
If the farm owner wishes to sell, similar difficulties arise: the lawyer for a purchaser in the case of an agreement to purchase will do a title search and discover the Charge of Lease on title, then immediately advise his or her client that the client is entitled to get out of the deal unless the registration of the Charge is removed from title. A purchaser is not expected to assume any risk of this nature.
In the case of renewing an existing mortgage or placing a new one, the lawyer for the bank or other lending institution would take the same position — no renewal or new mortgage unless the customer sees that the Charge disappears from title.
This is one of several important characteristics of signing a lease to have wind turbines, and needs to be thoroughly considered. Other legal issues to be carefully considered may include potential liability for the substantial cost of “decommissioning” turbines at the end of the lease, difficulty obtaining insurance on property with wind turbines, loss of autonomy over building on the property and carrying out regular farming practices, and, last, the potential for nuisance suits from neighbours affected by noise or property value loss.
Property owners should consult with a lawyer before signing any agreement.
Garth Manning is a retired lawyer and former president of the Ontario Bar Association, who lives in Prince Edward County. Jane Wilson is president of Wind Concerns Ontario.
Suncor Energy says it already has enough land leases signed to host a 75-megawatt wind energy centre in Brooke-Alvinston.
Suncor is the third company to come to the municipality looking for support for a project as they look for a lucrative government energy contract.
While it didn’t get into a lot of specifics Suncor officials say the project – based mostly in Warwick Township, would stretch down into Brooke-Alvinston as far as Petrolia Line. The project would likely have about 35 turbines.
And despite vigorous opposition from some landowners “we have enough landowners for a 75-megawatt project,” says Project Manager Marnie Dawson.
What Suncor officials did want to talk about was the Community Support Document – what the company is willing to offer the municipality because the turbines dot the landscape.
Dawson says the municipality would get $5,000 per turbine in Brooke-Alvinston’s boundaries, $5,000 per year for any substations, a $10,000 per acre used payment for transmission lines on the road allowance, $200 per year for each pole on the road’s right of way and as well as payments for underground collector cables.
Us being here [sic] has an effect on the community
“We realize that by us being here there is an effect on the community,” says Dawson. “We want to be in the community we want to help the community…this is our way of support the community.”
And while the company says it is in the early stage of discussions of the agreement and says they want to take a collaborative approach, when asked by Councillor Ken Alderman if there was room to negotiate, Dawson said that was the numbers Suncor “is kind of set on.”
Under the Community Support Plan, people who lived near wind turbines but who didn’t have a lease agreement would also get some cash from Suncor as well.
And Suncor told councillors – that while the council had the final say – it wanted to be able to have a say on where that money is being spent.
“You are offering us $5,000 per turbine and you’re going to tell us how to spend it?” asked Councillor Frank Nemcek. “You’re going to tell us how to spend the money you’re bribing us with?”
Suncor spokesperson Jocelyn Kelln says the money is not a bribe but a recognition of the impact the projects have on a community. “It directly addresses the physical impact to the community,” says Kelln. “We’re not paying to get your permission – that is not the intent; that is not the idea. We do recognize we have an impact, the precedent is there. The government has asked for an agreement and some people are not happy with the idea of a project; this is to offset that.”
Kelln and Dawson also asked Brooke-Alvinston councillors to consider signing some agreements the company needs to advance the project; a letter saying Suncor had met with them – which does not improve the company’s chances of getting project and two others which could.
“Ideally, we’d like those signed by July,” says Dawson, adding Suncor has to submit its project plan to the Independent Electricity System Operator by September.
Don’t sign anything: community members
If municipalities sign letters of support for the project and begin Community Support negotiations the company has a better chance of landing an energy contract.
And for that reason, community activist Steve and Karen Sanders – who have been working to keep farmers from signing wind leases – urged the municipality to step back. “Do not sign anything,” says Steve Sanders “not even that you had this meeting.”
Senator for Victoria John Madigan delivered a powerful speech last week on the punishing effect of Australia’s green energy policies on that country’s electricity ratepayers, on the economy generally, and how the policy benefits the wind industry while not achieving environmental goals.
Senator MADIGAN (Victoria) (12:16): Today I am going to lift the lid on the economics of the RET scheme, while speaking on the Renewable Energy (Electricity) Amendment Bill 2015. I am going to give you the inside story on the money trail of the wind industry. This is the story that neither side in this place, nor the Greens with their wind industry fundamentalism, want you to hear.
