[Thunder Bay power plant] Gas conversion on hold – by Kris Ketonen (Thunder Bay Chronicle-Journal – November 3, 2012)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

The fate of the city’s OPG power plant will be clearer in a few months, the province’s minister of energy assured Friday.
Regional representatives were caught off-guard Thursday when the provincial government announced a hold on its plan to convert the plant so that it runs on natural gas instead of coal.

The Ontario Power Authority (OPA) — which is in charge of Ontario’s long-term power system planning — believes the loss in power generation could be made up elsewhere, and mothballing the local plant would save taxpayers up to $400 million (that number was highly disputed on Friday, however).

“If the plans will provide those power needs and save money, then we’ll take a look at them,” Ontario Energy Minister Chris Bentley said in an interview Friday. “If they won’t, then the conversion is back on.

“Look, anytime anybody tells me they can do something and save up to $400 million, they’ve got my attention. But right now, I’m at the ‘show me’ stage, and that’s why we’re waiting for the more-detailed approach and plan.”

Bentley said he expects the OPA to develop its plans over the “next several months,” and the region’s generating needs are being met at the moment.

Still, while Thursday’s announcement doesn’t mean the conversion project is scrapped altogether, the news still came as a shock and a disappointment to the region as time ticks down to the provincially-imposed 2014 deadline to stop generating power via coal.

“OPA has made a horrible mistake here, and I’d really like to see their analysis and their study,” Thunder Bay Mayor Keith Hobbs said Friday. “I think there’s something that we’re missing here.

“We’re totally caught off-guard, for sure,” he said. “We’re getting mixed-messages here. OPA are saying they’re going to mothball it, (Bentley) is saying we still have a chance, but show me the $400 million.

“I want to see that $400 million in savings as well.”

Hobbs said the power plant has become “the biggest issue” Thunder Bay has faced in years.

“We have sent the message that Thunder Bay is open for business,” he said. “The energy needs, just for the mining alone, is predicted at about 671 megawatts of power. I don’t think OPA even knows that; I don’t think OPA even knows where Thunder Bay is, to tell you the truth.”

The OPA said, however, that power can be generated elsewhere.

The plant, as Thunder Bay-Atikokan MPP Bill Mauro put it, is a victim of the government’s other energy successes, specifically the in-the-works upgrade to east-west energy tieline, a 400-kilometre transmission line that will move power between Northern and southern Ontario.

“All of the municipal leaders in Northwestern Ontario wanted to see an upgrade,” Mauro said.

They’re getting that upgrade; the capacity of the line is essentially being doubled, he said.

“That’s one reason the OPA is saying ‘listen, you don’t need (the Thunder Bay plant) now,’” Mauro said.

In addition, the 78-megawatt Little Jackfish hydroelectric project — located north of Lake Nipigon — is going ahead, he said.

“The east-west tieline, even if a shovel went into the ground tomorrow, would not be completed for at least four, five years,” Mauro said.

MINING NEEDS POWER

Data provided by the city on Friday, however, indicated the overall power demand for post-2016 Northern Ontario — the mining sector is expected to need a few more years, at least, before it really takes off — will be in excess of 1,300 megawatts. With a converted power plant, the region will be able to supply that power, with help from the south via the east-west tieline.

If the plant conversion is cancelled, however, that city data shows a power shortfall of more than 400 megawatts, even more if there’s a drought and the hydro stations aren’t working at capacity.

“We’ll be okay for a couple of years, as long as the Thunder Bay (generating station) continues to operate,” Coun. Iain Angus said Friday. “But what happens after Dec. 31, 2014, when we’re no longer allowed, by law, to use coal?
“That’s 304 (megawatts) off the grid.”

John Mason, who handles the mining portfolio for the city’s Community Economic Development Commission, said the five producing mines in the region are adding diesel generators to help power their operations due to power concerns.
“You’re going to burn dirty diesel to produce power?” Mason said.

Meanwhile, there are a further nine mining operations getting very close to actual production.

“In places like Red Lake, the entire community as well as the Red Lake mine and the Musselwhite mine, you have a shortage of power,” Mason said. “It’s not just a transmission issue. It’s also a generation issue.

“That’s before them right now, so that’s part of the mix here, as well.”

Ron Nelson, president of the Northwestern Ontario Municipal Association and mayor of O’Connor Township, said the region may, in fact, only have weeks to fight for the plant, despite what Bentley said.

The Liberals are in the midst of a leadership race, he noted (Premier Dalton McGuinty recently announced he’s stepping down), “so we have to deal with that issue.

“Usually what happens is that once a new leader is in place, there is a cabinet shuffle,” Nelson said.

Bentley is already being slightly shuffled. McGuinty said recently Bentley’s job will be expanded, and he’ll serve the dual role of energy and aboriginal affairs ministers.

Bentley has also announced he won’t be seeking re-election when the current term is up.

Mauro has talked to Bentley about the whole thing, and Mauro said the minister is “completely aware of my dissatisfaction with this decision.

“He is completely aware that my effort will be to continue to see this plant converted. He’s aware that I believe that the OPA has got this completely wrong, and that they are not contemplating our energy needs far enough into the future, given what we all believe may happen here in regards to the mining industry.

“It isn’t just the Ring of Fire. This is a whole bunch of mines that are likely to come on-stream even before the Ring of Fire.”

MPP Michael Gravelle — who holds the Thunder Bay-Superior North riding for the Liberals — said he was “very disappointed” when he heard the plant conversion was being put on hold.

“This is not what we expected,” he said. “Bill and I have worked extremely hard to get this commitment in place.

“I always accepted the commitment that was made by our government, and the various energy ministers that have been in charge,” Gravelle said. “I was angry. I was angry about it.

“This is vital to the economic future of Thunder Bay and Northwestern Ontario.”

Hobbs said if the conversion project is cancelled, he’ll demand the government pays for the cleanup of the site.
“That’s going to cost a billion dollars,” Hobbs said. “Were are the savings? I’d like to know where they get this ($400 million) figure.”

Gravelle said cleanup costs in themselves are an “overwhelmingly compelling” reason to move forward with conversion.

“The costs involved in the environmentally liability are enormous,” he said. “I don’t think it makes sense from an Ontario Power Generation point of view, it certainly doesn’t make sense from an Ontario government point of view.”

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