Replacement Power Supply for Southwest GTA

TORONTO, Sept. 30 /CNW/ - The Ontario Power Authority announced today it will sign a contract with TransCanada Corporation to design, build and operate a 900 megawatt (MW) electricity generating station in Oakville to provide a new, cleaner source of electricity for the growing southwest Greater Toronto Area. This new natural gas power plant will maintain local supply reliability and replace the coal-fired Lakeview generating station, helping Ontario become the first jurisdiction in the world to eliminate dirty coal from its electricity generation mix.

The new power plant will operate during peak periods and be up and running by Dec. 31, 2013. Emission standards for the new plant are 70 percent stricter than what is currently required by the Ontario Ministry of the Environment. TransCanada will meet or exceed these standards, through the use of gas turbines that are among the most efficient available.

In addition to the stricter emission standards, the government of Ontario today announced a clean air plan for the southwest GTA in response to community concerns about air quality. As well, Ontario's Chief Medical Officer of Health, after a review requested by Peel Public Health, has concluded that there is no evidence there will be negative impacts on the health of southwest GTA residents with the addition of a natural gas-fired power generation facility in the region.

TransCanada estimates the capital cost of the plant at $1.2 billion - all of which will be financed privately, at no risk to Ontario consumers. It will create approximately 600 construction jobs over about 28 months. There will also be significant local spending on goods and services including supplies during construction and throughout the 20-year operation of the project as well as food and lodging. Municipal taxes are estimated to exceed $1 million annually. About 25 permanent jobs will be created to operate and maintain the facility.

"This new plant will meet local needs for a reliable supply of electricity, strengthen Ontario's overall system, while performing far above Ontario's stringent air emission standards," said Colin Andersen, chief executive officer of the Ontario Power Authority. "The selection process was fair and objective. TransCanada provides the best value and has the experience, expertise and capacity to deliver the project on time and on budget."

The selection of TransCanada to build and operate the natural gas-fired power plant followed a rigorous competitive procurement process involving four proponents. The successful proponent was chosen through a multi-stage evaluation by an independent team that examined each proposal's ability to meet the requirements laid out in the procurement process. Its gas turbines and duct burners will be equipped with dry low NOx combustion technology and utilize selective catalytic reduction to effectively control emissions. And, the facility will be designed with silencing equipment to mitigate any noise impacts.

TransCanada strives to be a good neighbour in every community where it operates. The Portlands Energy Centre (in-service) and the Halton Hills Generating Station (under construction) are examples of their local facilities operating in harmony with the community. Both plants have established Community Liaison Committees to work with the community and address local issues.

TransCanada's community investment program focuses on five areas: education, environment, health, human services, and civic initiatives. TransCanada will welcome the opportunity to participate in community projects that fit in these areas. TransCanada will also work with the community and key stakeholders to ensure the development of the new power plant in Oakville includes their input.

    
    Southwest GTA Replacement Power Plant
    Backgrounder

    I)   Need for New Electricity Generation in Southwest GTA

    -    A new natural gas generation plant is essential in the southwest
         GTA. It is critical for supporting the elimination of coal-fired
         generation by 2014 and to meet the electricity needs of a region
         whose peak load has grown more than twice as quickly as the
         provincial average. It will also enable the introduction of new
         renewable sources of energy: wind, biomass and solar which are not
         available all the time.

    -    The closing of the Lakeview coal plant in 2005 removed
         1,150 megawatts of supply from the grid at a time when demand for
         power in Oakville and Mississauga continued to grow. The shutdown -
         part of Ontario's plan to entirely eliminate coal-fired power by the
         end of 2014 - has created a situation in the Greater Toronto Area
         that has seen electricity supplies diminished in the face of robust
         growth.

