For those who remember the chaotic days of 2010 and 2011 (or those who are living in its aftermath), when wind contracts were given in lumps to NextEra, Samsung and IPC – These documents will be of much interest to you. My advice – just read through them all, when you have the stomach to do so.
London Free Press, John Miner
“It was a cesspool. It was shameful. I feel very badly after seeing what went on here for my fellow Ontarians and the ratepayers of Ontario. They are having to bear the burden of the shameful behaviour,” Appleton said in a transcript from the hearing. Read article
- Hearing Transcript – Merits (PDF Document) – October 26, 2014
- Hearing Transcript – Merits (PDF Document) – October 27, 2014
- Hearing Transcript – Merits (PDF Document) – October 28, 2014
- Hearing Transcript – Merits (PDF Document) – October 29, 2014
- Hearing Transcript – Merits (PDF Document) – October 30, 2014
- Hearing Transcript – Merits (PDF Document) – October 31, 2014
Here’s a taste from the Investors Post Hearing Submission
- In December 2010, the OPA released the FIT rankings for projects which had not received a contract. As noted previously, Mesa’s projects were ranked 8th and 9th in the region and, even taking into account the 500 MW set aside for the Korean Consortium, Mesa’s projects were within the 750 MW that would be allocated in the Bruce region. NextEra’s projects on the other hand were located in the West of London region, and due to the limited capacity which would be activated in this region (300 MW), most of NextEra’s projects would not receive a contract.
- Sue Lo stated that Ontario consulted widely with developers and stakeholders. However, no documents were provided to the Investor about Ontario’s consultation with other proponents, which the Investor requested and was granted by the Tribunal in Procedural Order No. 4, save for documents relating to Ontario’s consultation with NextEra.
- Realizing that it would not receive contracts in the West of London region due to the lack of available capacity, NextEra began lobbying the Ontario government for a change to the rules to allow changes in connection points amongst regions.
- Mr. MacDougall confirmed this, as he testified that, after he left the OPA, he heard that the reason the rules were changed to allow connection point changes between regions was because NextEra had lobbied for this result. Mr. McDougall explained that NextEra bundled its projects a the NextEra “six-pack” approach to “share a common connection, whose connection would be relatively expensive, but shared across six projects would make a connection economically viable.”
- This is confirmed by contemporaneous documents. Within days of NextEra executives meeting with the XXX, the Ministry] made the decision to allow a connection point window for projects in the West of London and Bruce.
- Prior to these meetings, Ontario had decided that it would not conduct a province-wide ECT and that an alternative allocation process would have to be utilized to award that capacity made available by the Bruce to Milton transmission line. The OPA recommended a modified TAT/DAT for the Bruce region, which would not allow a connection point window.
- To understand the results of the proposed TAT/DAT, the Ministry of Energy requested a “dry run” of the results. This dry run showed that XXXXX. Although Mr. Cronkwright had “concerns” about showing the results to the Ministry of Energy, and the document itself says that it should not be shared with the Minister’s Office, Mr. Cronkwright confirmed that the OPA showed the results to the Ministry of Energy.
- 156. Weeks later, Ontario government officials began meeting privately with NextEra. On XX NextEra’s Vice President, Al Wiley, personally met with XX. The next day, on May 11, Mr. Wiley met with Andrew Mitchell, Senior Policy Advisor in the Minister of Energy’s Office, and apparently a member of the secret “Breakfast club”, to discuss whether a connection point change window would be opened prior to the next round of FIT contract awards, which was a “a very significant issue for NextEra.” Then on May 12, the Premier met with the Ministry of Energy, and the decision was made to allow a connection point window change. On May 13, the morning after the decision was made, Ms. Lo met with NextEra, and in response to this call, Mr. Wiley sent Ms. Lo the names of the six NextEra projects “remaining in the FIT queue.”
- Days later, on May 31, Nicole Geneau of NextEra knew that a connection point change window was opening although no public announcement had been made.
- Ms. Lo contended that all FIT applicants were treated the same, but the documents in the record show that more favourable treatment was given to Pattern, International Power Canada and NextEra. IPC’s projects were protected from being shut out by a Korean Consortium set aside, something that was not offered to any other FIT proponent, while NextEra was given insider access to the outcome of the Bruce allocation process. And Pattern was allowed to benefit from the favourable treatment afforded to the Korean Consortium, a benefit which was not given to other FIT proponents like Mesa.
