Davis LLP - Environmental, Energy and Resources Law

BC Hydro announces 19 Clean Power Call projects

Thu, 11 Mar 2010 19:43:00 EST

Submitted by Grant Boyle

BC Hydro announced it has selected 19 projects for an award of an electricity purchase agreement in its Clean Power Call: 14 run-of-river hydro and 5 wind projects representing around 900 MW of capacity. 28 projects are still under consideration.

Following the execution of the contracts, BC Hydro will submit the electricity purchase agreements to the British Columbia Utilities Commission for review. Project details, including the range of electricity prices to be paid, will be available in the Commission filing.

The announcement of the awards comes after a long journey for BC's Clean Power call, including the BC Utilities Commission's rejection of BC Hydro's Long-term Acquisition Plan, uncertainty over the adequacy of First Nations consultations and uncertainty over the size of the Call.

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Hydro-Quebec, Green Mountain Power and Central Vermont Public Service Corporation announce a 26-year Power Supply and Purchase Agreement

Thu, 11 Mar 2010 16:45:00 EST

Quebec Premier Jean Charest and Vermont Governor Jim Douglas today jointly announced the signing of a Memorandum of Understanding (MOU) for a 26-year power supply and purchase agreement.

Hydro-Quebec, who currently provides about one-third of Vermont's electricity pursuant to a contract signed on December 4, 1987 and set to expire in 2016, would continue to do so as a result of the proposed agreement. The contract would take effect in 2012 and run through 2038. Key terms of the deal were not disclosed, however the Vermont utilities would buy up to 225 megawatts and use a "price-smoothing mechanism" that would shield Vermont customers from market price spikes throughout the duration of the contract.

Certainly a key consideration for Hydro-Quebec, Vermont lawmakers would enact legislation currently before lawmakers which designates large hydro power, including that produced by Hydro-Quebec, as renewable energy, with any resulting credits to be shared by the three corporations.

In a joint news release, Central Vermont Public Service Corporation's President Bob Young, and his counterpart at Green Mountain Power, Mary Powell, were quoted as saying "This agreement sets the stage for a new contract that will help us maintain what is arguably the cleanest power supply in the nation, while ensuring a relatively stable and affordable future for our customers [...] It continues a relationship that has helped us provide competitive rates in the Northeast, with minimal air and greenhouse impacts."

Negotiations had been ongoing for over a year, although Vermont's energy future drew attention in early 2010 following reported tritium leaks in Entergy's Yankee nuclear power plant. Although an application has been made for a 20-year extension, the plant is scheduled to close when its license expires in 2012.

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Quebec Mining Sector remains strong in 2009, record investments expected in 2010

Thu, 11 Mar 2010 09:59:00 EST

The province of Quebec's Statistical Institute ("QSI") today released its 2009 analysis of mining sector data which confirms that notwithstanding diminished investment, the sector remained strong in 2009. The QSI based its analysis on preliminary data gathered from mining companies through Q3 2009. In total, $1.67 billion was invested in the province's mining sector, down 17% from the preceding record year, but in line with 2007.

Quebec's Abitibi-Temiscamingue region led investment with a total of $661million, mostly as a result of Osisko's flagship Canadian Malartic project, as well as Agnico-Eagle's continued work on the LaRonde, Lapa and Goldex projects. The CÃ´te-Nord region followed with $508 million in investments, due to several iron ore projects.

Investments in exploration diminished slightly more during the financial downturn ($370 million), down 34% from 2008, however consistent with the 5-year average. Exploration by juniors slipped from 78% to 64% of the total, with the majors playing a more active role.

At an average price per ounce close to $1100 in 2009, gold remains the main mining play, taking up 61% of the total exploration and extraction investments. Copper, Zinc and Nickel dropped to 16%, slightly ahead of Uranium, at 13% and Lithium, which drew 1.6% of 2009 investments.

Detailed tables showing 2009 mining investment in Quebec are available on the QSI's website (French only).

2010 may very well be a record-breaking year, as mining companies have indicated that they expect to increase overall investment 30% compared to 2009, up to $2.2 billion, of which $467 million will be for exploration activities.

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OPA announces a total of 510 FIT contracts

Wed, 10 Mar 2010 14:01:00 EST

Further to our posting this morning about Loblaw's, the Ontario Power Authority ("OPA") offered a total of 510 Feed-in Tariff ("FIT") contracts today. In its press release, the OPA described the allocation of contracts as follows:

"The 510 projects are to be built in 120 communities across Ontario by farmers, municipalities, local distribution companies, commercial businesses, industrial customers, public institutions, such as schools and hospitals, a winery and even a church. The projects range from 10 kilowatts to 500 kilowatts and have a total generating capacity of 112 megawatts - enough energy to power more than 13,000 homes. About 95 percent of the projects are for solar generation. The remaining projects are biogas (20), water (4), onshore wind (3) and biomass (1)."

A complete list of projects and their proponents is available on the OPA's website.

