Cochrane Power biomass plant to shut down, unless government acts

May 11, 2015

By: Timmins Press

After seeking a renewal to their energy selling agreement with the provincial government for over a year in order to remain open, the Cochrane Power plant will be shut down if doesn’t get a new contract, or an extension to its current one, by midnight tonight.

Northland Power, which owns the plant, has until tonight to secure a new long-term agreement with the government-run Independent Electricity System Operator (IESO), to allow them to continue selling the electricity they produce using biomass – sawdust, bark, wood chips — taken from local mills.

As of Sunday evening, Northland Power confirmed that were no negotiations for a last-minute deal to save the power plant and the company expects they will have to shut down the Cochrane facility after Monday.

“We have been working very hard to ensure a future for this facility, but without an agreement to sell our electricity to the grid, we are forced to stop generating it,” said the company’s CEO, John Brace in a statement.

Cochrane Power’s 25-year energy selling agreement was original scheduled to expire in January, but in December the IESO secured a four-month extension from the holder of Cochrane Power’s contract, in order to give the company more time to negotiate a new one. Despite the extra time, no progress was made because the company has found itself caught within a regulatory catch-22.

According to the Cochrane plant’s manager, Gary Huizing, the very same day they received the extension, the Ministry of Energy suspended all contract negotiations between the IESO and small energy producers until the IESO develops a new framework for those negotiations. That framework, which was supposed to be ready next month, has now been pushed back until September.

“I hate to say it, but it seems like one side isn’t talking to the other. We don’t understand why we were given an extension to negotiate, and on the very same day the Minister says there will be no more negotiations,” said Huizing.

So, with no possibility of a new contract from the IESO until the fall, Northland Power turned to the holder of the Cochrane plant’s current contract, the Ontario Electrical Finance Corporation, to ask for another extension to their current agreement. But the corporation refused.

“They said they will not give another extension to the contract unless someone from either the Ministry of Energy or the IESO gives the go-ahead. And so far, they will not give that go-ahead, ” explained Huizing. “We have talked to (Northern Development and Mines) Minister Michael Gravelle a few times and said he is going to try to do something about it. Energy Minister Bob Chiarelli will not speak to (us) directly because he says cannot be involved with a negotiating party to a contract.”

With no new agreement, no contract extension, no ability to appeal directly to the Energy Minister, and only one day left; the company is bracing for the shutdown of the plant, which will jeopardize almost 30 jobs.

Huizing says Northland Power will try to find the money to keep its employees paid for the next two months to prevent their highly-specialized workforce from leaving while they try to get the government to act. But they will not be able to wait until September to reopen.

The mayor of the Town of Cochrane, Peter Politis, has said the loss of the power plant and the job would be “catastrophic” for the municipality’s finances.

“They buy water from the municipality to create steam, which turns the turbines in power generation,” the mayor said last June, when the town and company asked the Northeastern Ontario Municipal Association to help lobby the government to renew the plant’s contract. “They are the largest consumer of water in the community and they pay the largest portion of the water costs. So if that facility were to close, the residents would have to shoulder the burden of that cost.”

Heat from the power plant is also siphoned off to warm Cochrane’s community centre, which was designed with the free heating in mind. 

By: Timmins Press

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