Energy minister claims 'attitude shift'Ontario energy minister claims private-sector 'attitude shift' to province
CALGARY, Aug 04, 2004 (The Canadian Press via COMTEX) --
There's a "fairly substantial shift in attitude" in the private sector towards Ontario these days, the province's energy minister said Wednesday as he travelled to Alberta looking for investment from some of Canada's largest electricity c
ompanies.
"At the end of the day, you've got 4.3 million hungry meters in Ontario," Dwight Duncan said.
"You've got the largest market in Canada - one of the largest in North America. It's been rife with uncertainty and instability and our whole belief is that the steps we're taking will give those investors the confidence to come back into the market."
Duncan predicted Ontario will be signing deals for large new power plants by January, saying interest is strong from large Canadian and international players.
Over the next 15 years, Canada's most populous province expects to require up to $40 billion worth of investment to replace, build or conserve 25,000 megawatts of power.
Adding urgency is a commitment by Ontario's new Liberal government to replace smog-producing coal-fired power plants - which currently supply 25 per cent of the province's electricity - by 2007.
Many private-sector electricity generation companies - including Calgary-based TransAlta (TSX:TA), TransCanada Corp. (TSX:TRP), Atco Group (TSX:ACO) and St. John's, Nfld.-based Fortis Inc. (TSX:FTS) - already have plants in Ontario.
But they were turned off from making further investments after the province's former Conservative government backtracked from plans to fully privatize the electricity sector, and installed a price cap after electricity prices soared.
Duncan told the Calgary Chamber of Commerce on Wednesday that the price cap cost Ontarians more than $1 billion and scared away "much needed" investment.
Ontario's transformation from a regulated electricity market toward deregulation and then back to partial regulation is also preventing some power from being produced.
TransAlta's new $500-million cogeneration plant in Sarnia, Ont., is running at only one-quarter of its 575-megawatt capacity because it's not worthwhile for the company to produce more power in the capped spot market.
Duncan vowed Wednesday to resolve the TransAlta issue so that the company is "treated properly" and the province can access the extra power.
TransAlta was cautiously optimistic.
"I think right now we're taking the minister at his word; we believe he's an honourable man and so expect to be treated fairly," said Tom Rainwater, executive vice-president of corporate development.
"And when we are, we would look at the next stage, once we've taken care of the Sarnia problem."
In June, Ontario's request for proposals to build 300 new megawatts of renewable energy brought in plans totalling 4,400 megawatts. Most of this is expected to be wind power, but it will also include small hydroelectric, solar and biogas plants.
Ontario also recently issued a much larger call for proposals to build 2,500 megawatts of new capacity from non-coal facilities such as natural gas-fired plants. A technical consultation session in Toronto last month for this request attracted more than 500 interested parties from around the world.
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