Boone Pickens challenges Canada on green power law

Thu Jul 14, 2011 3:47pm EDT
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By Nicole Mordant

VANCOUVER (Reuters) - Mesa Power Group, a Texas-based renewable energy company owned by billionaire T. Boone Pickens, plans to file a complaint with Canada charging that the province of Ontario's green energy plan violates the North American Free Trade Agreement (NAFTA).

Mesa said on Thursday it initiated the complaint process after Ontario made "last-minute" changes to rules for awarding power purchase agreements under the feed-in tariff (FIT) provisions of its Green Energy Act, passed in 2009.

Mesa Power was unsuccessful in winning contracts for two wind energy projects it wants to build in western Ontario in the latest round of FIT awards made by the province on July 4.

Ontario's FIT scheme pays generous, above-market rates to producers of renewable energy from sources such as the sun and wind under 20-year, fixed-price contracts.

The program has lured C$20 billion ($21 billion) in investment commitments to the province from both local and international investors, including Mesa Power.

The Canadian government has received Mesa Power's notice of intent to submit a claim, and should it proceed with the complaint, Ottawa will "vigorously defend" the country's interests, a Trade Department spokeswoman said.

This is not the first international challenge to Ontario's green energy plan, which the province launched to create jobs, cut emissions and fill some of the supply gap left from the closure of coal-fired power plants.

In June, Japan asked the World Trade Organization to form a legal panel to decide whether the Green Energy Act, which stipulates that at least 60 percent of equipment used in installations qualifying for the feed-in tariff be manufactured in Ontario, gives an unfair advantage to local equipment makers.   Continued...

<p>T. Boone Pickens (C) chairman of the hedge fund BP Capital Management has a conversation at the 2011 The Milken Institute Global Conference in Beverly Hills, California May 2, 2011. REUTERS/Fred Prouser</p>