The Ontario Power Authority gave Eastern Power $10 million as a “sign
of good faith” while trying to convince the company to stop
construction at the Mississauga gas plant the Liberal government had
promised to move.

But the OPA doesn’t consider the money part of the cost of relocating
the plant and it isn’t counted in the $180 million Energy Minister
Chris Bentley announced it would cost the public to move it to Sarnia.
The Liberals had reversed themselves on the plant in the middle of last
fall’s election, and promised to move the plant in the face bitter local
opposition.

“Before agreeing to a cessation agreement, Eastern Power/Greenfield
South wanted a sign of good faith, recognizing that a permanent
relocation agreement would take months to negotiate,” OPA spokesman
Patricia Phillips wrote in an email.
“Eastern Power identified resolution of a separate dispute it had
with OEFC (Ontario Electricity Financing Corporation) as a gesture of
that good faith.”

That separate dispute didn’t involve the OPA but the authority still
felt it would be “a good mechanism” as it was due to inherit the OEFC’s
disputed contract with Eastern anyway, Phillips said in her email, which
she did not agree to elaborate on.

That dispute involved a so-called ”non-utility generation” (NUG) contract for power from Eastern’s Keele Valley biogas plant.


To show its good faith, the OPA advanced $10 million to Eastern, with
$4.6 million of it to be refunded “once the dispute was settled”,
Phillips said. “To this point, a contract has not been finalized,” she said.


The remaining $5.4 million has gone to Eastern, she said, but shouldn’t be included in the cost to relocate the company’s plant.


“In summary, while a simultaneous consideration, the NUG payment was
with respect to resolving a separate electricity contract dispute,”
Phillips said. “As a result, it is the OPA’s view that the $5.4m is not a
relocation cost.”

Internal OPA emails released by the Legislature’s estimates committee
show the authority was scrambling to convince Eastern Power to stop
construction on the Mississagua gas plant even after the Liberal
government had announced in October 2011 it would be moved. Opposition parties
were having a field day at the time as work went on at the supposedly scrapped plant.

Just days after those emails show OPA officials discussing giving
Eastern a $5 million “adder” to its Keele Valley contract, a resolution
to the dispute and end to the construction was announced by Bentley on
Nov. 21.

Phillips said though that ultimately, Eastern did not receive an
adder to the contract, and that money was “on a separate matter”.
The OEFC said, also in an email, that it was prepared to terminate
its contract with Eastern on Keele Valley if the OPA was able to reach a
new deal with the company, but it continues to “hold and administer the
Keele Valley contract.”