All of the projects qualify as capacity-allocation exempt projects, meaning that they are not subject to the Transmission Availability Test under the FIT rules.

Up next: projects that are not capacity allocation exempt. These will include distribution-connected projects over 250 kW if connected to a less than 15 kV line or 500 kW if connected to a 15 kV or greater line and stand-alone projects as well as transmission connected projects. Proponents of these projects are no doubt anxious to hear from the OPA: not only are these projects bigger, but they are also subject to the Transmission Availability Test. Proponents may have made some big bets on their shovel-readiness under the OPA's FIT program launch rules.

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Ontario Power Authority awards first FIT contracts to Loblaw's; more to follow

Wed, 10 Mar 2010 10:37:00 EST

The Ontario Power Authority ("OPA") awarded its first 100 Feed-in Tariff ("FIT") contracts to Loblaw's this morning. More announcements are expected today and in the coming weeks.

"These projects will create a new source of income for businesses while providing new clean and green electricity in Ontario -- particularly on hot, sunny summer days when demand soars," said Brad Duguid, Ontario Minister of Energy and Infrastructure. "With our new domestic content rules, these projects will also help create new green collar jobs here in Ontario as well as major economic investments in equipment and services here at home." Bob Chant, vice president, corporate affairs, Loblaw Companies Limited added that Loblaw's believes "green energy production using innovative technologies such as these pilot projects, supports our commitment to the environment."

Loblaw's will be working with Northland Power Income Fund to implement the first four projects as a pilot. "We believe that solar energy, especially rooftop solar energy, will play a major role in Ontario's green energy future while dramatically reducing greenhouse gas emissions," said Jim Temerty, Chairman of Northland Power Income Fund. Assuming the pilot is a success, Loblaw's will then roll out the balance of the projects.

The announcement has been eagerly anticipated by prospective renewable power developers. The OPA accepted over 2,000 applications during the launch phase of the FIT, which ran during October and November of last year, and has received over 2,000 more applications since. The OPA awarded 700 microFIT contracts before Christmas, but these very small scale projects only amounted to a total of about 8.6 MW of generating capacity. Applicants who proposed larger scale projects have been waiting for over three months for the OPA to begin awarding FIT contracts.

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OPA and MEI enhance stakeholder consultation regarding FIT domestic content requirements

Thu, 04 Mar 2010 09:52:00 EST

Ontario has been praised internationally for its renewable energy Feed-in Tariff ("FIT"), the first of its kind in North America. If commentators have one reservation, however, it is about the domestic content rules, which require project proponents to source prescribed percentages of equipment and labour in Ontario. With the Ontario Power Authority ("OPA") set to announce the next wave of FIT offers in the coming weeks, proponents are now peppering the OPA and the Ministry of Energy and Infrastructure ("MEI") with questions about the domestic content rules. To their credit, both the OPA and MEI appear committed to continuing the open consultation process that has characterized the development of the FIT.

Beginning last December, the OPA posted interpretations of the domestic content rules online. The OPA announced this week that it will now be undertaking a more transparent and accountable process for issuing guidance on the domestic content rules. The new process will include the following steps:

* stakeholders may submit feedback and questions relating to designated activities for domestic content;

* the OPA and/or MEI will review feedback and questions;

* the MEI/OPA will produce draft interpretations and post them on the FIT Program website;

* stakeholders may provide feedback on the draft interpretations;

* the OPA and/or MEI will review of feedback; and

* they will post the final interpretation on the FIT Program website.

The OPA will announce draft interpretations on its website and by email to FIT email update subscribers.

The first draft interpretation to be developed pursuant to this process concerns designated activities for inverters. The draft interpretation was posted March 3 and is open for comments until March 10.

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Canadian Government to invest close to $80 million in Quebec Ethanol Plant

Tue, 02 Mar 2010 11:06:00 EST

Steven Blaney, Member of Parliament for Levis-Bellechasse, today announced that the Government of Canada's ecoENERGY for Biofuels program will provide funding of up to $79.75 million over 7 years to GreenField Ethanol's Varennes production facility.

GreenField's Varennes facility will produce about 145 million litres of ethanol a year and is Quebec's first ethanol producer. Compared with gasoline, grain-based ethanol can reduce greenhouse gas (GHG) emissions by up to 40 percent on a life-cycle basis. For biodiesel, the emissions reduction can be as much as 60 percent.

Through the ecoENERGY for Biofuels program, the Government of Canada is to invest up to $1.5 billion in such ventures over nine years. The Government's Economic Action Plan also dedicates $1 billion to the Clean Energy Fund and $1 billion for the Green Infrastructure Fund.

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SDTC now accepting statements of interest for next round of SD Tech Fund funding

Wed, 24 Feb 2010 10:00:00 EST

Sustainable Technology Development Canada ("SDTC") will be accepting Statements of Interest ("SOIs") for its the SD Tech Fund from February 24 to April 21, 2010. The SOI is an initial application used for preliminary screening and is subject to a competitive review process by SDTC and a panel of independent experts.

