Multi-million-dollar power contracts IESO style

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.

The following is an excerpt from Parker Gallant’s article. Or click here to read the whole article.

Or, how the IESO could have saved Ontario ratepayers more than $400 million by cancelling one wind power project, but didn’t.   …

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?

They did neither.

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”.

But the IESO amended the contract for the reduced project, and granted waivers to the original conditions of performance, it was learned in a Belleville courtroom recently.

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