Campaign to nationalise industry -- Union bother in Quebec

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The four trades unions representing approximately 17,500 Hydro-Quebec employees have launched a public relations campaign aimed at convincing Quebecers that the province's burgeoning wind power industry should be nationalised. The unions, part of the Canadian Union of Public Employees (CUPE), blitzed the province with a series of radio and print ads during February and unveiled a web site with an online petition calling on the government to place all wind power development in the hands of Hydro-Quebec, the province's publicly owned, monopoly utility.

Charles Paradis, CUPE's coordinator for the electricity sector, says the unions are also seeking meetings with government officials, including Premier Jean Charest, to press their case. "We think the energy should be owned by all Quebecers through Hydro-Quebec as hydroelectric production is now," he says. He says profits should remain in Quebec for the benefit of the entire population, rather than flowing to the shareholders of private developers, many of which have headquarters elsewhere. It would also allow Hydro-Quebec to develop the same kind of world leading expertise in wind that it now has in hydropower, Paradis says.

Quebec currently has just over 212 MW of installed wind power capacity, all but 2.25 MW of which was built by private sector companies. In 2004, it awarded power purchase contracts to two developers for 990 MW of wind power from eight projects bid into the utility's 2003 request for proposals (RFP) for 1000 MW of new wind capacity. In the fall the utility launched a call for another 2000 MW of wind. It has also signed contracts outside of the RFP process for two projects totalling 254 MW.

Cancel contracts

The unions, says Paradis, want the government to cancel unfulfilled contracts signed in the first RFP, terminate the 2000 MW call that is currently underway and -- if the price is right -- have Hydro-Quebec buy the wind farms that are now operating.

Hydro-Quebec's Josée Morin refers questions on the nationalisation campaign to the provincial government, which has no plans to change its approach to wind power development, says the energy ministry's Mathieu St-Amant. "The reason why the Quebec government chooses to go with the private sector in regards to wind power is very simple. We want to offer Quebecers the best energy at the best price. For now, the private sector can do this," he says, pointing to the first RFP's average price of C$0.065/kWh.

For their part, Quebec's wind power producers do not expect the government to nationalise their industry. But they do take the campaign seriously, says Gilles Lefrancois of Cartier Énergie Éolienne, which won six contracts totalling 740 MW in the first RFP. The first of those, the 109.5 MW Baie-des-Sables project, is scheduled to come on line this year. "We believe that any campaign of disinformation is damaging and therefore we should do something about it." The industry, in concert with other renewable energy developers in Quebec, is in the process of deciding how it will respond.

Private sector cheapest

Lefrancois points out that other jurisdictions in North America with monopoly utilities have chosen the same path as Quebec. "All of these provinces and states have decided the best way to get wind power quickly and at the best price is to go through a bid process and have the private sector provide the wind energy," he says. "I am convinced that the process that was used for the first 1000 MW produced the best results."

An economic analysis of that RFP prepared for the unions, which concludes Hydro-Quebec could have produced the power for C$0.0417/kWh, is simply wrong, he says. Among other things, the analysis argues that Hydro-Quebec would have chosen better sites to develop. But through the bid process, counters Lefrancois, it had 32 proposals from nine developers totalling nearly 4000 MW to choose from, all within a limited geographical area on the Gaspé Peninsula. "How can someone say there are better sites in existence in the Gaspésie? It is purely theoretical. It is not based on anything valid."

The union bolsters its argument that the benefits of wind development are being lost to Quebecers by pointing out the winners of the first RFP are not all Quebec companies. Toronto's Northland Power will build two projects totalling 250 MW. Cartier is a partnership 62% owned by Alberta-based TransCanada Corporation and 38% by Quebec's Innergex II. It is based in Longueuil, Quebec.

Between them, says Lefrancois, Cartier and Northland will invest $1.5 billion in the Quebec projects, the kind of outside capital governments are usually clamouring to attract. Strict local content means up to 60% of project costs will be spent in the Gaspé region, he adds. "The jobs will be in the region. The wind farms will be in the region and people in the region will benefit. How can you find something bad with that?"

Many Quebecers he has talked to about the campaign, says Lefrancois, believe what the unions really want is to ensure the creation of unionised jobs in the wind sector. But Paradis says that is not the case. Hydro-Quebec's current workforce, he says, could handle wind farm operation and maintenance.

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