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Independent power producers irked by plan to purchase Manitoba's hydro.

Ontario Hydro will be exporting jobs to Manitoba by following through with its plan to purchase power from that province, charges Bruce Ander.

Ander is president of the Independent Power Producers' Society of Ontario (IPPSO). It has joined the North Shore Tribal Council of Cutler and a coalition of environmental groups opposing the construction of hydro lines from Manitoba through Northern Ontario.

"The Manitoba deal is in deep trouble," Ander charges. "Hydro admits that it costs more than it's worth."

However, Ontario Hydro president Allan Holt says the deal is necessary in order to diversity the utility's power base.

"If a plant is broken down in one province, you can import (power) from another province," Holt explains.

Meanwhile, non-utility power generation, once touted by Ontario Hydro as "a win-win situation" with the private sector, has been put on the back burner.

In 1990 Hydro unveiled a 25-year strategy which identified the need for private generation stations to bring the province's supply of electricity in line with future demand.

Last year the utility set the target of a six-per-cent increase in independent power production by the year 2000, but Holt says that target may not be reached.

"There's been a real slowdown in the load (customer demand), and we may have to adjust those plans," he says.

"We plan to add non-utility generation to our system as we need to."

The trouble is, the need does not exist because Hydro has a surplus of electricity and is embarking on a $6-billion "demand management" program which is designed to reduce consumption by 5,200 megawatts by the year 2000.

In addition, Hydro plans to purchase a substantial amount of electricity from Manitoba beginning that same year.

That spells bad news for several Northern Ontario municipalities that were looking to power generation as a means of economic diversification, says Ander.

"Hydro has reneged on the spirit of what they said, particularly on the smaller and more interesting (independent power) projects," he charges.

Hydro announced in February that it had terminated approvals for 40 private generation projects, including ones for Sudbury and Wawa. Approvals for 13 additional proposals, including ones for Atikokan, Blind River, Hearst, Elliot Lake and Iroquois Falls, were deferred.

Holt says the 13 are being downsized and renegotiated with Ontario Hydro. He does not expect that there will be additional project approvals granted in the near future.

The loss of benefits that these projects represent for Northern Ontario is substantial, according to James Temerty, the president of Northland Power.

LONG WAIT

Temerty has been waiting since last year for Hydro approvals to proceed with cogeneration projects in Elliot Lake and Iroquois Falls. Northland Power has developed plants in Cochrane and Kirkland Lake.

Temerty says the $200-million Iroquois Falls project, for example, would employ 300 people during its two-year construction phase, and create about 50 full-time jobs during its 40-year contract.

"These are long-term, high-quality jobs," he adds.

Local sawmills would benefit too, because they would supply the waste wood to run the plant.

Temerty says cogeneration plants are environmentally beneficial, producing no greenhouse gas and very little pollution in their effluent.

The Toronto-based Energy Probe Foundation has been pushing for years to reintroduce a competitive private power network in Ontario.

Hydro's corporate direction has been strongly criticized in recent years by Energy Probe's Larry Solomon, who wants the giant utility dismantled.

Solomon calculates that Ontario businesses pay 60-per-cent more for electricity than do their counterparts in other provinces.

Hydro has applied for an 11.8-per-cent rate increase for 1993, following an 8.6-per-cent increase this year.

Despite the increases, Hydro is expected to dip into its reserves next year, for the fourth year in a row.
COPYRIGHT 1992 Laurentian Business Publishing, Inc.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Energy/Environment Report; Independent Power producers' Society of Ontario
Author:Pearsall, Kathryn
Publication:Northern Ontario Business
Date:Jul 1, 1992
Words:615
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