Turbine Opponents Appeal to IESO, US Department of Justice

Jeff Green | Oct 01, 2015

BEARAT (Bon Echo Area Residents Against Turbines) is not exactly waiting patiently to see if contracts are awarded for wind projects in Addington Highlands and North Frontenac.

The group is working with John Laforet, the former president of Wind Concerns Ontario. His company, Broadview Strategy Group, is adept at public affairs advocacy.

On September 1, bids were submitted for the Large Renewable Procurement (LRP) process that was set out by the Independent Electric Service Operator of Ontario (IESO) for up to 300 megawatts of wind power and 140 megawatts of solar power.

A day later, Laforet submitted a detailed brief to the IESO outlining why he thinks that the two companies who submitted bids for projects in North Frontenac and Addington Highlands should be rejected because, in his words, “They do not live up to the mandatory requirements of the LRP. In each case there are deficiencies.”

One of the companies that submitted bids is NextEra Energy.

They submitted two bids, one for a project located in North Frontenac (North Point 1) and the other for a project located in Addington Highlands (North Point 2).

Laforet said that his brief pointed to some issues that are common to both NextEra proposals, including the way they conducted their public meetings,

In particular, Laforet points out that NorthPoint 2, which was originally proposed as a project that would span the two townships and send power to two grid connection points, one in North Frontenac and one near Tweed, was changed a few weeks before the bid deadline. The final project design is located entirely in Addington Highlands and all the power is slated to be transmitted south and west towards Tweed.

“The IESO acknowledges that changing a municipal boundary is a significant change,” said Laforet, “and in order to do that they [the company] were required to hold new public meetings and approach the townships once again as well. But they waited so long that there was no time for them to do that.”

The other company that submitted a bid in Addington Highlands is Renewable Energy Systems (RES).

Laforet said that RES's bid should be disqualified for a few reasons. For one thing, although they identified a range for the locations of their turbines on Crown Land, they “have not identified the specific locations where they are planning to locate the turbines. There is no site plan,” he said.

As well, he said the company has never completed a project of this scale in this type of terrain, which he said violates the 2 to 1 rule in the procurement process. A company has to have 2 megawatts already in production for every 1 megawatt they are planning to build.

Finally - and this is an issue that is central to Laforet's submission regarding NextEra as well – Laforet said, “One of the sections of the LRP is the prohibited communications section. This deals with how the companies are supposed to communicate with the townships. They offered a benefit, in the form of a Community Vibrancy Agreement, which is a payment in exchange for municipal support. This is the first time this has been done as part of a renewable energy project in Ontario, and it is not legal to do so. It clearly amounts to a direct or indirect benefit, which is not permitted.”

In the case of RES and the Township of Addington Highlands, where there was an extra offer of $20,000 on submission of the bid, and $50,000 if the bid is successful, the situation is even more definitive, he said.

The Community Vibrancy Agreements, which include payments of up to $500,000 per year over the 20-year lifespan of the projects, depending on the size of the project that is actually built, are also key to Laforet's second attack on RES and NextEra.

The two companies are wholly owned subsidiaries of US- based companies, and as such are subject to the US regulatory system.

Laforet has submitted a complaint to the US Department of Justice under the Foreign Corrupt Practices Act, alleging that the proposals for vibrancy agreements were made in exchange for municipal support for the projects.

The act says that US companies are prohibited from making "payments to foreign government officials to assist in obtaining or retaining business."

While Laforet said he is not alleging that the township officials will receive personal benefit, “The townships will, and that is enough.”

Both the US Department of Justice and the IESO have acknowledged receipt of the material that Laforet has sent them, but neither has indicated what they are planning to do with the information.

But the actions that have been taken on behalf of BEARAT are being monitored throughout the renewable energy sector in Ontario.

Community Vibrancy Agreements have been discussed in conjunction with municipal support in municipalities across Ontario as part of the LRP process, which is the first time renewable energy projects have had any municipal input in Ontario.

An official with a US-based solar power company, who did not want their name made public, told the News that their company is well aware of the submission to the Department of Justice on behalf of BEARAT and fears it may affect the entire industry.