Report to: Development Services Committee Report Date:
SUBJECT: Update on OPA’s Local Generation RFP (
PREPARED BY: Jamie Bosomworth, Manager Strategy and Innovation, Development Services Commission
RECOMMENDATION:
That the Report titled “Update on OPA’s Local Generation RFP
(Northern York Region)”, dated
That Markham Council reiterates its support for the OPA’s “Integrated Solution” for power supply to Northern York Region comprised of: Demand Reduction; New Transformer Station capacity; and Local Generation as adopted by Council on September 27, 2005 and further endorsed by Council on April 24, 2007, November 27, 2007 and June 24, 2008;
That the Town of
That this report and resolution be forwarded to the Ontario Power Authority, the Ontario Energy Board, the Ministry of Energy & Infrastructure, the Ministry of the Environment, Hydro One, PowerStream, Region of York, and the Markham – Aurora Hydro One Task Force Members;
That the report and resolution also be forwarded to the Premier of Ontario, the Minister of Energy & Infrastructure, the Minister of the Environment, and Region of York based M.P.P.s,;
That Staff be authorized and directed to do all things necessary to give effect to this resolution.
EXECUTIVE SUMMARY:
In 2005, the Ontario Power Authority (OPA) initiated a comprehensive review of alternative solutions to meet the power supply needs of Northern York Region. As part of this review, the OPA in 2005 established a broadly based Working Group, including representation by citizens, municipalities, public agencies, industry, and energy interest groups. The outcome from the OPA’s 2005 York Region Working Group process was an “Integrated Solution” for electricity supply to Northern York Region. The “Integrated Solution” is comprised of: demand reduction; new transformer station capacity; and local generation. Markham Council has consistently gone on record since 2005 as supporting the OPA’s integrated solution.
Since 2005, the OPA, Hydro One and other stakeholders have implemented demand reduction initiatives and new transformer station capacity in Northern York Region. The OPA in June 2008 initiated a Request for Proposals (RFP) for approximately 350 MW of local generation (peaking plant) to serve Northern York Region.
The OPA is currently reviewing six
proposals for local generation, submitted by four proponents. Three proposals are located in the
Each local municipality noted above as containing a candidate site has passed a resolution indicating they will not be a willing host of a generation facility.
Energy & Infrastructure Minister
George Smitherman has indicated to the Northern York Region and Bradford West
Gwillimbury Mayors that the OPA will continue with their process and announce
the selected proponent and site for a local generation facility in
December. The Minister has also
committed to attending an OPA organized public Town Hall meeting in the
municipality selected in early 2009.
1. Purpose 2. Background 3. Discussion 4. Financial
5. Others (Strategic, Affected Units) 6. Attachment(s)
PURPOSE:
The purpose of this report is to
provide an update to Markham Council on the Ontario Power Authority’s Request
for Proposals (RFP) for a 350 megawatt natural gas-fired simple cycle peaking
generating facility in Northern York Region.
BACKGROUND:
Update on implementing “Integrated Solution”
The outcome of the OPA’s 2005 York Region Working Group process
was an “Integrated Solution” for electricity supply to Northern York Region(NYR). The “Integrated Solution” is comprised of:
demand reduction; new transformer station capacity; and local generation. The installation of upgraded transmission
lines through Markham and Aurora to the Armitage Transformer Station in
Since 2005, the OPA has been moving forward in implementing the short term (2006 – 2008) recommendations of the integrated solution including:
- aggressive conservation and demand management in partnership with industry, local power distribution companies, municipalities, and consumers
-
upgrades to the Armitage Transformer Station in
- new transformer station (under construction) at Holland Junction in King.
The OPA’s longer term (2008 – 2015) recommendations are in process, through the current RFP for a local generation plant in Northern York Region. Local generation (via a 350 megawatt natural gas-fired simple cycle peaking generating facility) has been identified by the OPA as the technically preferred solution to meet the need for supply diversity and reliability in NYR.
On
The criteria being applied by the OPA in evaluating the bids were outlined in detail this Memorandum to Markham Council.
Markham Council requested in June that the OPA revise its draft Request for Proposals (RFP) to place a greater emphasis on environmental, municipal consultation and community outreach criteria in the scoring and evaluating proposals for determination of a final proponent.
OPTIONS/ DISCUSSION:
OPA
Process for Finalizing a Site
The OPA established a process that started with the Request for Qualifications for acceptance of potential private companies, to the Request for Proposals for specific sites to the final selection of a site. The following chart outlines the key dates in the RFP process:
|
Release of draft
RFP, |
|
|
Release of Final
RFP |
|
|
Registration
deadline for Qualified Applicants to become Registered Participants |
|
|
Proposal
Submission Deadline |
|
|
Evaluation of
Proposals |
November 2008 |
|
Completion of
Evaluation and announcement (target date) |
December 2008 |
The draft RFP document outlines a four stage Evaluation process as follows:
Stage 1 – Proposal Completeness Requirements (pass or fail)
Stage 2 – Mandatory Requirements (pass or fail)
Stage 3 – Rated Criteria (scoring up to a maximum 100 points)
Stage 4 – Economic Bid Evaluation and Selection (cost/value rating)
Of greatest interest
to municipalities will be “Stage 3 – Rated Criteria” as identified below:
|
Overview of Rated Criteria |
Maximum Point Scores |
|
Electrical
Connection Point |
20 |
|
Environmental Assessment
|
18 |
|
Municipal and
Regional Approvals |
18 |
|
Community Outreach
|
17 |
|
External
Contractor Arrangements |
8 |
|
Equipment
Availability |
5 |
|
Fuel supply |
5 |
|
Water Use |
4 |
|
Water Supply |
3 |
|
Proposed Milestone
Date for Commercial Operation |
2 |
|
Total Maximum
Point Score Minimum Required
Total Point Score |
100 40 |
Although the OPA received the comments from Markham Council in June 2008 requesting a greater emphasis on environmental, municipal consultation and community outreach criteria in the scoring and evaluating of proposals, the OPA did not modify the above scoring criteria.
