By Ian Ross
The proponents of a new energy-producing plant in the works for Thunder Bay are waiting for the province to confirm this month whether a competitive electricity market will open this spring before proceeding with their plans.
Larry Hebert, president and chief executive officer of Thunder Bay Hydro, expects a formal announcement from Queen's Park sometime between Dec. 14 and 17 determining if the market will open May 1.
The plant proponents, an undisclosed American business, intend to make their intentions known shortly thereafter.
Having been previously burned on a failed $10-million (US) deal in eastern Ontario, attributed to a earlier postponed opening date, the proponents have put off their plans a number of times and will not commit to Thunder Bay until the province confirms their intentions, Hebert says.
Judging by the speeches from various cabinet ministers, Hebert expects the province will not delay the decision, and all signs point to a deregulated market in 2002.
"(The province) can't afford to have another false start, so I think May 1 will be the date," says Hebert. "All (the plant proponents) are looking for is that confirmation and away they go."
Though details on the project are scarce, the $1.9-billion plant would generate 1,000 megawatts for the U.S. and Canadian markets. Hebert would not reveal details on how many construction or permanent jobs would be created since the complex project comprises several components with an "array of operators." A study is to be finalized by the end of November and will produce exact figures for jobs and any spinoffs.
One of the negotiating points under consideration, Hebert says, is keeping some Canadian control to ensure additional generating capacity is supplied to Thunder Bay and northwestern Ontario to attract new industry and stimulate economic growth.
Also, the Northwestern Energy Association (NEA), which includes Thunder Bay Hydro, is bidding to acquire two thermal power plants in Thunder Bay and Atikokan from Ontario Power Generation. NEA expects to hear whether their bid was accepted, ironically, about the same time as the province's announcement. The association is searching for partners to help run the plants.
Hebert has no doubt that once the market is open that electricity prices will increase in the shortterm until competition truly takes hold.
"I'll be shocked if it doesn't go up," considering the host of new charges added onto ratepayers' bills, including paying off Ontario Hydro's stranded debt and regulatory charges, Hebert says.
Even a spokesman for energy minister Jim Wilson admitted in published reports in early November that the ministry has no expertise to determine whether consumers will be paying more or less when competition among suppliers begins.
Double-digit increases are a possibility, Hebert says. An increase anywhere from between one-and-a-half to two cents higher than current prices is possible. This increase may translate to a 25 per cent jump for consumers.
"I see costs going up in the short term, but they will come down with competition. But the government's been quiet lately on rates going down."
Hebert says there appears to be enough generating capacity after importing power from the United States, considering how Ontario weathered this past summer's heat wave, but transmitting capacity is a major limitation that needs to be improved to stay competitive.