Liberals pull plug on Oakville power plant; Decision fuels hope Holland Marsh project will also be cancelled

Toronto Star: Rob Ferguson, Robert Benzie and Tanya Talaga - October 8, 2010

The Liberal government's surprise decision to kill a proposed $1.2 billion gas-fired power plant in Oakville is fuelling hopes another controversial energy project in the Holland Marsh will also be unplugged.

In a hastily planned announcement Thursday - designed to save Liberal seats in Oakville and Mississauga in next year's election - Energy Minister Brad Duguid said the 900-megawatt facility, adjacent to the Ford factory and one kilometre from homes and schools, was no longer needed.

"Nor will this plant be moving forward elsewhere in the GTA," Duguid, flanked by relieved Liberal MPPs Kevin Flynn (Oakville) and Charles Sousa (Mississauga South), told a rally near the site.

Duguid said extra power the Oakville area needs in future will come through transmission lines, but wasn't specific on what that would entail.

However, circumstances are "completely different" for a power plant in York region, the minister stressed.

That contentious facility, to be built on a flood plain in a Progressive Conservative riding, is still going ahead.

But Thursday's move is merely the latest energy policy shift from the Liberals, who have put off the construction of new nuclear reactors at Darlington and cancelled plans to slash solar subsidies for farmers generating green power.

After insisting for several years the Oakville plant was necessary because of plans to phase out coal-fired power plants by 2014, Premier Dalton McGuinty's Liberals say the energy outlook has suddenly changed.

"We no longer require this gas plant," said Duguid, denying politics played a part in the decision even though several government sources later confirmed to the Star that sparing the two seats was a major factor.

"It probably could have cost me some votes but not the election," piped in Flynn, who has represented Oakville since 2003.

But the government's climbdown on the plant could cost taxpayers plenty because TransCanada Corp. had a signed contract to have it open by 2014. It's unclear what impact this will have on hydro bills, which are already skyrocketing.

"(The Liberals) will be on the hook for hundreds of millions of dollars for incurred expenses and lost profits," predicted one insider.

Another source said there's a legal opinion that TransCanada could sue the province for $1 billion.

In a statement from its head office in Calgary, the company indicated it's not walking away from the project without compensation.

"TransCanada has been informed that the Ontario Power Authority (OPA) wishes to begin discussions where both sides mutually agree to terminate the contract and discuss reasonable payments TransCanada is entitled to," the firm said.

NDP energy critic Peter Tabuns said the Liberals "have done polling and I think they see themselves as in trouble in Oakville."

Progressive Conservative MPP Ted Chudleigh (Halton) said Oakville residents should be thankful the next provincial vote is just 12 months away.

"If this wasn't an election year, the shovels would be in the ground," he said of the Oct. 6, 2011, vote.

Green Party Leader Mike Schreiner said the Oakville capitulation suggests the 393-megawatt York Energy Centre - set to be built on the environmentally sensitive Holland Marsh in the York-Simcoe riding held by Tory MPP Julia Munro - is also not needed.

"In the same way the site of the Oakville gas plant makes no sense, it is clearly wrong to build a gas plant in King (Township) 400 metres from a school, located on an active flood plain, in the Ansnorveldt wetlands, adjacent to prime farmland in the legislatively protected designated countryside of the Greenbelt," said Schreiner.

Jamie Reaume, executive director of the Holland Marsh Growers' Association, said "if they say that there's no need for it in the Toronto area, why is there the need for it in the north York Region?"

King Township Mayor Margaret Black said "my residents deserve the same respect as the people of Oakville."

But Duguid warned he cannot back down on the Holland Marsh plant.

"The York Energy Centre is a completely different situation. The Independent Electricity System Operator told us unequivocally those residents in that region and those businesses would be at risk of not having enough power if we did not build that plant," he said.

In Oakville, Mayor Rob Burton praised Duguid for listening to local outrage.

"When Brad Duguid became minister (in January), he and I talked that same day and he committed to me he would re-examine the decision ... so, here is a man who kept his word."

Residents opposed to the plant got attention this week when they paid activist Erin Brockovich, who successfully fought a polluting California power company and became the subject of a hit movie where she was played by Julia Roberts, to attend several fundraising events.

Until Thursday, MPP Flynn had broken with his government, siding with residents who formed a coalition called Citizens for Clean Air and introducing a private member's bill to stop the plant.

Oakville's Corina Van Sluytman said "my family and friends will be safer" without the plant.

"It's a crazy idea - to put a gas power plant across from a school. Anyone who likes clean air should celebrate this," said Van Sluytman, who lives 2.5 km from the site.