Charles Wyatt
Business Edge
October 27, 2005

Ontario’s aging electrical power system, already precariously short of generation capacity, faces another problem – local residents who don’t want power plants or transmission lines in their neighbourhoods.

In Toronto, Mississauga, Newmarket and Collingwood, local residents backed by groups such as Stop Transmission Lines Over People (STOP) have caused municipalities to rethink support for new electrical facilities and developers to cancel projects.

Last month, Greenfield North Power Project, a 280-megawatt natural gas plant planned for north Mississauga, was cancelled by Eastern Power Ltd. A second 280-MW gas-fired plant, Greenfield South Power Project proposed by Eastern Power, is expected to face similar opposition.

St. Clair Power, the developer of a proposed 570-MW natural gas project in the Sarnia-Lambton area in southwestern Ontario, is reviewing its site location arrangements.

Markham-based STOP opposes the construction of electricity towers and transmission lines close to houses, schools and businesses on the basis of safeguarding the physical and economic health of communities.

Business organizations and private power generation developers worry that extended public opposition may slow development of electrical facilities and damage the province’s already slowing economy.

"There can’t be a situation with approvals and delays reaching a point where opponents actually succeed in killing projects," says Judith Andrew, Ontario vice-president for the Canadian Federation of Independent Business.

"The situation is desperate. We’ve haven’t any more time for dithering. Ontarians don’t understand how close to the wire we’re operating in terms of availability of supply. The government has to seize the agenda," she says.

"Someone has to say to Ontarians if we don’t build these projects, you’re not going to be able to run your air conditioning and do the other various things with your electrical amenities," Andrews says.

Rob McLeese, president of Access Capital Corp., a company that offers guidance to buyers and sellers of electricity power projects, says electricity generation developers will be hesitant to make proposals in Ontario in such an environment. He adds they will not invest tens of thousands of dollars in developing proposals when in the end the public says, "we didn’t want the power anyway."

"We can’t continue the pace of growth and not replace it with something that is reasonable," says McLeese, who also is chairman of the Electricity Task Force of the Toronto Board of Trade.

About 25,000 MW of Ontario’s power generation must be rebuilt in the next 15 years. This represents about 80 per cent of Ontario’s current generating capacity and would cost an estimated $25-40 billion, according to the Ontario Ministry of Energy.

Currently, the province has about 30,000 MW of total capacity. But only about 22,000 MW are available. The provincial government wants to phase out 6,500 MW of coal-fired generation for health reasons.

Earlier this month, Bruce Power said it will refurbish two idle nuclear reactors on the shores of Lake Huron near Kincardine. The project will take four years to complete and cost $4.25 billion, with the first plant coming back online in 2009.

The plants have been out of commission for about a decade and the refurbishment would allow them to run until 2035. Bruce Power is the province’s largest independent electricity producer.

The projects currently facing local opposition were among the first projects approved by the provincial government in the fall of 2004 to replace more than 7,500 MW of coal-fired generation by 2007.

Opposition from local residents to the generation plants and transmission lines does not surprise Paul Bradley, vice-president of generation development for the Ontario Power Authority.

"People are not used to having to cope with local power issues. They’ve been isolated," he says. "(But) what is surprising, is the speed with which they can organize and have their say in the process."

The OPA, established in 2004 by the provincial government, is responsible for developing Ontario’s power system and administering the contracts for the projects.

The need for new generation and transmission facilities is most acute in downtown Toronto and the western portion of the GTA, according to the Independent Electricity System Operator, (IESO). IESO is responsible for the day-to-day operation of the province’s electrical system.

"New generation and transmission facilities supplying the downtown Toronto area are urgently needed over the next few years," the agency says in its 2006-2015 outlook, noting that the western GTA faces similar generation shortfalls.

Without more generation, emergency rotating power outages will be required to prevent the overloading of transmission facilities, IESO says.

OPA’s Bradley is not panicking. "Right now, nothing is off schedule," he says.

"(But) there must be a shovel in the ground within a year in Toronto and the GTA west to prevent serious shortage problems," Bradley says. The projects have lead times of two to three years.

Bradley estimates an additional 2,100 MW of new generation capacity needs to be built in Toronto and the western GTA within three years.

Toronto and GTA West would be the first areas to have power outages if they do not install sufficient generation capacity, he says. Other parts of the province such as the Simcoe Region and Kitchener-Waterloo area will face similar power shortages in the next five years if additional generating capacity is not built, Bradley adds.

McLeese says he supports the concept of fair share to ensure communities consider the consequences of rejecting proposals to build electrical facilities. If communities do not want power facilities, they should agree to reduce their power usage. "That will make people wake up."

McLeese says Ontario’s public review process would advance more quickly if it followed the U.S. regulatory process. When a project meets the regulatory thresholds, the permit is granted.

Opposition to electrical generation has even caused concern for a proposed wind-turbine farm in Collingwood, he says.

"If there are no consequences then it’s easy to say no."

The provincial government also faces continued pressure to reconsider its decision to close the province’s coal-fired electricity generation plants.

"They shouldn’t be closing down coal plants when we’re already short of electrical power," McLeese says.

"The technology has existed to make these plants cleaner. Don’t shut them down, it’s like throwing out the baby with the bathwater," he says.

Earlier this month, Energy Probe Research Foundation released a report showing the Lambton generation plants are two of the cleanest coal-burning units in North America and that they produce less harmful emissions than some natural gas plants.

"The province is closing some of the cleanest electricity generating plants in North America," says Energy Probe executive director Tom Adams, who adds that the Ministry of Energy’s "environmental analysis is flawed."

The government study lumped the cleaner and dirtier coal plants together to make a case to replace the coal-fired generation, he says. "The health hazards from coal-fired power are largely controllable."

The Energy Probe report says the plants can be made cleaner by installing emission controls.

Adams warns the price difference between coal generation and natural gas continues to widen. Based on Energy Probe’s analysis, coal-fired generation at the Lambton coal facility costs between three to four cents per kilowatt-hour compared to 12 cents under current natural gas prices.

Bruce Power will earn 6.3 cents per kilowatt-hour for the power produced by the refurbished nuclear units. Bruce Power is paying for the cost of the refurbishment.

The Power Workers’ Union also recently repeated its request to the provincial government to reconsider its decision to close the province’s coal plants. Three of the four remaining plants are to close by the end of 2007, with the last, in Nanticoke, to close in early 2009.

"This government must consider clean coal as a vital source of electricity," the union said in a news release. It also said the province could save more than $11 billion over the next 20 years if it upgrades existing coal-fired plants to clean coal instead of replacing them with natural gas.

"We’re going to end up with a clean and reliable supply, which is part of our vision," Energy Minister Donna Cansfield said at the time of the Bruce Power announcement. "We always said we were going to build, we were going to maximize our existing resources."

With files from The Canadian Press