Toronto gets ready for competition -- Seeking green power

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Toronto Hydro Energy Services is planning to buy 131 million kWh of green power a year to offer to customers when Ontario's electricity market opens to competition sometime next year. The company, the retail arm of Toronto's city-owned electric utility, issued a request for proposals for green power earlier in the summer and hopes to begin negotiations with winning bidders this month.

Joyce McLean, manager of green energy generation, says the utility would like to procure supply from a variety of renewable sources, including wind, solar, landfill or sewage gas, small hydro and anaerobic digestion of waste. Not only would this allow Toronto Hydro to gain experience with different technologies, she says, but allow it to "counter the more expensive technologies with the less expensive ones."

The company is in the market for green power that is already being generated in the province and from new projects that can be up and running by the time the market opens. "We're also looking for people who have interesting projects that we may either want to procure from after market opening or that we might want to co-develop," says McLean.

Once Ontario's competitive retail market opens, Toronto Hydro plans to expand beyond its traditional boundaries into the city's outlying suburbs. It is already the second largest municipal distribution utility in North America with 650,000 customers. McLean declines to put a number on the size of the customer base it hopes to attract, explaining that the process of analysing the green market potential is still in progress. "It's hard to predict how it's going to go because it really does depend on price, I think. We certainly hope this market is going to be an ever-growing one."

Despite the uncertainty, she says, the company is committed to offering its customers a green choice. "We think it's important, and it's certainly important from the point of view of the shareholder of Toronto Hydro, which is the City of Toronto. The city has some quite aggressive environmental goals vis-à-vis CO2 reduction and smog reduction." One of its goals is to buy 25% of its own electricity supply from green sources, she says, which is "roughly equivalent" to the 131 million kWh the utility is shopping for now.

In addition to the current purchase, the company hopes to have wind power from a joint venture project with the Toronto Renewable Energy Co-operative (TREC) to add to its "green pool" of electricity. In August, the partners received site approval from city council for the first of two planned wind turbines to be installed on Toronto's waterfront.

Waterfront RFP

Deborah Doncaster, the co-op's project co-ordinator, says the partners hope to issue an RFP for the purchase and installation of the wind turbine by November and have construction underway by early spring 2001.

Half of the turbine's output will be assigned to Toronto Hydro and the other half will be owned by TREC members, who will receive a credit for the power on their Toronto Hydro bills. The two parties still have to hammer out the details of their net billing agreement, says Doncaster. In addition, the project faces a challenge from an organisation concerned about the effect of the wind turbine on bird life on nearby Leslie Spit. Doncaster says the area in question is two kilometres from the turbine site. "I think we are fairly confident we would win a challenge," she says, but adds the partners hope to negotiate a resolution.

If the turbine is commissioned on schedule, it could be in time for Ontario's electricity market opening. The province had hoped to start retail competition this November, but was forced to delay it to further develop the systems required to operate the market.

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