SDTC's SD Tech Fund supports projects that address climate change, air quality, clean water, and clean soil. To date, SDTC has completed 15 funding rounds and allocated a total of $464 million to 183 projects. SDTC funding has been leveraged with an additional $1.1 billion in funding from other project partners for a total project value of $1.5 billion.

SDTC focuses on funding development and demonstration projects, which SDTC also describes as projects that take technologies out of the laboratory and prove them in real-world test situations. SDTC funding is not available for primary research and development or for initial proof of concept projects. Applicants must therefore demonstrate that:

* the proposed project is technically sound and undertaken by an applicant with the necessary technical, financial and management capacity;

* the proposed project will be undertaken in a collaborative and innovative manner;

* the new technology and related intellectual property will be diffused in a timely manner in the relevant market sectors; and

* the funding is necessary to ensure that the project proceeds in a manner to ensure broad benefits to Canadians nationally or regionally.

Projects must pertain to one of the following primary sectors of Canada's economy:

* Energy Exploration, Production, Transmission and Distribution;

* Power Generation;

* Energy utilization;

* Transportation;

* Agriculture, Forestry and Mining;

* Waste Management; or

* Cross-sectoral initiatives.

Part of SDTC's mandate is to encourage consortia that include key technology stakeholders including researchers, product developers, manufacturers, distributors, retailers and end customers. Applicants for SDTC funding must therefore meet SDTC's consortium requirements.

SDTC has published two helpful webinars for prospective SOI applicants. The first helps potential applicants to determine if they should submit a SOI. The second is a guide to creating a high quality SOI submission.

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US spurs new nuclear construction; Ontario tries to keep existing fleet alive (for now)

Thu, 18 Feb 2010 10:06:00 EST

As the U.S. continues to reveal incentives to spur a nuclear renaissance south of the border, officials in Ontario attempt to extend the life of existing reactors. The two sets of policies reveal how nuclear power is intertwined with economic concerns, green energy policy, and efforts to combat climate change.

US loan guarantees

As reported by BusinessGreen.com, President Obama announced US$8.3 billion in loan guarantees for the construction of two new nuclear reactors in Georgia. This is only one slice of the $18.5 billion loan guarantee pie that Congress has already approved. The Obama administration is seeking approval of an additional $54 billion in loan guarantees, all as part of a strategy to revive the dormant nuclear industry in the U.S.

Environmentalists are angered at the prospect of new nuclear plants, despite the President's promise in his recent State of the Union Address to build "a new generation of safe, clean nuclear power plants."

However, the President's push for nuclear appears to be significantly motivated by environmental concerns. Specifically, the loan guarantees are viewed by many as a way to garner Republican support for the climate change bills that are mired in Congress. As discussed below, nuclear power also fits into the province's climate change strategy, although in a much different way.

Ontario refurbishments and planned closure

Ontario Power Generation ("OPG"), which is owned by the province, made two significant announcements in the past week. First, OPG revealed that it will close the Pickering nuclear station in 10 years, but only after spending $300 million to refurbish the reactors in the interim. Pickering station has a nominal output of 3,100 MW, which accounts for about 8% of Ontario's installed capacity. Second, OPG indicated that it would spend an undisclosed amount on refurbishing the Darlington nuclear station. It is unclear if the refurbishment would spell the end of the proposed procurement of new reactors for Darlington, which the Ontario government suspended last year, citing the suprising cost of private-sector bids from AECL and Areva (pegged north of $20 billion) as the reason for doing so.

Opposition critics were quick to pounce on the McGuinty government, expressing concern about the price tag for keeping the stations running. The Toronto Star quotes New Democrat energy critic Peter Tabuns as saying, "You don't make a multi-billion dollar decision based on a guess. "Either they're withholding numbers from the public or they're making a guess. In either case, that's indefensible."

Environmentalist, on the other hand, praised the decision. Referring to the Pickering announcement, Greenpeace energy specialist Sean-Patrick Stensil said, "For once OPG has told the truth about a project being uneconomic and saved the ratepayers millions if not billions of dollars. The ball is now in the government's court, and they need to give direction as to how Pickering will be replaced, and it can be replaced with green energy."

Premier McGuinty appears to agree that the focus should be green energy. The Star reports that the Premier is asking Ottawa to provide more funding for green energy. This funding should complement the funding being provided for carbon capture and sequestration, said McGuinty. "I'm not going to pass judgment on the merit of the science associated with carbon sequestration. But what I am going to say is if the federal government chooses to support that kind of research, we'd like them to provide comparable levels of financial support for things that we know in fact work."

Implications

In Ontario, the nuclear question is therefore intimately tied to policy considerations regarding green energy and climate change. The McGuinty government characterizes its Green Energy Act in many ways as a climate change initiative, particularly because it will allow the province to eliminate coal fired generation. A diminishing supply of nuclear power could mean a growing demand for renewables. However, nuclear baseload generation will likely continue to be essential to the stability and reliability of supply in the province.

