The price of [power-plant] conversion – Thunder Bay Chronicle-Journal Editorial (August 13, 2012)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

ONTARIO’S plan to close all of its coal-fired power plants by 2014 has suffered another setback and a Thunder Bay city councillor wants to make sure it doesn’t last long. Larry Hebert, a former city hydro official, has revealed that conversion of the Thunder Bay Generating Station from coal to natural gas is on hold because two branches of Ontario’s energy kingdom can’t agree on price. Hebert worries that advancing climate changes could result in a combination of low winter snow and summer drought that stretches hydro dams’ ability to power the Northwest coinciding with the scheduled plant closure in just over two years.

Ontario has failed to meet earlier targets to shut down the dirty coal plants because it could not get alternate energy sources up and running. It is now trying to encourage wind and solar power projects while it converts the remaining coal plants to gas or, in the case of Atikokan, forest biomass. And it cancelled two gas plant projects in southern Ontario to save Liberal seats in the last election, the costs of which will be staggering.

These are all large-scale projects that need long lead times and jobs of this scale inevitably run into delays. That is why Hebert wants council to agree tonight to petition the Energy minister to force a price agreement to get the Thunder Bay plant conversion back on track.

The breakup of the former Ontario Hydro into a series of agencies to plan, produce and sell electricity has driven up costs and caused many observers to recommend a simpler structure.

In this case, Ontario Power Generation has called a halt to project engineering work at the Thunder Bay generating station on Mission Island because OPG can’t strike a power purchase agreement with the Ontario Power Authority.

Essentially, OPG is worried that it will not be able to recover the cost of the conversion.

How did it come to this? Is there so little political oversight during a long hot summer that one of the government’s leading priorities is held up by two of its own agencies haggling over price?

City council should support Hebert’s motion with all due haste. If that plant isn’t running on schedule, rolling brownouts or even blackouts could occur. Not acceptable, given the lead time available.

Is this an argument for the Nor’Wester wind farm?

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