The subsidy for renewable electricity, legislated in the REE Act 2000, is paid for by electricity consumers in their power bill. There is government modelling that discusses the effect of renewable energy on the wholesale price of electricity. The industry claims that the RET scheme reduces the wholesale price of electricity, which it does as it creates an oversupply of the market. The modelling is based on this effect. This effect is irrelevant, as the subsidy is paid by the consumer in the retail price of electricity. This price is agreed by the generator and the retailer in their power purchase agreement, PPA.
The industry claims that PPAs are commercial-in-confidence and so the myth of renewable energy lowering electricity prices is allowed to continue. In reality, the PPAs are setting the retail price of electricity generated by wind turbines at three times the price of fossil-fuel generators. In one example of a PPA, the electricity retailer was buying wind energy at $32 above the wholesale market price, resulting in a payment of $40 million per year more than it would otherwise have to pay for electricity. This amount is added onto consumers’ bills, with a further retailer’s margin typically between seven and 10 per cent. This increase in the retail price of electricity could be as high as 200 to 300 per cent. According to then Senator Boswell, during a Senate estimate hearing of 27 May 2010, Grant King, of Origin Energy, a very big player in this sector, said:
Aspects of RECs, such as the need to build thousands of megawatts of gas power to back up wind at a cost of billions, and expenditure on connecting wind farms to the grid will be a major factor in power price increases over the next decade.
He then said:
It could be two to three hundred per cent.
When you study the states of Australia that have had dramatic increases in their household power bills in recent years you will find a direct correlation to the number of wind turbines that have been connected to the grid in those states. You will find the same correlation in European countries.
No-one in this great house will talk about the economic effect of this amending legislation. I am one of the few senators who are in a position to do so. The coalition government find themselves in a conundrum. They have buckled under pressure from the wind industry to negotiate a deal with the ALP on the reduction of the target. Some say that this reduction will see up to 2½ thousand new wind turbines, built across prime agricultural land in Victoria, NSW, Queensland and South Australia. That is more than twice the number of turbines that we already have operating. This amending legislation is designed to give the financial sector some investment certainty, which the industry has been so desperate to provide. But at what risk? The financial risk is very significant. While some debt financiers will be sensible enough to recognise the regulatory risk involved in going forward with technology, the safety of which has been questioned in a pilot study commissioned by Pacific Hydro, I fear our Clean Energy Finance Corporation will not be one of them. The CEFC was designed by the Labor government to increase investment in renewable technologies, to the tune of $10 billion.
The coalition government therefore finds itself in an unsustainable position where it is supporting the continuation of an outdated scheme that will inevitably collapse. In 2000 the Howard government, unquestioningly, introduced the REE Act, which was concocted by some of the greatest financial magicians in our history. This financial rort was then supported throughout the Gillard government years and was strengthened by the establishment of the CEFC, ARENA and billion-dollar-deals with Chinese wind turbine manufacturers.
The amendment will now follow one of two paths: option 1 is that it will not be supported by my Senate colleagues, in which case the target will stay at 41,000 gigawatt hours, which will activate the $65 shortfall penalty charge in 2017. This, coupled with the REC price, will leave consumers with an effective $93 carbon tax, paid for by consumers in their household electricity bills.
The electorate of Australia have already voted down a $28 carbon tax, so the threat is clear: the coalition government may lose the next election based on this amendment under the directive of the Minister for the Environment. Or option 2: the amendment will be supported by the majority of senators and will pass, thereby setting a new target of 33,000 gigawatt hours—a level which will see the construction of up to 2½ thousand new wind turbines, which will create such havoc in our electorates and rural environments that there will be widespread community outrage.
To satisfy a new 33,000 gigawatt-hour target, 495 million RECs will have to be surrendered by electricity retailers. This will lead to a shortfall of 240 million RECs, as only16,000 gigawatt-hours will be available annually, and only 256 million RECs will be available to satisfy the LRET’s remaining 495 million megawatt-hour target, set under this politically deceitful amendment. When the shortfall charge is triggered and the REC price goes up to $93, the total cost is added to power consumers’ bills and will top $46 billion. A wind turbine operates, on average, only 27 per cent of the time—when the wind blows. There are 8,760 hours in a calendar year. Therefore, at 27 per cent, a three-megawatt turbine will generate $659,985 in subsidies per year. If you use the industries claimed 35 per cent capacity factor, each turbine will generate $855,414 each year. That subsidy is paid annually until 2031. Each three-megawatt turbine can generate a total of $13.5 million over the remaining life of the LRET scheme.