Both nuclear and green energy policy will also have significant economic implications. New nuclear construction and refurbishment as well as Ontario's generous renewable Feed-in Tariff rates will result in higher electricity bills in the province. However, those costs may be outweighed by the economic benefits of creating new jobs in the province. While nuclear projects would certainly employ a number of people, the province's Green Energy Act is intended to create 50,000 green collar jobs.

The challenge for the province will therefore be to balance its nuclear and green energy policies so as to achieve a reliable supply of power that minimizes greenhouse gases and has a net economic benefit for the province.

In so doing, the province should not lose sight of what is happening south of the border. A successful nuclear renaissance in the US could drain Ontario of most of its nuclear expertise. A successful climate change bill would also have significant repercussions for the province, which could be very positive if the province successfully becomes a green and cleantech centre of excellence.

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BC's Speech from the Throne calls for "Future Powered by Clean Energy"

Wed, 10 Feb 2010 16:36:00 EST

Submitted by Grant Boyle

On February 9th BC delivered its Speech from the Throneand continued its rhetorical push to promote renewable energy in the province. Two interesting developments to watch will be the release of the work of the Green Energy Advisory Task Forceand the development of a Clean Energy Act.Below are some excerpted highlights from the speech:

Clean energy is this century's greenfield of opportunity.

British Columbia is blessed with enormous untapped energy potential.

We can harness that potential to generate new wealth and new jobs in our communities while we lower greenhouse gas emissions within and beyond our borders.

Clean energy is a cornerstone of our Climate Action Plan to reduce greenhouse gas emissions by one

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Vestas to invest in Ontario?

Tue, 09 Feb 2010 09:37:00 EST

The Toronto Star is reporting that Danish wind turbine giant Vestas may be considering establishing manufacturing facilities in Ontario. Vestas representatives are rumoured to have scouted Hamilton, Niagara, Kingston and Belleville last week as potential locations. Vestas has already selected Toronto as its North American headquarters for onshore and offshore wind sales.

Vestas' decision will no doubt be heavily informed by the demand for its turbine under Ontario's new Feed-in Tariff ("FIT") program. Many developers have likely already negotiated deals with Vestas that are contingent on the developers winning FIT contracts. The OPA is expected to beginning awarding FIT contracts in late February.

By opening shop in Ontario, Vestas will be well-positioned to serve both the Ontario markets and markets south of the border, particularly for offshore wind. In addition to Ontario, New York, Ohio, Wisconsin and Michigan are all considering developing wind farms in the Great Lakes. States along the eastern seaboard may also look offshore for renewable power.

An investment by Vestas would be another big win for the Ontario government. Last month, the government announced a $7 billion deal green energy deal with Samsung. While both deals would help transition Ontario to an economy powered by green energy, many observers would like to see more "home grown" successes under the Green Energy Act.

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Ontario MOE issues guide to renewable energy approvals

Thu, 28 Jan 2010 14:09:00 EST

The Ontario Ministry of the Environment has issued a comprehensive guide to navigating the provincial approval process for renewable energy projects. The guide is intended to help project proponents understand the process and requirements for applying for a renewable energy approval ("REA") under the Environmental Protection Act (Ontario). It includes:

* an overview of the approvals process;

* a discussion of consultation requirements;

* requirements regarding the protection of cultural heritage and the natural environment; and

* specific requirements for wind, solar, bio-energy and waterpower facilities.

The MOE has also published separate guidance to help wind farm developers comply with new noise setback requirements.

More information about the REA process may be found on the MOE's website.

The MOE is rumoured to be planning to issue its first REA by March 31, 2010.

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Quebec Northern Plan "Plan Nord" - Stakeholders hold initial Partners' Discussion Table

Wed, 27 Jan 2010 19:10:00 EST

The Government of Quebec yesterday took a concrete step in its plan to develop the province's vast resources situated North of the 49th parallel by holding the first meeting of the Partners' Discussion Table. The sustainable resource development initiative known as the "Plan Nord" or "Northern Plan", is a broad-based joint action process to lay the foundation for a new partnership with communities in the North and covers an area of over one million square kilometres (1,000,000 km2). The Northern Plan had previously been announced by the Quebec Liberal Party as part of an ambitious 2008 electoral campaign platform, but has gained momentum of late following consensus-building at a gathering of Northern Plan stakeholders in early November 2009 (the "Northern Plan Stakeholders Summit").

The Partners' Discussion Table was attended by Quebec's Deputy Premier, Minister of Natural Resources and Wildlife and Minister responsible for the Northern Plan, Ms. Nathalie Normandeau. Joining her were Mr. Pierre Corbeil, Minister responsible for Aboriginal Affairs, Mr. Serge Simard, Delegate Minister of Natural Resources and Wildlife and Ms. Line Beauchamp, Minister of Sustainable Development, Environment and Parks, as well as twenty-seven (27) representatives from Municipalities, Aboriginal Nations, Economic and Environmental Organizations, Educational and Research Organizations and Government Departments and Agencies concerned by the project.

