Among the myriad economic perversions created by Ontario’s Green Energy Act one of the more intriguing, and possibly treacherous, is the creation of a financial marketplace for municipal favours. The McGuinty government was noisily criticized when it laid low government regulations and environmental protections that enable intermittent electricity generators to move their wind and solar developments through the queue quicker and easier under the Green Energy Act.
Among its loudest critics were municipalities that had been cut out of the decisionmaking process. Neutered, municipal leaders could only grumble as the trucks laden with intermittent energy components manufactured offshore, rumbled into their communities, across their roads and bridges to be erected anywhere the developer pleased. Even endangered species are being forced relocate, or die, to make way for the industrialization of Ontario rural landscape in the name of “green” energy.
Yet it was the municipalities that caught the attention of the Ontario government in the last election—one in which the Liberals narrowly held onto power. Dalton McGuinty’s energy bureaucrats responded in March with a new points system in which FIT (Feed-in Tariff) applications will be prioritized based upon community support rather than first-come first-served. Specifically a developer earns two points, propelling them up the queue, if they can win approval for their project from the local council.
While Dalton McGuinty likely imagined the point system might ensure intermittent electricity plants were built in municipalities that share his ambition, developers quickly deduced that municipalities would happily trade those points for cash.
It wasn’t as though municipalities were being invited to the table; the province has been clear it will continue to override community wishes when, and if, it sees fit. Dalton McGuinty was merely throwing municipalities a bone to keep them occupied—at least out of the next election campaign.
The good news for this council is that the floor price for its support has been set. It need not embark on expensive consultation and external studies to determine the minimum value for falling in line with the developer and the province.
It can thank Skypower for that. The failed wind developer, now a solar developer, has offered this municipality (and others) $7,000 for every megawatt of power it installs, every year for a minimum of 20 years. Skypower’s new found “commitment to giving back” extends only to future applications however. It seems this “commitment” is only as deep as the advantage it can extract from the community.
At least this council knows what the points are worth.
Last week a landowner in Bloomfield stood before council seeking the two points they had to offer. He wants to build a 500 kW (approximately 6 acres) solar plant behind the former canning factory in the village. There was no mention of what he was willing to pay for the points.
According to the Skypower model, the Bloomfield landowner should be offering a minimum of $3,500 per year for at least 20 years (500 kW equals half a megawatt). Given that 500 kW projects earn the highest rate of all groundmounted solar projects under the new rules, the Bloomfield landowner’s margins should easily accommodate this fee.
Yet council is likely to be tempted to pick and reward favourites—friends, families, and neighbours. Council has dabbled in preferential treatment in its commercial dealings in the past but solar and wind developers aren’t likely to stand idly by as council picks winners and losers. These folks play for keeps.
Council must develop one policy regarding the awarding of these points—a single policy that will apply to each and every applicant who comes to Shire Hall looking for its favour. Council cannot take Skypower’s money and not the Bloomfield landowner’s. To do so would be awarding commercial advantage to one company over another. The loser in this scenario will mostly certainly sue the municipality to level the playing field. Council will find itself bound up in litigation it can’t afford and likely can’t win.
Planning chief Gerry Murphy says he expects at least 40 new applications for similar projects to come before council seeking the points only council can deliver once the rules are finalized.
It may seem unfair to some on council that they finally win some say over intermittent electricity projects in their community but are unable to reward local businesses or direct the advantage to their preferred proponents.
It may take some time, and perhaps a few legal settlements, for council to realize Dalton McGuinty wasn’t giving the municipalities more control—he was merely buying their silence.