Power plant okayed despite protests

TORONTO, ONTARIO - Construction could start by early next summer on a natural-gas-driven power plant east of downtown Toronto, despite opposition from local politicians who say the project amounts to a "re-industrialization" of the city's waterfront.

The 550-megawatt project — less than half the size of the old coal-powered Lakeview generating plant in Mississauga that the province closed last year — got final approval when the Ontario Power Authority signed a 20-year contract with a partnership of Calgary-based TransCanada Corp. and the province's electricity company, Ontario Power Generation Inc.

The $730 million plant, called the Portland Energy Centre, will be built on Unwin Ave. next to the old coal- and gas-fired Hearn generating station, which was mothballed in 1983.

Starting in 2008, the new plant will provide enough power to serve a quarter of central Toronto's needs, TransCanada said.

While details of the contract are not disclosed, Portlands said there is a requirement to make sure that the costs of building the plant are covered.

The plant will be paid the spot market price for electricity, but if revenue exceeds the target, money is withheld — essentially a revenue cap.

Under the deal approved by the province, the plant will begin producing 340 megawatts of electricity on June 1, 2008 in conventional cycle mode using both gas and steam turbines.

Although the plant has been billed as a co-generation facility where the waste heat produced from the burning of gas will run boilers to produce more energy, it won't be ready to function in that mode until early 2009.

Ontario's Liberal government directed the Ontario Power Authority to strike a deal to build the plant after a warning from the independent Electricity System Operator that downtown Toronto could face rolling blackouts by the summer of 2008 unless new power supplies are added.

The Liberals bypassed a competing proposal from a partnership of Toronto Hydro and Baltimore-based Constellation Energy that proposed installing 291 megawatts of gas-fired generators inside the Hearn plant, which would have to be leased from OPG.

Energy Minister Donna Cansfield has said she opted for the Portlands proposal because of the need to get a project completed quickly, and because the Portlands site already has environmental approval.

But Councillor Paula Fletcher, (Ward 30, Toronto-Danforth), said too many details are unknown, including the operating costs.

"This is a deal with real questions," said Fletcher. "This is a plant that is the re-industrialization of the waterfront."

As well, she pointed out that environment approvals are for a co-generation plant, not for a simple gas-fired plant.

Toronto Mayor David Miller said the decision to build the plant is essentially outside the city's juridisction.

"The whole effort of the provincial government and the federal government is to revitalize Toronto's waterfront. It's a huge opportunity for job creation, job growth, green industries. And to build a large power plant next door to another one doesn't make any sense."