The Partners' Discussion Table is to focus on obtaining community support for a shared vision for the Northern Plan, to define a work process and to determine priorities for the Plan's implementation in the economic and social spheres.

The Northern Plan Stakeholders Summit had also established a second, distinct, Aboriginal Partners' Discussion Table, which is to be subdivided into four separate tables, one for each of the Cree, Innu, Inuit and Naskapi Nations and whose task will be to deal with the Aboriginal issues raised by the Northern Plan, in a manner consistent with agreements that have been signed or are being negotiated.

Of the Partners' Discussion Table, Minister Normandeau was quoted as saying (translation): "We share a common vision, that is to make of the Northern Plan an exemplary sustainable development project which integrates the development of the energy, mining, forestry, agrifood, tourism and transportation industries, while protecting wildlife and the environment, as well as conserving biodiversity. The Northern Plan will encourage community development, while respecting community culture and identity."

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Ontario Premier McGuinty signs renewable power deal with Samsung-led consortium

Thu, 21 Jan 2010 12:26:00 EST

The details are out. Premier Dalton McGuinty announced today that he has signed an agreement with a consortium led by Samsung C&T Corporation and the Korea Electric Power Corporation that will invest $7 billion in Ontario and will generate 2,500 megawatts of wind and solar power.

While a copy of the deal does not yet appear to be public, a government backgrounder identifies some of the highlights:

* the consortium will build 2,500 MW of renewable generating facilities in Ontario: 2,000 MW of wind farms and 500 MW of solar (based on capacity allocation reserves ordered by former Minister Smitherman, the bulk of these projects will likely be in Southwestern Ontario);

* some of these facilities will be connected to new or upgraded transmission assets, which helps to justify the $2.3 billion that Hydro One previously announced it would spend on grid upgrades;

* the consortium has agreed to build 4 new manufacturing facilities in the province, one for each of the following types of component: wind turbine towers (to be in full operation by March 31, 2013); solar inverters (March 31, 2013); solar module assembly (December 31, 2013); and wind turbine blades (December 31, 2015);

* if the consortium meets the above deadlines, its wind and power projects will become eligible for an undisclosed "economic development adder" ("EDA"), which is a premium on the already premium per-kilowatt-hour FIT prices. The total cost of the economic development adder over the 20-year lives of the wind and solar farms is projected to be $437 million (net present value);

* the four new plants are expected to employ 1,440 people directly and to result in another 700 direct jobs at parts plants (not owned by the consortium);

* the government expects that these 2,140 direct jobs will result in an explosion of indirect green collar jobs (presumably including engineering, technical, construction, maintenance, financial, legal, consulting, and other types of related jobs). The government pegs the total job growth at 16,000 over six years, although it has yet to elaborate on its calculations (or explain what portion of those jobs will be counted towards its "50,000 green collar jobs in 3 years" promise).

Samsung is obviously pleased with the deal. According to the Toronto Star, Sung-Ha Chi, president and CEO of Samsung, praised McGuinty "for creating a welcoming climate for green energy investment." The Premier's new Minister of Energy and Infrastructure called the deal "a huge achievement for Ontario" and highlighted that "these projects will help clean up our air and replace dirty, coal-fired generation as well as bring more green-collar jobs to communities across the province."

However the deal has attracted significant controversy, particularly over the last 24 hours. Others in the industry are upset that Samsung is getting a special deal in what was supposed to be a level playing field for renewable power developers in the province. The "economic development adder" will certainly provide the consortium with an additional stream of revenue (that can be further leveraged) that other developers will not enjoy.

Ratepayers are also concerned that the Samsung deal will drive their electricity bills up even higher. The government estimates that the economic development adder will result in an average residential bill increase of $1.60 annually (or 0.1%). While this may appear minor, it is only part of a larger increase that will be driven by the OPA's Feed-in Tariff program and the substantial investment by transmitters and local distribution companies in grid modernization (starting with Hydro One's $2.3 billion investment, mentioned above).

According to the CBC, noted energy observer Tom Adams calls the government's job projections a "crazy fantasy." Opposition parties are expected to call on the province's auditor general to review the value of the deal for Ontario taxpayers.

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Quebec and New Brunswick conclude Energy Agreement negotiations

Wed, 20 Jan 2010 14:17:00 EST

Premiers Shawn Graham and Jean Charest today announced the conclusion of negotiations on an energy agreement between the provinces of New Brunswick and Quebec. This concludes the discussions undertaken by the governments of Quebec and New Brunswick in early 2009, which resulted in the signature of a memorandum of understanding (MOU) on October 29, 2009.

Under the agreement's framework, New Brunswickers are to benefit from advantageous electricity rates, a significant reduction in provincial debt and a secure, long-term source of electricity, while retaining responsibility for its energy strategy and implementation. Hydro-Quebec will acquire Power Generation Assets as well as Firm Transmission Rights and will commit to a long-term power supply contract.

