Windstream seeks arbitration in $475 million NAFTA claim
Windstream Energy, stymied in its bid to build an offshore wind farm in Lake Ontario, is asking for
arbitration in its $475 million NAFTA claim
By:John SpearsBusiness reporter,Published on Thu Feb 28 2013
The owners of a stalled off-shore wind power project in Lake Ontario have filed for arbitration of their $475 million claim
under the North American Free Trade Agreement (NAFTA).
The claim by Windstream Energy threatens to add to the list of expensive energy projects that never happened in Ontario.
Until now, most attention has been focused on two cancelled gas-fired power plants in Oakville and Mississauga –
both in closely contested ridings won by the Liberals in 2011.
The Liberal government acknowledges the cancellations will cost $230 million to settle, though critics predict the real
cost will be three or four times that.
Windstream filed its hefty NAFTA claim in October over its proposed 300-megawatt wind project in eastern Lake Ontario,
off Wolfe Island.
It had been offered a contract by the Ontario Power Authority in August, 2010.
But the project was never built when the Liberals placed a moratorium on all off-shore wind developments in February, 2011
– a moratorium that shows no signs of concluding.
Windstream, which is owned by U.S. investors, is now seeking reimbursement for lost profits under NAFTA. Although the claim
arises from Ontario government actions, formally it is filed against the federal government.
Windstream gave notice of its claim in October, and is now moving to the next stage, which is appointment of an arbitration
panel. Each side nominates a member of the panel, and they agree on the third member.
In is request for arbitration, Windstream describes the offshore wind moratorium as “arbitrary, irrational and discriminatory.”
The province’s actions, it says have “effectively annulled the existing regulatory framework” and prevented
the project from occurring.
The province, the company says, has refused to offer Windstream any chance to develop on-shore projects to offset the loss
of the off-shore development.
Randi Rahamim, speaking for Windstream, said the company’s travails have gone on even longer than those of the cancelled
“Our contract was offered May 4, 2010,” she said in an email. “We are fast approaching the third anniversary.
The two cancelled (gas) projects were not put on hold as long.”
Energy minister Bob Chiarelli declined comment.
A statement from the ministry of energy said officials are working with the federal government to assess Windstream’s
application for arbitration.
“We will work the federal government to defend this action in the interests of Ontarians,” it said.
The off-shore wind moratorium has also triggered a $2.25 billion lawsuit against the province from Trillium Power, which
had proposed a wind farm in the same area as Windstream.
A court struck down Trillium’s lawsuit, but the company has appealed that ruling.
Meanwhile, on-shore wind projects are continuing to come on stream.
The Independent Electricity System Operator (IESO) says that 3,200 megawatts of new renewable power will connect to the
Ontario grid in the next 18 month – most of it wind power.
That has given rise to another dispute. The IESO says wind projects are creating surplus power, which is expensive and
technically difficult to deal with.
It’s trying to bring in new rules to control the flow of wind-generated power.
Wind companies are resisting, arguing that they’re being unfairly singled out as culprits for the power surplus.
They say that the IESO is trying to reverse rules that were set up to promote renewable power.