November 24, 2009

Kevin Flynn
M.P.P. Oakville
2330 Lakeshore Road West, Unit 2
Oakville, ON. L6L 1H3

Dear Mr. Flynn:

I would like to thank you for personally calling for a moratorium to be placed on the construction of natural gas power facilities – but I fear that it likely doesn’t go far enough. For reasons that will seem obvious in a moment, this entire process and procedure from the Ontario Power Authority has been rife with contradictions, conflicts, as well as flawed procedural and practices in both its RFP and implementation process.

On behalf of the farmers and residents in the Holland Marsh, we have experienced, first hand, the devastating impact that this type of facility can have upon any area. We do not consider our fellow residents nor ourselves as luddites, but we strongly believe that the OPA’s process has led to erroneous decisions being made – which has reflected poorly on this government and the Ministry of Energy at a time when Ontarians are making huge strides towards more environmentally sustainable energy practices.

Ultimately what is scary is that no one seems to be paying attention – seemingly hoping, beyond hope, that there is a mistake that will be rectified at some point through common sense. I am afraid that common sense has left the building, leaving behind a hot (Holland Marsh-grown) potato in its place. Detailed below is the information that I have collected in regards to this entire process, showing – and being backed by hundreds of public documents – a governmental agency that is playing football with our taxpayer money and the entire law-abiding establishment.

If you indicated that the Oakville location is “so poorly suited for a power plant its selection defies logic”, then perhaps you may want to both take note of this letter and, as well, pay a visit to the location within the Holland Marsh. Our struggle to get government to hear from us has been met with a silence so deafening that it is thundering across our micro-climate, uniquely shaped organic-based community – one that provides one of four essentials for human beings: food.

Our opposition is obvious – the short and long-term detrimental damage to one of the most unique agricultural areas in Canada, if not North America – the Holland Marsh. This facility will be constructed just a stone’s throw from Ontario’s Salad Bowl. The Ministry of Agriculture, Food, and Rural Affairs actually has a segment on its website about the damage that the emissions from this type of facility does to plant growth. Yet, this seems to have been put aside for the moment. After meeting with the proponent, it has become clear that their environmental studies do NOT address the unique, organic-based soil of the Holland Marsh. In fact, given that the air model studies are just that, models, it would seem dramatically clear to our farmers that there have not been any studies related to this – other than on a computer. This is real life we are dealing with, and computer-generated data may work for Hollywood and pictures, but it lacks any relevance to the reality we, as farmers, deal with on a day-to-day basis.

Wind data from Toronto Airport, instead of from the Holland Marsh Muck Station; mineral soil based data that bears no relevance to the Holland Marsh soil structure; the need for a minimum of one million litres of water – and where will that come from?; the unique micro-climate that allows the Holland Marsh to be the provider of more than 50 per cent of Ontario’s mainstay vegetable production and something that will forever be altered by the turbine, heat jets that will stick out beside the black soil and destroy our lands, our farmers’ livelihoods, our environment . . . and for what? There is absolutely no proof that this entire process was legal to begin with, based on the fact that then-Minister George Smitherman’s call to action was conducted on an erroneous study from 2005 stating that the need outweighed the supply. In our opinion, this is not a fight against a company that may or may not be constructing this facility but against a provincial government that has not looked at all environmental issues surrounding this facility, has not looked at better alternatives, has not conducted due diligence as far as the process goes, and has clearly not looked at simply viewing the entire procedure with a new set of eyes given the economic downturn, the dramatic curtailing of power with the unfortunate loss of a number of manufacturing facilities in York Region, and the clearly detailed fact that our housing market – along with new construction – is in a major slump.

We want to let you know, as an organization – and on record – that our opposition is based as much on the reality that this is just bad for the area as the perception that our competitors will subsequently be able to tell the general public that the food grown in the Holland Marsh, with its mega-polluting peaker plant facility, is fatal to consumers. When we decided to make the Holland Marsh the first area in Ontario with not only a regional logo but a program where safe, healthy food is being grown for a population that wants LOCAL food, we did not envision adding the twin smokestacks of death to hail alongside the CN Tower in our retailer logo.

Farmers are the largest tax base in this community – one that has grown around the Holland Marsh for the last nine decades. We have survived economic downturns, depressions, recessions, hurricanes, an F-4 tornado that crumpled transmission towers, flooding, hail, violent extremes in weather and consumer preferences, and a litany of government regulations that have no basis in logic or common sense. We have prevailed against each and every challenge for nearly 100 years; we have prevailed against low prices, high input costs, and uncertain markets. We have faced the worst that Mother Nature has thrown against us and still come out on top.