Summary of Agreement between the governments of Quebec (QC) and New Brunswick (NB):

NB Power Assets acquired by Hydro-Quebec:

The following Generation Assets:

* The seven (7) hydroelectric generating facilities (895 MW);

* The two (2) diesel peaking units on the main grid (499 MW);

* The Point Lepreau nuclear power plant (635 MW), once the refurbishment completed, expected on or about January 1, 2011.

* Firm Transmission Rights associated with the acquired Generation Assets, including 670 MW of transmission rights with New England.

Supply of electricity to NB Power by Hydro-Quebec:

Hydro-Quebec will act as a wholesaler for NB Power under a long term power contract, Hydro-Quebec will provide NB Power 14 TWh of electricity per year. For the first five (5) years, that supply will be provided at a price of 7.35 cents per kWh, after which the price will be adjusted according to the New Brunswick Consumer Price Index (CPI).

New Brunswick to administer "Heritage Supply" of electricity in the following manner:

Two Energy Pools will be created: one of 4.5 TWh for Industrial Customers and one of 9.5 TWh for Residential, Commercial and Wholesale Customers;

Industrial Rates will be set immediately after the closing at a level that will result in rate reductions averaging 23% for Large Industrial Customers using more than 5,000 kW per month and averaging 15% for Large Industrial Customers using between 750 kW and 5,000 kW per month;

On the first (1st), second (2nd), third (3rd) and fourth (4th) anniversaries of the closing date, Industrial Rates will be adjusted in accordance with increases, if any, of Hydro-Quebec's "L" and "M" rates;

Residential, Commercial and Wholesale Rates will be frozen for five (5) years at the levels currently in effect in New Brunswick;

All New Brunswick electricity needs beyond those included in these Heritage Supply Pools will be met through calls for tenders at market conditions approved by the New Brunswick Energy and Utilities Board.

NB Power Employees:

At the time of closing, Hydro-Quebec will offer employment to the employees of the NB Power facilities purchased and will respect existing collective agreements.

Employees transferring to Hydro-Quebec will continue to receive pensions provided by New Brunswick's public sector pension plan, and Hydro-Quebec will reimburse New Brunswick for the cost of those benefits accrued following the closing.

Consideration:

Hydro-Quebec will make two payments totalling $3.2 billion; the first ($1.8 billion) on or about March 31, 2010, and the second ($1.4 billion) at the time of closing of the Point Lepreau transaction, expected on or about January 1, 2011.

Assets not acquired by Hydro-Quebec:

NB Power will retain the ownership of the Transmission and Distribution Assets and of NB Power's head office, or "Holdco".

NB Power will retain ownership of the following assets and operate them for the benefit of Hydro-Quebec under the framework of Tolling Agreements*:

* Belledune generating facility (coal, 458 MW);

* Coleson Cove generating facility (oil, 978 MW);

Hydro-Quebec has the option to request the shut down of these two facilities upon one (1) year's notice and by paying NB Power the equivalent of twelve (12) months of fixed costs of the facilities.

* Tolling Agreement: An agreement by which a party agrees to acquire the fuel for the operation of a generating facility owned by another party, thereby acquiring the exclusive rights to determine and purchase the related energy production. Such an agreement usually includes provisions to cover fixed operating costs.

NB Power will retain the following assets, which are deemed surplus facilities:

* Grand Lake generating facility (coal);

* Dalhousie generating facility (oil);

* Courtenay Bay generating facility (oil).

NB Power is also to retain the Grand Manan autonomous facility, located on the island of the same name.

Closing of the transaction

On or about March 31, 2010 and expected on or about January 1, 2011 for Point Lepreau.

Closing conditions for the Point Lepreau transaction:

* Completion of the refurbishment project currently under way;

* Restart of the facility following successful testing;

* Issuance of the necessary permits and authorizations prior to the restart and acquisition of the facility.

Touting the benefits of the agreement, Premier Graham declared: "Our partnership with Quebec will secure lower energy costs for our province, leave NB Power as a New Brunswick-owned entity, and reaffirm our province's control over decisions affecting energy policy," "We are proud of a partnership that allows us to create jobs and a better economic future for New Brunswick, and to do our part in reducing greenhouse gases."

Expressing the benefits to the province of Quebec, Premier Charest commented "In a world where access to clean renewable energy sources is an issue, where energy needs are strong and continue to grow, Quebec and New Brunswick are leading the way. The changes we are announcing today, along with firm transmission rights to New England, allow us to achieve the goals set out in the agreement reached with New Brunswick," "Hydro-Quebec will acquire quality assets allowing it to maximize its export capacity, while New Brunswickers will benefit from a reliable source of energy with important economic and environmental benefits,"

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Ontario to announce $7 billion renewable power deal with Samsung tomorrow

Wed, 20 Jan 2010 09:43:00 EST

Ontario Premier McGuinty is expected to announce a huge renewable power deal with Koren industrial giant Samsung tomorrow. The deal would see Samsung make substantial investments in the renewable power manufacturing facilities and projects and could create up to 15,000 direct and indirect green collar jobs in the province. Worth an estimated $7 billion, the deal will nevertheless continue to evoke mixed reaction in the province. It is also the latest volley in a battle between Ontario and B.C. to become the go-to jurisdiction for clean energy investment.

