Northland Power announced July 4 that it has signed a Long-Term Enhanced Dispatch Contract (LTEDC) with the Independent Electricity System Operator (IESO) for Northland's 120-megawatt cogeneration facility located in Iroquois Falls.
The contract, which took effect July 1, expires in 2021 and replaces the facility's previous contract with the Ontario Electricity Financial Corporation.
Last January, the company was told by the IESO to cut back on power production for four months while the province rejigged the way small independent power producers feed electricity into the Ontario grid. Northland Power was still paid in full under its old contract even though they produced less power.
This new contract appears to address the province’s needs by having small producers step in to ramp up supply during peak periods.
Under the agreement, the co-generation plant will operate in “dispatchable mode” – only producing power when it’s needed for the grid – rather than in “baseload” mode, which is providing a continuous stream of electricity.
The Toronto-based utility said the new deal will have no impact on jobs at the 120-megawatt facility and there will be savings from costs related to cap and trade, maintenance, natural gas, and gas transportation.
In a statement, Northland Power CEO John Brace called it a “win-win” agreement.
"This contract reduces overall costs for ratepayers while providing a number of benefits for Northland. With a 30-year history of sustainable power generation in Ontario, we are proud to work with the IESO to meet the evolving needs of our electricity system."
Northland Power operates other co-gen natural gas and biomass power plants in Cochrane and Kirkland Lake.