North pays for OPA mess: Hampton – by Kris Ketonen (Thunder Bay Chronicle-Journal – November 16, 2012)

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

The Ontario Power Authority (OPA) is trying to solve southern Ontario problems at the expense of the North with its push to halt the Thunder Bay Generating Station’s conversion to natural gas, the former leader of the provincial NDP said Wednesday.

“I don’t think the OPA is thinking about Northwestern Ontario and what’s good for the Northwest,” Howard Hampton said Wednesday.

“I think they’re thinking about solving some of the problems they’ve created in south and eastern Ontario. They’re thinking more about that, and using Northwestern Ontario as a piece of the puzzle.”

The Ontario government, at the behest of the OPA, has put a hold on plans to convert the Thunder Bay Generating Station from coal-fired power to natural gas. The OPA has said halting the project will save $400 million, and the region’s power needs can be met by other means, such as the to-be-expanded east-west tie-line that moves electricity between Northern and southern Ontario.

And while the government has not cancelled the plant conversion — Energy Minister Chris Bentley is waiting to see the OPA plan before making his decision — the hold has representatives in the region sounding the alarm.

Northwestern Ontario, they say, is on the cusp of a mining boom, with several new mines expected to enter production within the next few years. Mining activity will bring enormous power needs — a reliable supply of more than 1,300 megawatts is expected to be required after 2016 — which can only be met if the city’s generating station is operating at full capacity, which in turn will only happen if it’s converted to run on natural gas, they have said.

The government is phasing out coal-fired power generation in the province and wants to be off coal by Dec. 31, 2014. If the plant isn’t converted by then, there’s concern it will be shut down.

Hampton — a long-serving Northern MPP who did extensive work on Northern energy issues, including authoring a book on the subject, during his political career — agrees with those from the region.

“I think that if you want to be sure of a sustainable supply of electricity for businesses and industries in Northwestern Ontario, a gas plant conversion in Thunder Bay has to be part of the equation,” he said from Toronto, where he works as a lawyer.

What’s putting the Thunder Bay plant conversion in jeopardy, Hampton said, is that the province is finding itself with a surplus of power in some parts of southern and eastern Ontario.

“They still have power supply problems in and around Toronto,” he said.

“If you look at southwestern Ontario, for example, where a number of the car parts plants have shut down, and where you’ve got a number of wind turbines coming on stream, you probably have more power there than is needed.”
In addition, nuclear power is coming back online at the Bruce Peninsula, and central Ontario has its own wind turbines starting up.

“You can’t take all that supply back into Toronto,” he said. “There isn’t the transmission.”

As a result, Hampton said, the government is selling some of the excess power to the United States at a loss. So, the OPA wants to expand the east-west tie-line so more of that power can be moved to Northwestern Ontario.

But they can’t, Hampton said, do both, especially given the costs associated with cancelling power plant projects in Oakville and Mississauga.

“They’re under some financial pressure,” he said. “No matter how the government has tried to hide the aftermath of these two cancelled gas plants in the western portion of the Greater Toronto Area, that $1.5 billion — which is what I think all the end cost is now — does create some financial problems.

“That’s going to have to be added to the hydro bill in one way or another. Some of the other stuff that’s been done, like the ($7-billion green energy deal with Samsung), and so on, that’s going to have be added to the hydro bill.

“It’s going to become increasingly difficult to say to people who see their hydro bill going through the roof that, at the same time, we’re selling some of our power at a loss into the United States. This becomes a very unbalanced picture, but at the end of the day, I think people in Northwestern Ontario need to ask the question: is this plan . . . really in the best interests of Northwestern Ontario, or is that really aimed at solving a problem they’ve created in eastern and southern Ontario?”

The government is citing the Little Jackfish hydro project as a way to help meet the region’s power needs if the plant conversion doesn’t go ahead.

“That thing has been talked about and talked about and talked about, and hasn’t happened,” Hampton said. “Why is that?
“I think people need to ask that question.”

In addition, the Atikokan coal plant will run at a much-lower capacity after its conversion to biomass, Hampton said.
When burning coal, that plant generated about 200 megawatts; after conversion, it will provide about 20 megawatts of sustained power output, with the ability to “peak up” for a limited period of time, he said.

“Here is the reality: the electricity challenges for Northwestern Ontario are far, far different from the electricity challenges in southern Ontario,” Hampton said.

“My argument would be that if the provincial government had sat down at the beginning and said ‘OK, what should be the electricity strategy for Northwestern Ontario,’ I think we’d be far better off today. But they didn’t do that.”