While the official announcement will come tomorrow, the existence of the negotiations has been one of the government's worst kept secrets (we first reported on it last November on our climate change law blog). According to the Toronto Star, Samsung will agree to build significant renewable equipment manufacturing capacity and to construct 600 MW of wind and solar farms in the province (perhaps making Samsung its own best customer). That scale of project development estimate aligns closely with the 500 MW of grid capacity that former Minister Smitherman ordered the Ontario Power Authority to hold in reserve at the end of last September. In the same directive, he specifically ordered that 100 MW of the 500 MW limit on utility-scale solar development be held in reserve as well. These special directives, combined with generous subsidies and access to the province's new feed-in tariff rates for power, would appear to make for a very sweet deal for Samsung.

However, not everyone in the province is enamoured with the deal. Other project developers in the sector do not understand why Samsung is receiving preferential treatment. David Butters, president of the Association of Power Producers of Ontario, told the Star that his organization feels the deal is "just fundamentally wrong at every level of public policy we can think of. The industry feels they've been thrown under the bus here. I think there's a feeling of betrayal." In a letter to the Premier, the Canadian Wind Energy Association and Canadian Solar Industries Association added "[b]esides the financial and political uncertainty this creates, it puts one company in a vastly better position than all others: this is manifestly unfair."

Nevertheless, the deal is no doubt very attractive to the government. Generally, it could help revive a manufacturing sector that has been decimated by the recent financial crisis and the struggles of the auto sector. More specifically, it could move the government 15,000 jobs closer to its commitment of creating 50,000 green collar jobs through the reforms of the Green Energy Act.

This latter achievement would be a very significant one for Ontario. As discussed in today's Globe and Mail, Ontario is competing with British Columbia to become the renewable energy hub of Canada. Even before the Samsung deal, at least one prominent renewable developer told the Globe that "Ontario is probably the hottest market in Canada." Blair Lekstrom, B.C.'s Energy Minister, believes that his province may reclaim the lead: "I look at the clean energy sector as the oil and gas sector of the future," he told the Globe. "We are going to take British Columbia and become a green-energy powerhouse, not just in Canada, but in North America." Regardless of the who wins, the competition will no doubt produce big wins, both for both provinces and for the renewable power industry.

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Important note regarding Davis LLP's Climate Change Law blog

Wed, 20 Jan 2010 09:13:00 EST

As you hopefully already know, Davis LLP maintains a number of blogs of interest to the Canadian legal and business communities. In the past, we have provided extensive coverage of developments regarding renewable energy on our Climate Change Law blog (see here for all of our prior postings). Beginning today, such developments will be tracked here on the Environmental, Energy and Resources Law blog. Climate change issues, including those regarding greenhouse gas regulation in Canada and the U.S., emissions trading, climate change disclosure, and post-Copenhagen developments abroad, will continue to be covered on our Climate Change Law blog.

We hope this change will help make each of our blogs more specific and relevant to you.

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British Columbia Aboriginal Mine Training Partnership Launched

Tue, 19 Jan 2010 12:00:00 EST

Today, First Nations communities and organizations, the mineral exploration and mining industry and educational and government partners announced the formation of a minerals and mining specific Aboriginal Skills and Employment Partnership (ASEP) to run a three-year program providing skills training in the northwest and central interior regions of British Columbia. The program will be administered by the British Columbia Aboriginal Mine Training Association in conjunction with fifteen partners, six of which have made employment commitments of 148 jobs for Aboriginal participants.

The British Columbia Aboriginal Mine Training Association and its partners will provide training-to-employment plans that cover a broad range of opportunities including: academic upgrading, job specific training and apprenticeships, retention counselling and other on the job support.

Laureen Whyte, Chair of the British Columbia Aboriginal Mine Training Association, declared: "The partners are committed to ensuring that Aboriginal people fully share in economic opportunities created by the mineral exploration and mining industry. Through this partnership, Aboriginal people in British Columbia will have access to skills training to participate in the exploration and mining industry, and industry will benefit from accessing a quality pool of workers,"

The mining specific Aboriginal skills and employment partnership is the result of collaborations between fifteen partners, who will be sharing the cost of investment funding. The 30-month program will cost a total of $27.1 million dollars, with Human Resources and Skills Development Canada contributing $4.4 million dollars to the program and private contributions from Industry and Associations accounting for $22.7 million dollars.

"This initiative helps provide the skills needed for Aboriginal people to fully participate in the mineral exploration and mining sectors and to look forward to the benefits of well-paying jobs and a better future," says Eddy Jules, Vice Chair of the British Columbia Aboriginal Mine Training Association and Councilor of the Skeetchestn Indian Band. "Our vision is that, with specialized training and experience, companies will benefit from the professional and traditional knowledge that can be drawn from the surrounding communities where they operate. We will be able to work together with full participation of our people," says Jules.

