CNPCL's James Fretz says his company is interested in expanding through limited investment in environmentally friendly renewable resources, including wind and water, "wherever they are accepted in Canada." The company's mandate currently restricts it to investment in projects already up and running, but there is interest in participating in Ontario Hydro's renewable technologies programme which is shortly to issue a request for proposals (Windpower Monthly, January 1995).
"We chose Cowley Ridge as our first wind power investment primarily because the project was on the market when we made our decision to focus on new renewable investments," said Fretz. Terms of the transaction between Kenetech and CNPCL are subject to a confidentiality agreement, but CNPCL says debt and equity financing was structured by Toronto based Probyn & Company. The equity will be held by Canadian Niagara Windpower, a full subsidiary of CNPCL established in December in Alberta. Firms from Quebec may eventually take a partnership interest in this company.
Stephen Probyn says it is the first wind project financing in Canada that his company has undertaken. "We have arranged more than two-thirds of all renewable energy project funding in Canada and we are actively seeking other wind power financing opportunities. Renewables are appropriate for today's energy market," he adds. Probyn is still working on financing the debt component of the deal.
Since 1950, CNPCL has been a subsidiary of the privately owned Niagara Mohawk Power Corporation (NiMo) of Syracuse, New York. Niagara Mohawk has been testing two 360 kW Kenetech 33M-VS turbines since 1993 outside the town of Denmark, New York. Kenetech president Gerald Alderson says, "Cowley Ridge was developed by Kenetech in part to demonstrate the performance of the 33M-VS wind turbine technology in harsh cold weather environments. While the project was not particularly profitable for Kenetech, it proved the 33M-VS turbine in these conditions."
Alderson notes that development costs of Cowley Ridge and other expenses absorbed by Kenetech were high relative to the small size of the project. The plant's initial role as a cold weather proving ground increased installation costs -- and exchange and interest rates in Canada held down the price of the wind plant. Fretz says his firm is "comfortable that Cowley Ridge will be a profitable project for CNPCL." Kenetech will continue to operate and maintain it.
Founded in 1892, CNPCL is one of Canada's oldest power suppliers. CNPCL's 74 MW hydroelectric powerhouse is tucked away on the Ontario side of the Niagara River, near the Canadian Falls. Unlike other Niagara Peninsula companies, it was never absorbed by the provincial power monopoly Ontario Hydro, which was formed in 1906. CNPCL markets surplus power to NiMo, which wheels a portion through New York state to Cornwall Electric in eastern Ontario near Quebec.