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January 01, 2012

Municipalities Can Benefit from Renewable Energy

The Green Energy and Green Economy Act (GEGEA) came into force two and a half years ago. The GEGEA created significant changes in Ontario’s approach to electricity procurement. Perhaps most controversial, however, was the removal of planning powers from local municipalities signalling the loss of the ability to control the siting of renewable energy projects “within their backyards”.

Consequently many municipalities were pushed into action by their constituents and tasked to find alternative ways to establish a voice in the renewable energy development process. On May 10, 2010, the Municipality of Arran-Elderslie passed a by-law requiring wind farm developers to provide provincial and federal level certificates stating that the wind facility will benefit, or not harm, the health, safety, and well-being of residents. Other municipalities enacted by-laws restricting the chief building official from granting a building permit unless certain conditions are met; others followed Arran-Elderslie; and others were less prescriptive , but required consultation at the municipal level.

Now, two and a half years later, how are municipalities and renewable energy generators engaging each other?

A Different Approach

From what we can tell, the target has remained and is most pronounced on wind energy projects. To date, there are 78 municipalities with resolutions for by-laws that place additional requirements on wind energy projects.

Despite the negative publicity that sometimes surrounds energy projects, many municipalities are taking a different approach. Some municipalities have been proactive and view renewable energy generation projects as a new source of revenue. Others have seized on a branding opportunity by promoting their municipality as a “green” location.

With municipalities under financial pressure and seeking additional sources of funding, investing in renewable energy may provide a much-needed source of funds. A municipality may receive funding from its own renewable energy project, or from third parties or local community cooperatives constructing a renewable energy project within municipal borders.

With the potential for large economic benefits and the willingness of some municipalities to partner with renewable energy generators, what are municipalities to do when a renewable energy developer comes knocking on the door? Faced with a new opportunity, a genuine desire to engage in due diligence is to be expected. Moreover, a municipality may indeed want to be proactive and meet with the developer to explore synergies in local economic and infrastructure development. How can these discussions happen when the developer is knocking on the provinces’ door for an approval?

Renewable Energy Approvals Process

The existing Renewable Energy Approvals regulation gives municipalities and owners of land a voice without negatively affecting the deployment of renewable energy in Ontario.

The Renewable Energy Approvals regulation announced in December 2010 increased consultation requirements for prospective renewable energy generators.1 In addition to the previous requirement to notify every assessed land owner within 120 meters of the project location, where the project is a Class 3, 4 or 5 wind facility, every assessed owner of land within 550 meters of the project must now be notified. The regulations now also require every assessed owner of land abutting the land on which a project is located to be notified. At least 30 days prior to the first public meeting, a generator must make a draft of the project description report available to the public.2

Provisions for consultation with municipalities have also been strengthened. The regulations were amended to require generators to provide additional documents to the municipality 90 days in advance of any public meetings.3 Earlier access to these documents should allow municipalities to engage in more meaningful consultation with the generator.

These changes are part of the continuing work of the Ministry of the Environment to put a streamlined but rigorous process in place for the approval of renewable energy projects. Most recently, in the spring of 2011, the ministry released a draft guide for aboriginal consultation setting out the steps that a renewable energy generator must take to ensure that full and proper consultation has occurred with all affected First Nations.4

Opening the Door for consultation

While the basis for consultation with aboriginal communities is rooted in our Canadian jurisprudence, municipalities should consider the benefits of creating a consultation guideline of their own.

While not prescribed n the regulations, a consultation guideline for renewable energy projects prepared by municipalities could signal to developers that a municipality is open for business. The guidelines would set out the required steps, documents, and timelines for consultation.

Alternatively, municipalities could collectively create a regional consultation guideline to attract development to their area. The benefit of a guideline is that it can identify the concerns and issues important to municipalities and provide a blueprint to a renewable energy generator who is seeking to ensure municipal concerns are addressed.

Municipalities willing to negotiate and engage in open dialogue with renewable energy developers are sure to improve their odds of building strategic alliances for the greater good of the community. To shut the door is to prefer the status quo.

Municipalities Embrace the Possibilities

Haldimand County

The closing of the nearby Nanticoke coal generators created the need to fill the gap left behind by the loss of business. Haldimand worked with renewable energy generators to find a new basis for its local economy and successfully negotiated a $2 million annuity for a Community Vibrancy Fund. The payments are tied to a proposed 200 turbine wind farm, with a capacity of 444 MW and 100 MW of solar. The county and the generator estimate that over 20 years, the economic benefit to the County will be $200 million. This amount includes not only the yearly payment, but also a return from taxes, land leases and other payments. 5

Brant County

Other municipalities are considering installing renewable energy projects on their own lands. Brant County has expressed interest in installing solar panels on local fields and unused land to earn revenue from the provinces FIT program.6

City of Ottawa

The City of Ottawa has also expressed interest in solar developments, approving an agreement with Energy Ottawa to develop a solar energy project on land owned by the city near a waste facility also owned by the city.7

Town of Blind River

Blind River has taken a unique approach to encourage renewable within its borders. In addition to creating a renewable energy strategic framework, the municipality obtained a loan for $49.5 million to provide funding for solar PV on lands owned by the municipality, residents and local businesses. The program will bring microFIT subsidies into the municipality to be shared between landowners and the municipally-owned North Shore Power Group. The program was clearly so strategic it will result in a solar staging facility setting up shop at Blind River. It is anticipated that the program will result in increased jobs in the municipality for construction of the facility and solar installations.8

End notes 
1 O. Reg. 521/10, amending O. Reg. 359/09, came into force January 1, 2011. 
2 O. Reg. 359/09 , s. 15-16. 
3 O. Reg. 359/09, s. 18. 
4 available at:http://www.ene.gov.on.ca/stdprodconsume/groups/lr/@ene/@resources/documents/resource/stdprod_088440.pdf
5 News Release, Haldimand County Announces a Community Vibrancy Fund and Support for Renewable Energy Investment in the Local Community, September 20, 2011. 
6 Michael-Allan Marion, “Brant County Power going into the solar energy business,” The Expositor, online:http://www.brantfordexpositor.ca/ArticleDisplay.aspx?e=3300920 
7 http://www.ottawa.ca/city_hall/mayor_council/council_updates/2010/20100526_en.html 
8 http://www.siteselector.ca/eastalgoma/blind_river/portfolio/initiatives.php


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