Canadian Manufacturing

Ontario to pay $180 million to relocate natural gas plant

Facility to move near Sarnia; unclear whether taxpayers or ratepayers will foot the bill.



TORONTO— Ontario will have to pay $180 million to relocate a Mississauga gas plant that was cancelled just days before last year’s election, but the governing Liberals couldn’t say whether taxpayers or ratepayers will end up footing the bill.

Energy Minister Chris Bentley said it’s not yet clear whether the cost of relocating the 300-megawatt plant more than 260 kilometres away near Sarnia will show up on hydro bills.

“The agreement was concluded yesterday between the Ontario Power Authority and Greenfield South Power,” Bentley said Tuesday. “I expect there will be discussion in the future about the allocation of those costs.”

The Liberals cancelled the plant last year, after scrapping another one proposed for nearby Oakville the year before in the face of fierce opposition from local residents.

The opposition parties accused the government of killing the plants to save Liberal seats, including Citizenship Minister Charles Sousa’s and Oakville MPP Kevin Flynn’s.

It’s clear that the people of Ontario will take the hit for saving those seats west of Toronto, they said.
“It’s either going to be on your tax bill or your hydro bill,” said NDP energy critic Peter Tabuns.

“In either event, it’s a scandal. It’s completely outrageous. The minister should have been ashamed of himself, the premier should be ashamed, and the people of Ontario should be incredibly angry.”

Liberal campaign staffers are now writing Ontario’s energy policy, said Vic Fedeli, the Progressive Conservative’s energy critic.

“That’s exactly what happened,” he said. “A week before the election, in order to save a seat, they offered up the Mississauga power plant. And today we find out that it’s $180 million that that staffer cost us.”

But Bentley insisted that the government only had a change of heart after listening to the “very strong objections” of local residents.

“As soon as we made the announcement about our intention to relocate the gas plant, it was followed very shortly thereafter by statements and commitments by both of the other parties that they would not have a gas plant on that site,” he said.

The $180-million figure includes an $88 million settlement with EIG, the financiers of the plant who were suing the province for $300 million. It also includes $85 million in goods and services that can’t be reused at the new location at OPG’s Lambton generating station, such as engineering work, construction materials and labour.

Work on the Mississauga plant continued for weeks after the Oct. 6 election, even though the government made it clear the project would have to be located elsewhere.

The government said the price tag could have been much higher if they hadn’t managed to recover $75.5 million in equipment and $10 million in engineering and design work for use at the new facility.

The move is a good fit because the plant will go to an energy hub and take advantage of existing transmission lines and gas lines, Bentley said. It will also help the station move from coal-fired generation to natural gas.

Construction of the plant is also expected to create up to 200 jobs over the next two years, he added. It should be up and running by 2017.

The province will be able to meet the energy needs of growing communities like Mississauga and Oakville, even though they won’t have plants nearby, Bentley said.

“We will have enough electricity … the grid is interconnected,” he said.

The Mississauga site still belongs to Greenfield, but the agreement prohibits them from building another gas plant, Bentley said.

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