Ontario gas plants and the future of power: is the Ontario Power Authority up to the job?
Gas plant cancelled for political expediency, millions wasted
The Auditor General’s report dated April 2013 on the Eastern Power Mississauga gas plant contained the following remarks:
“Eastern Power was awarded three of the seven contracts, including one for the Greenfield South Power Plant. This was proposed as a 280-MW combined-cycle gas-fired facility to be located in Mississauga and to operate over a 20-year period. Ultimately, it was the only contract Eastern Power executed. For various reasons, including Eastern Power’s challenges in securing financing, the other two projects were terminated. The Greenfield South contract was signed in April 2005.”
It appears the Ontario Power Authority (OPA) in awarding the contracts to Eastern Power didn’t bother to ensure they would be able to obtain financing, but awarded the contract(s) anyway.
Now, in 2013, the OPA will soon be handed the full authority by Energy Minister Bob Chiarelli to ramp up their powers to negotiate and sign competitive contracts, as part of his idea of how to fix the feed-in tariff (FIT) program. Minister Chiarelli directed the OPA via his June 12, 2013 directive to make the following change to the FIT program:
“Replacing the Large FIT program with a new competitive procurement process and working with municipalities and Aboriginal communities to help identify appropriate locations and siting requirements.”
That “gas plant scandal” the Liberals have been dealing with was partially caused by the OPA’s prior actions as the Mississauga plant was to be up and running by 2007; yet the Minister is now proposing to give them moreauthority. Past and present Energy Ministers appear to think the bureaucrats that made mistakes in the past have learned their lesson. Or have they?
Recently The Hill Times (Ottawa) did a complete review of the “energy” scene in Canada and took the time to do an article on the Ontario electricity sector and its push for renewable energy via the Green Energy and Economy Act. The following quote from Ontario’s Energy Minister, Bob Chiarelli appears:
“He also outlined a number of other incentives for municipal participation in the renewable energy sector, including making it easier for cities[my emphasis] to become equity partners in wind energy projects and provisions for increased tax and assessment revenues from turbines. “And that will be retroactive—it includes existing turbines as well,” Mr. Chiarelli added.”
I’m not sure how that last comment will play out as the “assessment” on wind turbines was defined by the previous Finance Minister, Dwight Duncan, who instructed the Municipality Property Assessment Corporation (MPAC) to assess a maximum taxable assessment of $40,000 per megawatt (MW). If the contracts executed by the OPA carry guarantees on the assessed values, we should expect threats of further lawsuits, and unless Chiarelli has got clearance from current Finance Minister Charles Sousa, his premise may be dead in the water. Nevertheless the many processes recently announced by Minister Chiarelli are moving forward, but most anti-wind turbine groups see this whole exercise as a worthless “conversation” (to paraphrase Premier Kathleen Wynne). Those groups are also having trouble understanding what “cities” have to do with the process when it is chiefly rural communities that are affected. I am confident Minister Chiarelli would have difficulty pointing to a major wind turbine development near any “city” in Ontario.
In any event it appears to this writer that the OPA, charged with running this new “competitive procurement process” may be challenged as the Mississauga Greenfield project and another contract they awarded has recently demonstrated.
A recent case has surfaced: a small OPA contract of 6.15 MW awarded to Redbird Energy
, reportedly chaired by Kevin Loughery. The President is listed as Nancy Loughrey and coincidently, an Internet search turns them up (or two people connectedwith the same name) in Atlanta, Georgia. As a further coincidence the FBI in the U.S. has charged a Kevin P. Loughery with “wire fraud” for using investor funds for his personal use.
Is the chair of Redbird, described on the Redbird website as “Kevin has been actively involved in reviewing and assessing renewable energy companies and projects since 2006 and brings 20 years of investment experience as a stock broker for Bear Stearns, a currency trader for Thomas Cook, etc.” and the person charged by the FBI one and the same? If so, it appears the OPA awards contracts to companies possibly controlled by individuals charged with fraud.
I’m sure this latest finding will provide Minister Chiarelli with even more confidence in the OPA’s abilities to negotiate future contracts.
This recent example and the past history of the OPA’s awarding of the Eastern Power/Greenfield contract(s) fails to provide the voters, taxpayers and ratepayers of Ontario with confidence in the process that the previous and the current Ministers of Energy seem to feel is active in the OPA.
We Ontarians have certainly had our share of scandals over the past 10 years; at some point someone must draw a line in the sand—it appears the government won’t!
Now is the time!
August 13, 2013
The opinions expressed in this posting are those of the author and are not necessarily the policy of Wind Concerns Ontario.