Alliance to protect prince edward county gas stoichiometry problems

Energy Sector Analyst Parker Gallant explains how the IESO could easily save rate-payers some significant future rate increases without impacting energy security, with a particular look at one recent project – wpd Canada Inc’s White Pines Wind Project in Prince Edward County – that completely defies all logic when it comes to one of their mission statements.

So, the province has a surplus of power, and the costs of wind and solar have become more competitive. Why would the IESO then not seize upon the opportunity to deal with a high-cost industrial-scale wind power project, when they had the ability to cancel it due to non-compliance with the original contract? At the very least shouldn’t they have renegotiated the contract to reduce the impact on ratepayers?

The White Pines story is a curious exercise in contract law, to be sure. A successful appeal* to the Environmental Review Tribunal by the community group the Alliance to Protect Prince Edward County** resulted in the project being reduced from 59.45 MW to 18.45 MW last fall. IESO could have simply canceled it because it was clearly unable to meet a condition requiring delivery of 75% of the capacity agreed to in the contract. At the very least, IESO could have renegotiated the terms of the contract to fulfill the Energy Minister’s claim that “renewables are increasingly competitive”.

Mr. Justice Stanley Kershman presided over the hearing of final submissions at the Belleville Courthouse. The turn-out was excellent with Mayor Quaiff, Councillor Ferguson, Wind Concerns Ontario President Jane Wilson and about 75 County residents attending. In fact, the Court Clerk was forced to find a larger courtroom to accommodate the crowd.

Eric Gillespie began by pointing out that this case raises broader public policy issues of access of information from the IESO. On June 12, 2017 APPEC contacted the IESO for information about the status of WPD’s FIT contract. The IESO indicated in its reply that it could not disclose this information, citing confidentiality. Mr. Gillespie argued that this information should have been disclosed for the following reasons: (1) the IESO describes the FIT program as a standardized, open and fair process; (2) APPEC and Ontario communities are affected by the FIT Program; and (3) the information APPEC was seeking, and the IESO withheld, could not have been confidential at all as it was ultimately disclosed to the Court in November 2017.

Mr. Gillespie clarified that contrary to what the IESO contends, this is not about how to interpret clauses in the FIT contract. The clauses are negligent misrepresentation, in that APPEC was led to believe that the generation capacity of the White Pines project could not go below 75% of the generation contracted for in 2010, when the FIT contract was signed. The central issue for APPEC is that information that became known to the IESO was not made publicly available. The IESO had a choice, when it became clear that WPD could not meet the 75% condition in the contract. It could have said that things had changed, that WPD’s FIT contract would need to be amended, that WPD was in default of contractual milestone dates, etc. Mr. Gillespie noted that it’s what the IESO and WPD did with their choices that has brought us here today. WPD’s first public announcement that it was proceeding with the 9-turbine project was September 21, 2017. The IESO informed Councillor Ferguson that it had agreed to amend the FIT contract on October 12, 2017. APPEC only obtained the information it had sought in June when the IESO disclosed it to the Court on November 30.

Alan Mark, IESO’s legal counsel, criticized APPEC’s “assumption” that it has some right to insert itself into the contractual relationship between the IESO and WPD. Mr. Mark stated that any rights are owed exclusively to WPD, the IESO’s contractual partner; there’s nothing in the statutory framework that gives APPEC “the right to anything”. Mr. Mark went on to suggest that a contract is just a statement at a point in time with no guarantee that it won’t change in the future and members of the public don’t need to know about that either. Mr. Mark added that “with all respect to APPEC, APPEC is just made up of members of the public that feel strongly about wind power projects.”

Mr. Mark indicated that the IESO has made no representations to APPEC at any time, so it could not have made a negligent representation. When Judge Kershman asked whether APPEC’s allegation is that the IESO made a representation in 2010 that the Project would not be able to proceed if the project’s generation capacity fell below 75%, Mr. Mark responded that this isn’t the case APPEC is making.

Mr. Mark noted a statement in the Skypower Decision that the FIT contract is a bilateral commercial contract between two parties. Mr. Gillespie noted that in the same Skypower Decision, Judge Nordheimer rejects this characterization of the FIT program, and says that the suggestion that this is a commercial nature entirely and not a matter of public policy is fictional.

Mr. Mark said that APPEC had all the information it needed and ignored this information at its peril. In reply, Mr. Gillespie asked why APPEC would base its ERT appeal rights on a complete unknown, i.e., would the IESO amend the FIT contract, or not?

Patrick Duffy, legal counsel for WPD, also took up the argument that APPEC had no right to insert itself into the contract between the IESO and WPD. Mr. Gillespie replied that if that was so, then why did the IESO make FIT contracts available on its website for public viewing in the first place? Mr. Duffy stated that the terms “open” and “transparent” only apply to FIT Program Applicants, not to members of the public to which Mr. Gillespie replied that we still have not been told what there was about the information APPEC sought that was privileged. Mr. Duffy noted that FIPPA (Freedom of Information and Privacy Act) is the law that applies to disclosure. However, Judge Kershnan reminded Mr. Duffy that Mr. Gillespie had already noted in his submissions how long the FIPPA process takes. Mr. Gillespie also noted that there was nothing in any of the other Party’s materials about FIPPA.