Soft ground

Council has certainly found itself in a fine pickle this time. Though not entirely of its own making, Council might have sidestepped the provincially engineered trap a bit more elegantly. Instead its next few meetings are likely to be dominated by residents and developers on a quest for the County’s two points.

How it chooses to answer these requests may define its policy around renewable energy projects in Prince Edward County for years to come. It will want to weigh the issues carefully.

In April the McGuinty government announced it was changing the rules for new renewable energy projects seeking feed-in tariff (FIT) contracts. Energy projects under FIT contracts earn premium rates (many times the current market price) for the power they generate, guaranteed for 20 years.

Among the changes made was the addition of a points system to the evaluation process. Developers with more points will see their application move up in priority. In part to appease municipal complaints that local governments had been cut out of renewable energy decision making, the new FIT rules included the provision of two points to be awarded to projects that receive support from local councils by way of a motion. While the project application isn’t necessarily dependent on winning these points, some developers are betting a lot of money they will be a crucial factor in who wins a contract and who doesn’t. Skypower, for example, has offered $7,000 per MW per year for 20 years to this municipality for its two points. That’s $70,000 per year for each of about a half dozen 10 MW solar projects it would like to build here.

After the province announced the basic changes to the FIT program, it spent the summer refining the rules, leaving developers and local policymakers guessing.

In August the final FIT 2.0 rules were released. The next window to submit applications was just a few weeks away— from October 1 to November 31.

In September County staff presented a set of potential local requirements for council to consider when weighing requests for its support for FIT projects. This was a detailed 14-point list of prerequisites. Many of the provisions centred on ensuring proposed energy projects would not negatively impact neighbours or municipal infrastructure and coffers. It included a provision to make an annual payment of $7,500 per MW for the 20 years of the project plus a profit sharing sweetener in the form of four per cent of the output of the project.

But council felt it didn’t have enough insight on the issues in September and decided it needed the opinion of an expert on how it should proceed. In the meantime, they said, developers could come to a committee of council and each project would be considered on its individual merit—in absence of a common set of criteria.

There was no announcement—no notification to developers that this was how council would proceed.

So it was that Bob Hunter was before council last week. Hunter wants to build 17 acres of solar panels on the northern edge of Wellington along with a digester to process waste into biogas (see story page 3). He came looking for two points for each of these projects.

According to County staff there are about 50 other developers waiting in a queue seeking the municipality’s two points. At least one of these has been before council already this summer only to be told to go away until the rules had been sorted out.

All of these folks are likely to back at Shire Hall’s door for the next committee of the whole meeting— each requesting council’s two points for their project— particularly if they sense they might sidestep an annual fee and cost sharing arrangement with the municipality.

So rather than an orderly and transparent process, council has opted, at least for the time being, to make it up as they go along. They have wandered into a murky quagmire—but it could get much worse.

They could start granting the two points,in absence of any policy or common criteria. They will certainly hear some very appealing pitches—from neighbours, friends and colleagues. People who want to venture into the renewable business in a modest, reasonable and responsible way.

This is an alluring but dangerous trap—for the rules they create for folks they like, will become the rules for everyone. Council won’t be allowed to create one set of rules for its friends and another for large developers. Courts will surely take a dim view of this type of obvious parochial favouritism.

Better for council to head off the rush to Shire Hall now. Take the time it needs to understand the issues and potential impact. Then open up the wicket in an orderly and transparent manner—one in which the rules of the game are clear and understood by everyone.

Council can still wriggle out this mess, but its next step is a big one.

rick@wellingtontimes.ca