Original Request for Proposals Submitted to OPA
Since the June 24 report, five companies originally qualified as potential applicants for the installation of this facility. Out of the five, eight potential sites had been identified over the course of the period between June 2008 and October 2008 (certain proponents having more than one candidate site). These potential eight sites under discussion were located in the following municipalities:
- One in
Town of
- Two in
Town of
- Three
in
- Two in
Town of
(See page 5 of this report for reduced list of final proposals currently active)
Municipal Reaction to Potential Sites
Public and Municipal Council reaction to the peaking plant proposals has been controversial. Each of the proposed host municipalities passed resolutions indicating their unwillingness in being a host municipality for a gas fired simple cycle peaking generating facility.
Region of
Region of
· OPA’s process for RFP
·
·
· Addressing comments received from the public
· Regional and Provincial planning policies to be addressed
· Environmental and health risk factors associated with such facility
· An overview of the Environmental Assessment process.
As part of the approval process, proponents have applied to the Region of York for an amendment to the Regional Official Plan for candidate site locations. The Regional staff report on November 20 recommended staff not evaluate these applications until a specific site had been selected through the OPA process. In addition some proponents have submitted their Environmental Study Report (ESR) for their specific sites as part of the Environmental Assessment process. Normally there is a 30 day review period to comment on these reports. However, it is anticipated that the selected proponent and site by the OPA will not be made until after the end of the 30 day review period. The latest Regional report has requested the OPA extend the commenting period for the Environmental Assessments until after it has made its selection decision.
Due to community concerns coming
from various sources regarding the status of the OPA process, the Chair of the
Hydro One Task force issued a ZAP newsletter on
Final Proposals being Evaluated
by OPA
At this the final stage of the OPA RFP process, the OPA has received six proposals from four different proponents to design, build and operate a new 350 megawatt natural gas-fired simple cycle peaking generating facility for Northern York Region. The following is a summary of these proposals:
|
Qualified Applicant |
Proponent |
Facility Name |
Location |
|
Northland Power Inc. |
Northland Power Inc. |
|
|
|
Northland Power Inc. |
Northland Power Inc. |
|
|
|
Northland Power Inc. |
Northland Power Inc. |
|
|
|
Sithe Global Canadian |
SG Northern |
|
|
|
TransCanada Energy Ltd. |
TransCanada Energy Ltd. |
Bradford West Gwillimbury |
2214 Ninth Line |
|
Pristine Power Inc. |
|
|
|
In summary there are now three
proposals in the
The OPA have indicated each proposal “will be evaluated by an independent panel and the process will be monitored by an external fairness advisor, with the final selection to be publicly announced by year-end. Following selection, the winning project must continue with the municipal and regional land-use approval processes, as well as complete the Provincial environmental assessment process.”
News Release from
The Northern York Region and Bradford West Gwillimbury Mayors met with Energy Minister Smitherman on Friday November 21 to discuss the Mayors’ concerns related to the installation of a peaking facility in Northern York Region or Southern Simcoe County. On Monday November 24, the Northern York Region and Bradford West Gwillimbury Mayors issued a joint media release (attached as Appendix ‘A’).
The
November 24 media release states that “Minister Smitherman responded to the Mayors’
concerns by acknowledging the collective position that they are “unwilling hosts,” but assuring
them that the need for power is real and that the procurement process is continuing with an
expected mid to late December announcement of the selected proponent and site. The Minister
outlined to the Mayors why the facility is the best solution for Northern York Region’s/Bradford
West Gwillimbury’s growing energy needs, as well as explaining how this solution is part of
the Province’s overall commitment to reduce dependability on coal-fired generation.
Smitherman also stated that the Province will continue to promote conservation
and the use of renewable energy where possible.
Minister Smitherman committed to attending an OPA
organized public Town Hall meeting in the municipality of the selected site in early 2009”.
Next Steps
After
the OPA has made a decision on the selected proponent and site by the end of
December, the successful proponent will continue pursing necessary approvals
prior to construction. It is
anticipated that this will involve any applicable municipal approvals under the
There are no direct financial
implications to the Town of
DEPARTMENTS CONSULTED AND AFFECTED:
Not applicable at this time.
RECOMMENDED
BY: ________________________
Commissioner, Development Services
ATTACHMENTS:
Appendix ‘A’ - Joint Media Release,