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Timmins backs power proposal.

The City of Timmins is throwing its political muscle behind a private partnership that is putting pressure on Ontario Power Generation to allow hydroelectric development on the Mattagami River.

The city was lobbied by Tembec, one of the four partners in the initiative, to show support for developing the facilities. The plan would see the conversion and modernization of four hydroelectric dams on the river, rather than the flooding of new areas.

The partners involved thus far are Tembec, Moose Cree First Nation and SNC Lavalin, an engineering consulting firm.

According to Tembec, the partnership was formed because of the expertise all of the partners bring to the project and the fact that they have worked together previously. Tembec also says it potentially could be a consumer of energy that would eventually come from the dam.

At present, the dams would provide an additional 384 megawatts of electricity to the provincial grid. Officials with the project say that this amount will double within the first few years of operation.

Timmins Mayor Vic Power says concerns over rising hydro costs were the main driving force behind council's support.

"There is a great need for this project because hydroelectricity is a huge cost to many major industries in our community, like Falconbridge and other local mining companies," he says.

Northern Ontario companies, he says, are also up against competition from Manitoba hydro producers, which produce electricity at a lower cost than in Ontario.

Representatives from Tembec and the other partners were warning the city that failure to act quickly on the deal would result in potentially losing the contract to a supplier in another jurisdiction due to high local price.

City officials are also pleased that the upgrading of the dams will create upwards to 250 construction jobs for local residents. The project will also help Moose Cree First Nation residents and other Far North Aboriginal communities.

"We would be able to see employment opportunities in areas of the province that don't see much employment," says Frank Dottori, president and CEO of Tembec.

The opportunity to contract with the Province of Ontario to produce electricity, however, would not have even been possible without recent government restructuring of the energy sector, say some of the partners. The creation of the Ontario Power Authority (OPA) to oversee the contracting of private suppliers of electricity with the government made it possible for the partners to approach the government with a proposal to produce electricity on the grid. The price of electricity will be more stable, they predict, because private suppliers can enter contracts with the government to produce electricity at a set price for a certain period of time. Banks will find it easier, he says, to lend to private energy suppliers if they know they have secure contracts with the governments, as opposed to selling it on the open market.

Power, meanwhile, intends to continue lobbying of the Ontario government to pressure OPG.

www.tembec.com

www.city.timmins.on.ca

www.moosecree.com

www.opg.com

BY JOSEPH QUESNEL

Northern Ontario Business
COPYRIGHT 2004 Laurentian Business Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Quesnel, Joseph
Publication:Northern Ontario Business
Geographic Code:1CONT
Date:Oct 1, 2004
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