This may be the first time in our long history where we won’t win – unless someone with the authority, the might and the political courage, stands up and says, aloud, that we will not allow our farmers to go quietly into the night; we will fight with every legal and political option possible to ensure that our constituents views are heard – and the message coming out loud and clear is that your constituents want access to our local food. And, as a gentle reminder, your constituents, our consumers, are voters.

Don’t let our heritage fall to the wayside because this provincial government thought the need for air conditioning was far more important than their daily meals. If we do not stop this facility, there will come a day when this province, its citizens, and our fellow Canadians regret the short-sighted decisions made today that allowed for energy to become more important than food. It would be childish of us to say, “we told you so” – but, it would also be too late.

Consider this information, that we have, and that others do not yet have access to – and you will see why we struggle with this decision – and the inability to make others within the government see reason:

We believe that the procurement process was irreparably flawed and was manipulated by the successful proponent in the following ways:

1. The OPA made several material changes to the terms and conditions of the procurement process (including mandatory terms and conditions) to the unique advantage of one bidder. Without those changes that bidder could not have submitted a compliant bid. That bidder was ultimately selected as the successful proponent.

2. The successful proponent and only the successful proponent used legal machinations to circumvent the terms and conditions of the procurement process.

3. This site selected is completely unsuitable for a peaker plant. (This has been confirmed by the successful proponent just recently moving the site to a completely different one than was bid in its RFP.) If the OPA had observed and enforced its own requirements the unsuitability of the site would have been obvious and the bid would not have been successful.

4. Since being selected as the successful proponent, the company has made material changes, including relocation of the site to land that was acquired recently and after the Closing Date of bids under the RFP, and relocating the connection point of the peaker plant to the IESO-Controlled Grid, the designation of which was a mandatory condition under the RFP.

5. The relationship between the communications company hired by the OPA for the Project and the communications company of the successful proponent (i.e. that they were affiliated companies sharing the same office space) creates at least a reasonable perception of a conflict of interest that further calls into question the integrity of the procurement process.

In sum and has been demonstrated by subsequent events, the successful proponent did not and could not meet and has not met the requirements of the RFP process and, therefore, the selection of the successful proponent should be overturned and the Project stopped.

DETAILS

1. Changes to Terms and Conditions That Uniquely Benefited The Successful Proponent:

a) The OPA conducted an RFQ to confirm “ ......there were interested parties with the technical and financial resources and willingness to undertake the (Project)”. One of the mandatory requirements for participation in the RFQ was that proponents have control over the site on which they were proposing to locate the peaker plant. Only those applicants who had successfully completed the RFQ process could participate in the OPA’s RFP.

The bid winner did successfully complete the RFQ process. Nevertheless, the site that it bid in response to the RFP was acquired after the RFQ process was completed and acquired the site from a company that had not successfully completed the RFQ process. In other words, the OPA allowed the eventual winner to bid a site that had not been qualified by the RFQ. This not only violated the mandatory condition in the RFQ that bidders have “site control”, it also made the RFQ process meaningless.

b) Mandatory conditions under the RFP (3.2.14.1.) were to provide a map indicating the proposed location of the peaker plant; the proposed connection with the IESO-controlled Grid; and the proposed connection line route and, if the connection route traversed land not controlled by the proponent “Proof of any agreements with Hydro One or other for it necessary Connection Line route (sic)”. Proponents’ connection points were evaluated on their proximity to the IESO-Controlled Grid and on the ability to offer “islanding” (“A”, “B”., “C”., or “ D.”). The winning bidder claimed an A connection, but to consummate such a connection it would have had to use an existing Hydro One easement across a nature reserve owned by the Ontario Federation of Naturalists. Information that has come to light since indicates that i) Hydro One had told the company it could not use its easement to make the connection point; and ii) the Ontario Federation of Naturalists had informed said winning company that it would not allow the easement to be used for that purpose.

Accordingly, the wining bidder could not meet several mandatory conditions specified in the RFP. Again, that disqualifies the bidder – but it didn’t happen

On October 28, which incidentally was a full month after the September 30, 2008 deadline specified in Cause 2.2 of the RFP for the issuance of addenda, the OPA issued Addendum #2. The effect of Addendum #2 was to relieve the eventual winning bidder of the obligation to provide proof of the agreements that were necessary to effect their proposed connection point. Under Addendum #2, the company simply had to provide evidence that it had made a request to Hydro One or any other relevant party to enter into the necessary agreements. The company had, of course, made the requests – they had been denied – but Addendum #2 allowed them to make a compliant bid and to have their proposed connection point marked as a C connection point, rather than a D, thus generating 18 additional points for the bid in OPA’s evaluation scheme.