The RET subsidy, including small-scale solar, has already added $9 billion to Australian power bills. At the end of the day, retailers will have to recover the total cost of the RECs issued, and the shortfall charge, from Australian power consumers. No matter if this amendment is supported or not, each and every Australian household will pay a $93 carbon-tax-equivalent in their power bills, increasing bills by up to possibly 300 per cent. It is, without question, obvious that the imposition of what is a $45 billion retail electricity subsidy is going to have an adverse economic consequence for industry, small business and households alike. In my home state 34,000 homes were disconnected from the electricity grid because they could no longer afford to pay their power bills. The imposition of the coalition’s electricity tax will naturally lead to tens of thousands more families attempting to live without power.
The situation is mirrored in other states. Electricity has gone from being a basic necessity to a luxury good for many hard-pressed Australian families. While certain members of the coalition government claim that the RET scheme is family and business friendly, perpetuating the wind industry line that it carries with it no significant cost to power consumers, the efforts to exempt energy-intensive trade-exposed industries reveals that argument to be a lie. This is deceitful. If there is no cost to power consumers from the RET scheme, then why the need to exempt energy-intensive industries such as aluminium smelters? It is simply policy hypocrisy. At some point this parliament will act to properly control the operation of wind farms by placing conditions on access to subsidies. The potential for that kind of regulation is a detrimental point of risk for bankers and investors.
“Doesn’t matter if it’s in Japan, or Germany, or anywhere in the world,” said Carmen Krogh at the ideacity conference in Toronto yesterday, the symptoms of exposure to the audible noise and infrasound/low-frequency noise emitted by utility-scale wind turbines are the same around the world.
“Brave people stepped forward in 2009,” Krogh said, recalling how she got involved in her journey of investigating the health effects from wind turbines.
The wind energy “road map” in Canada is very interesting: wind power development is essentially industry-led, to the detriment of Canadian citizens.
Krogh also discusses the appeal process in Ontario, and the tough “burden of proof” set up by the industry-led government regulations.
Ontario Premier Kathleen Wynne was greeted by “the Wynne head” and shouts of “shame” when she arrived Thursday at the Guildwood Inn to speak at a Sarnia-Lambton Chamber of Commerce luncheon.
Several dozen protesters from the Ontario Public Service Employees Union (OPSEU) and a similar number of anti-wind turbine protesters carried signs outside the hotel under the watch of OPP officers.
One of the protesters suited up to wear an oversized effigy of the premier.
OPSEU members were protesting the lack of progress on a new contract with the government, and the anti-turbine protesters expressed their opposition to wind energy projects.
“Kathleen Wynne has shown she has a tin ear when it comes to listening to the concerns of rural residents,” said Santo Giorno, a member of the group We’re Against Industrial Turbines, Plympton-Wyoming.
“What she’s doing is wrong, it’s deceitful, it’s dishonest and it’s hurting rural Ontario.”
Suncor and NextEra are currently building a 46-turbine wind project in Plympton-Wyoming, Lambton Shores and Warwick Township.
“This premier needs to get back to the bargaining table,” said Len Elliott, an executive board member with OPSEU.
“It has been 160-plus days now without a collective agreement.”
Elliott said the union believes the premier is stalling the negotiations until after Toronto hosts the Pan Am Games later this summer.
“We want her to get back to real, fair, non-concessional bargaining on the issues.”
Dave Esser, president of OPSEU Local 128 at the Sarnia Jail, said there was a “decent presence” at the rally.
“We just want her to know that business-as-usual isn’t what we’re interested in,” he said.
“Don’t walk away from the table.”
Plympton-Wyoming resident Ed Vanderaa, a wind turbine opponent, said, “She has to listen. She’s ignoring but she’s hearing it, and if we continue the storyline . . . she’ll finally get the message.”
Wind protester Mary-Lynn Cooper said she wanted the premier to know she’s unhappy with decisions the provincial government is making.
“She’s giving the world away to the corporations and industry,” Cooper said.
Katie Horvath, co-founder of a social justice student advocate group at Lambton College, said her message to the premier was, “Start paying attention.”
WCO member and WAIT-PW leader Elizabeth Bellavance preparing a message for the Premier