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NAFTA beef filed over Ontario’s green energy efforts

The US-based Mesa Power Group LLC is taking legal action against the Canadian government for what it claims to be violations of the North American Free Trade Agreement (NAFTA) as it pursued 565 megawatts of wind energy projects in western Ontario.


July 14, 2011
by PLANT STAFF

DALLAS: The US-based Mesa Power Group LLC is taking legal action against the Canadian government for what it claims to be violations of the North American Free Trade Agreement (NAFTA) as it pursued 565 megawatts of wind energy projects in western Ontario.

The Dallas company, a developer of renewable energy projects in North America, has initiated the first step in a legal claim over Ontario’s Green Energy Act and Feed-In Tariff (FIT) program, citing “unanticipated and last-minute rule changes” to the Ontario Power Authority process that allowed wind projects to move from one region to another and interconnect with long, high voltage transmission lines.

It also takes issue with the $7 billion Samsung deal that allows the South Korean industrial giant to build 2,500 megawatts of renewable energy generation.

Samsung gets about 20% of the transmission capacity in phase 1 of its agreement, and priority access to another 2,000 megawatts of transmission in subsequent phases of its contract.

“This clear favouritism disadvantaged Mesa, as well as other wind developers and clearly violates the spirit, goals and objectives of the North American Free Trade Agreement,” said Cole Robertson, a company executive.

Mesa Power identified the following issues in its claim, including the Ontario government directing Ontario Power Authority to change the rules for awarding power purchase agreements under the FIT Program, setting Canadian and Ontario buy local requirements and providing more favourable treatment to a non-NAFTA party “in like circumstances.”

Robertson said Mesa Power’s first two projects have completed their environmental studies, have a favourable position on the existing transmission infrastructure and can be in operation by the end of next year.

He said there’s also a firm agreement to purchase wind turbines from a leading manufacturer.

“These two strategic relationships would have quickly created jobs within the province. Other projects that received contracts under the disputed rules will take years to complete and will require extensive planning of new, expensive and unnecessarily long transmission lines,” he said in a statement.

Mesa Power will file a formal NAFTA Notice of Arbitration after Oct. 3 that will formally begin an international arbitration process to review the Canadian government’s actions.

Related coverage: Increase bilateral trade between NAFTA countries: CME