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Canada

Canada

Contracts stopped in their tracks

Canadian utility Ontario Hydro has delayed itslong awaited announcement of the winning bidders in its Renewable Energy Technology Strategy (RETs. No official explanation has been given for the freeze on the announcement -- originally scheduled for April -- but observers say it is due to the uncertainties in the restructuring of Hydro's electricity system. These unknowns include the recommended break up of Ontario Hydro into several competing companies).

Ontario Hydro's request for proposals (RFP), issued in May 1995 for 50-60 MW, is the first round of a programme for up to 120 MW of renewable capacity. Six wind turbines and four small wind plants were among 17 final bids chosen for supply of 49.5 MW. Of these it is known that Hydro had chosen ten preferred candidates for contracts. In addition six bids for medium scale wind farms are still being assessed in a sub-round of the RFP.

The original in-service date for projects, except medium wind plants, was scheduled to be December 31, 1997, while the corresponding date for medium wind plants was December 31, 1998.

Brian Kelly, Hydro's director of environment and sustainable development says: "We went to a management committee with the recommended candidates. We were asked to complete the medium wind farm category and come back in early fall with a complete list of preferred competitors." Since then no meeting has been held or scheduled, and Round 1 selections have been delayed indefinitely. In the light of restructuring, "There is a lot of concern about who we may be obligating by entering into 15 year power purchase contracts," says Kelly.

Hydro has said its intention is to fully commercialise renewable energy technologies when excess capacity is shed from its system in several years. This potential has recently increased due to the loss of nuclear system capacity following nuclear safety and operating difficulties experienced in Hydro's fleet of 19 Candu reactors, which have typically provided over 60% of its electricity.

The Independent Power Producers' Society of Ontario (IPPSO) has expressed "grave concern," pointing out that its members have invested large sums in the bids. These included payment of a required "certified connection estimate" (CCE) fee, some of which were substantial and amounted to several million dollars in one case, according to a Hydro official.

Ontario Hydro is striving to maintain its electricity monopoly and is using discriminatory rate structures and court action to prevent its municipal and industrial customers building or obtaining high efficiency self generation. Unlike the situation in the US, with wholesale open access and experiments with retail competition and green pricing, heavily indebted Ontario Hydro is in effect locking its customers into long term use of its coal, nuclear and hydroelectric generation.

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