- Canada attempts to down play this preferential treatment by contending that the OPA had been advising FIT proponents since 2010 that a change window would be allowed prior to the first ECT.238 However, this contradicted the FIT Rules, which only allowed connection point changes prior to the first ECT for projects connecting to the distribution system. The FIT rules did not allow for such changes prior to the first ECT for projects connecting to the transmission system, like those of NextEra and Mesa.239 Therefore a FIT proponent like Mesa, that was relying on the FIT Rules for its understanding of the process, would have reasonably expected that projects like NextEra’s would not be able to change connection points prior to the first ECT, or prior to the awarding of contracts in the Bruce region.
- Furthermore, at no point, in any of these communications,did the OPA advise proponents that projects would be allowed to change their connection points to a different transmission area or that this would be done outside of a province‐wide ECT.
- To get around this, Canada contends that if the FIT Rules did not prohibit something, then it was allowed. This argument is unavailing. The OPA could have held stakeholder consultations to decide what course of action would best represent the understanding of the majority of the affected stakeholders. Had it done so, Ontario would have discovered that more affected stakeholders located in the Bruce region would oppose the change than affected stakeholders in the West of London as the proposed change window benefitted mainly two companies in the West of London, NextEra and Suncor, at the expense of 12 projects already ranked in the Bruce region that were in line for contracts (two of which belonged to Mesa).
- If a change amongst regions was what was originally intended under the FIT rules,and every proponent knew or should have known this, why did NextEra have to lobby for it? The reason is simple: this was not the understanding of FIT proponents at the time. Colin Edwards of Pattern Energy confirmed this during his deposition:
Q Okay. Do you know if the rules, prior to NextEra doing that, were – do you know if that had been allowed, for a project to go to a new transmission area?
A My understanding is that when theses – when applications were originally made in November of 2009, that they were confined to a given transmission zone, and I’ve been told that the ministerial directive of June 3, 2011, I believe, enabled developers to change circuits and to change transmission zones.
Q Was that news to you when it happened? News to Pattern?
Q You had no advanced knowledge that was going on?
163. In contrast to other major rule changes which would substantively affect the rights of proponents, there was no advance notice of the June 3 rule change, and no stakeholder consultations were undertaken. Canada’s witnesses confirmed that this was not the usual practice and consultations normally were undertaken.
- The reason Canada provided at the hearing for denying FIT investors the right to comment on a rule change that would substantively affect their rights was politics. Ontario’s government wanted to award contracts before the elections in order to promote the success of the program. For this purpose, the rights of stakeholders were ignored.
- The other reason given for not providing stakeholder consultations – theCANWEA letter – is equally unavailing:
- This letter was sent on May 27, 2011, weeks after the decision was made on May 12th.
- Mr. Cronkwright confirmed during his testimony, that he never was informed that the reason for the change to the FIT rules was the CANWEA letter.
- Like every other document referencing a window to change connection points, this letter made no reference to changes into a different transmission area.
- This was a wind association, and did not represent other renewable projects, such as solar proponents.
- Finally, this letter would have been sent in the context of a province‐wide ECT, not a Bruce‐specific allocation process as that was what the rules provided until they were abruptly changed.
- Accordingly, it cannot be said that this letter fairly represented all of the interested stakeholders in the Bruce allocation process.
- On June 3, 2011, the Ministry of Energy issued a directive setting out the allocation process that had to be implemented by the OPA for the capacity in the Bruce and West of London Region. This direction provided for a five (5) day connection point window, allowed projects in the West of London transmission area to switch to the Bruce transmission area, identified the capacity which would be allocated in the West of London and Bruce, and provided for generator paid upgrades.
- On the same day, a Friday, the OPA published the new rules and advised proponents that the connection point window would begin the following Monday, on June 6 and end on June 10. Mr. MacDougall testified that this weekend notice was not adequate.
- This rule change, in conjunction with the capacity set aside for the Korean Consortium, resulted in Mesa not receiving any contracts. Instead, as a result of the rule change, NextEra was able to get contracts for its “six‐pack.” Then, within less than a week of being awarded these contracts, NextEra made political contributions to the incumbent government of Ontario, which pushed for the rule change to occur without stakeholder consultations.
- Canada’s expert, Christopher Conclaves, has confirmed that but for the set of events, Mesa would have received contracts for at least its TTD and Arran projects.