ASEP is a labour market program that provides Aboriginal people with the skills development and work experience they need to participate in large-scale industrial sectors including forestry, mining, and gas, construction and hydro electric development. Human Resources and Skills Development Canada provides federal funding to the partnerships.

The BC Aboriginal Mine Training Association has also released a Fact Sheet containing more detailed information on the program.

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BC Government Embarks on Phase 2 of its Water Act Modernization Process

Thu, 14 Jan 2010 21:18:00 EST

The BC government has officially embarked on a process of modernizing the provincial Water Act. The existing Act was brought into force in 1909 and is the primary legislation in BC's water governance framework for regulating the diversion, storage and use of water resources and managing water quality.

The latest changes came into effect in 2004 in response to growing public concern over the protection of drinking water quality, following the drinking water tragedy in 2000 in Walkerton, Ont. Changes included a new Drinking Water Protection Act and, amendments to the Water Act to protect groundwater and water quality and, to provide a new process for watershed management planning.

The modernization process is expected to assist the Province in fulfilling its (year 2010) committments established under the Living Water Smart: B.C's Water Plan by:

* Protecting stream health and aquatic environments;

* Improving water governace arrangements;

* Introducing more flexibility and efficiency in the water allocation system; and,

* Regulating groundwater use in priority areas and for large groundwater withdrawals.

The process will be completed in four key Phases, as follows, ending with the introduction and approval of a draft Bill by Spring 2011:

Phase 1 - Scoping, jurisdictional review and background research (complete). In this stage wide input on water management issues was gained through a review of science and monitoring information regarding B.C.'s watersheds, a review of literature, and Canadian and international best practices.

Phase 2 - Engagement and policy development (Fall 2009 - Spring 2010). In this phase, proposals for change will be put forward in a public discussion paper for wider input from First Nations, stakeholders and the public. Participants will have a range of avenues to become involved including regional workshops, online discussions through the Living Water Smart Blog and written submissions. Government will report back the results of engagement and undertake a full assessment of costs and benefits, and regulatory and social impacts of recommended policy options.

Phase 3 - Request for legislation and legislative drafting (Summer 2010). Final recommendations will be submitted to government and will be drafted into a legal language for introduction into Parliament.

Phase 4 - Bill introduction (Spring 2011) and approval. After the draft bill is introduced into the Parliament it is debated three times and if approved gets Royal Assent and becomes law.

The government is currenlty undertaking Phase 2 of the process and is expected to release a discussion paper for public review and comment in the coming weeks.

Click here for a list of some of the current and future challenges for the Water Act.

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GE urges Ottawa to extend ecoENERGY program

Thu, 14 Jan 2010 13:54:00 EST

"Canada's ecoENERGY Investment in Renewables Pays Off for Taxpayers," declares a new study released by GE Energy Financial Services this week. The study urges the federal government to renew the popular ecoENERGY for Renewable Power program. Not only is the program effective at reducing greenhouse gas emissions, but it also is a net money-maker for the government.

The ecoENERGY for Renewable Power program provides a one cent per kilowatt-hour subsidy for the first 10 years of operation for eligible renewable energy projects. The program, which was launched in 2007, has been extraordinarily popular: 10,924 megawatts of projects have registered to receive funds; 4,154 megawatts of projects have been approved for funding.

This response has been so strong that the program is now in limbo, having fully allocated virtually all of its $1.5 billion of funding. The government stopped accepting new applications in December 2009. The renewable power industry has been waiting with bated breath for an announcement from Ottawa that the program's coffers will be topped up.

The GE study strongly encourages the government to renew the program. Having prepared financial models of the program, GE determined that the government will receive more back in the form of incremental tax revenue that it pays out under the program. Specifically, the study estimated that injecting an additional $1.5 billion into the ecoENERGY for Renewable Power program could spawn 5.2 gigawatts of new wind projects and carry a net present value benefit to Canada's governments of $287 million.

In a press release that accompanied the report, Mark Tonner, Managing Director for Canada at GE Energy Financial Services, noted, "Canadians want to be leaders in green energy. It's high on the social agenda as the right thing to do. In Canada, the ecoENERGY initiative has been effective in stimulating renewable energy deployment, and as our study shows, it's time to view the program not as a cost but a net contributor to Canada's treasury. EcoENERGY helps Canada compete globally for renewable energy investment, at a time when such competition is becoming more intense."

GE's enthusiasm for the program is no doubt influenced by the fact that GE is a supplier of turbines to several Canadian wind farms.

GE and the rest of the renewable industry will learn the fate of the ecoENRGY for Renewable Power program when the federal government releases its 2010 budget (which is expected to occur on March 4, almost immediately after Parliament resumes, having been controversially prorogued by Prime Minister Harper at the end of 2009).

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