That the connection point designated by this company is and always was infeasible, has been demonstrated by the fact that they have completely abandoned the connection point it bid in response to the RFP and is now developing a completely different connection point, apparently with the OPA’ s full knowledge and approval.

2. The winning company used legal maneuvers to circumvent the requirements of the OPA RFP. The RFP contained Schedule “P” that was supposed to be completed by proponents. Schedule “P” was designed to disclose the stage of each proponent in the municipal regulatory process and the municipality’s overall position with respect to each proponent’s proposed facility. Of the three proponents and sites located in King Township, the municipality ranked the winning bid dead last. The municipality was also critical of the company’s strategy of circumventing the municipality’s regulatory process. In fact, this company did not submit a completed Schedule “P” with its response to the RFP. Instead, on the deadline for submission of responses to the RFP, they submitted a legal opinion to the Township of King, the gist of which was that they were not obligated to go through the municipal regulatory process. (No other proponent took such a position.)

Whether the company’s legal interpretation (attained from a Calgary-based firm) was correct or not is irrelevant, they used legal maneuverings to circumvent the requirements of the RFP and to hide the very sorry state of its relations with the Town and the local community.

3. The site is completely inappropriate for a peaker plant. The OPA’ s selection committee never conducted a site visit. If it had, the members would have seen that the site is completely unsuited. Among other things: It is located on the floodplain of a river. (Ontario’s Provincial Policy Statement (PPS) prohibits development and site alteration in a floodplain. The definition of “site alteration” includes activities such as grading, excavation, and the placement of fill that would change the landform and natural vegetative characteristics of the site. Such activities would have to be undertaken to build a 350 MW peaker plant.) The site is located within 180 m of a Christian school and church and the Town of Annorsveldt. Its positioning has the potential to do major environmental damage to the sensitive Holland Marsh area. The Minister of Environment has indicated that the company must obtain the approval of the Lake Simcoe Region Conservation Authority before it may proceed with construction. The Authority has stated that its approval will not be granted. Furthermore, if the Selection Committee had visited the site it would have become quickly obvious that the winning bidder’s connection route to the Grid was unworkable.

4. This wining company has made material changes to the undertakings made in its response to the RFP. As already indicated, they changed its connection point to the IESO-Controlled Grid. It has done this despite undertakings and public statements by the OPA that if they could not make the connection point specified in its proposal, then their selection as the successful proponent would be nullified. This out-of-province company with American backing has also changed the site of its peaker plant. There have been three site plans to date.

5. Conflicts of Interest. National Public Relations was the OPA’ s agency of record to handle communications for the Project. During all material times that National performed this role for the OPA, National was also providing public relations services to this private company that won the bid.

Furthermore, Global Communications Inc. was hired by the company to handle its public relations for the project. According to Global’s own website at the time (which has since been taken down):

“Global Public Affairs, one of Canada’s pre-eminent government relations firms, and NATIONAL Public Relations, Canada’s largest public relations firm, enjoy a business partnership allows both firms to provide comprehensive government and public relations services to their clients. The two firms share offices in Ottawa, Toronto and Halifax. Government relations services in these markets and in Calgary are provided by Global while communications services are provided by NATIONAL.”

In addition, the company’s Chief Financial Officer and the OPA unofficial primarily responsible for the Northern York Region procurement process (an OPA vice-president) worked together for years in TransAlta Mexico.

These relationships were never disclosed to proponents, municipalities or to stakeholders. In particular, the relationship between Global and National provide grounds to suspect that information provided in good faith to National by proponents, municipalities and stakeholders may have found its way to Global and from Global to the winning bidder, thus giving the company an unfair competitive advantage throughout the entire process.

Finally, missing from the entire issue is the fact that the proponent is still in violation of its requirement to conduct a SITE specific flood study – which was required by both the Lake Simcoe Region Conservation Authority and the Township of King. It has not been done for either. The proponent continues to use a broader, less stringent flood line – in essence a regional storm flood line. Were they using a site specific flood study, it would result in the flood line elevation INCREASING and thus, making the site UNDEVELOPABLE. The latest drawing from the proponent indicates that the plant access road crossing both the canal/creek and the ditch – both within the flood plain. Fill will be required for the entire facility construction – which contravenes the Provincial Policy Statement (PPS) regarding development in a flood way/plain. Contravention of the PPS is considered to be very serious at the Ontario Municipal Board (OMB) – should it get to that point.

As I indicated, if any of this is of interest, still, we have the documentation that adds to this – and much more.

Sincerely

Jamie Reaume
Executive Director
Holland Marsh Growers’ Association