    -    In 1985, the region was self-sufficient in electricity, but by 2005,
         just 25 percent of what the GTA used was generated in the local
         community. This imbalance is the result of the closing of Lakeview
         and also the strong demand for electricity in the region because of
         continued growth. For example, the population of the City of
         Mississauga, which was 702,300 in 2006, is projected to grow to
         738,000 by 2011 and to 812,000 by 2031. The lack of local generation
         in the SWGTA increases strain on an aging transmission system.
         Transformer stations in the region (which step down power from
         high-voltage transmission lines to the voltage needed for residences
         and businesses) are forecast to exceed their capacity by 2015.

    -    Aggressive conservation measures are also helping to close the
         demand-supply gap. The Ontario Power Authority is working to achieve
         500 MW of conservation in western GTA by 2014. Local distribution
         companies offer a variety of programs to homeowners and businesses
         to support conservation. Since 2006, the Ontario Power Authority and
         local distribution companies have reduced peak demand by about
         150 MW in the west GTA. That's the equivalent to the power used by
         1.4 million 100-watt light bulbs. But these measures cannot offset
         the need for new generation. If a plant were located outside the
         southwest GTA, the local transmission infrastructure upgrades costs
         would increase by about $200 million and require intrusions into
         highly urbanized centres.

    II)  Selection Process

    -    A request for qualifications (RFQ) identified four companies with
         the financial resources, technical expertise and track record
         necessary to build the new plant. Proponents accepted a requirement
         to meet all applicable zoning rules and environmental regulations
         before building the project.

    -    Bids from these companies were evaluated by an independent chaired
         panel made up of representatives from the Power Authority, the
         Independent Electricity System Operator and the Ontario Energy
         Board. The panel's activities were overseen by a Fairness Advisor.

    III) Clean Air Measures

    -    Following a review requested by Peel Public Health, Ontario's Chief
         Medical Officer of Health, Dr. Arlene King, has concluded that there
         is no evidence that the addition of a natural gas-fired generation
         facility in the region will have a negative impact on the health of
         southwest GTA residents. The Ontario Power Authority has mandated
         that the new power plant meet emissions standards that are
         70 percent stricter than what the Ontario Ministry of the
         Environment requires. In addition to the more stringent emissions
         standards, the Ontario Power Authority will lead and/or participate
         in a number of initiatives announced today by the Ontario government
         that are aimed at improving air quality in the southwest GTA.

    -    The plan includes a variety of programs that target emission
         reductions and reduced energy consumption. One of the innovative
         programs being unveiled is designed to build on a strong record of
         emissions reductions in an energy-intensive industry. Holcim Canada,
         the Ontario Power Authority and the Ontario Ministry of Energy and
         Infrastructure are creating a working group of technical experts to
         explore energy efficiency and emissions reduction at Holcim's cement
         plant in southwest Mississauga. Within the Ontario cement industry,
         Holcim's plant has the lowest emissions intensity for nitrous oxides
         (NOx) and has the lowest emissions of any cement plant in Canada
         with respect to carbon dioxide (CO2) intensity.

    -    The objective of the Holcim task force includes examining the
         feasibility of various options related to demand-side management,
         co-generation and fuel mix optimization, all with a goal of
         increasing efficiency and improving the plant's overall emissions
         profile.

    -    Among its peers, the Mississauga plant ranks number one in overall
         energy efficiency, according to a May, 2008, benchmarking study of
         the Canadian cement industry. As a global company, Holcim was named
         "Leader of the Industry" on the Dow Jones Sustainability Index from
         2005 to 2008 and 'Best-In-Class' for the Building Materials Sector
         in 2009. Voluntarily Holcim has achieved the following emissions
         reductions which are beyond what the Ontario Ministry of Environment
         requires:

         - NOx concentration 11.3% reduction 2004 - 2008
         - SO2 concentration 12.7% reduction 2004 - 2008
         - CO2 intensity 15.7% reduction 2000 - 2008
    

Follow these links to the government of Ontario's news release on additional emissions mitigation in the southwest GTA:

English - http://news.ontario.ca/mei/en/2009/09/ontario-unveils-plan-to-improve-air-quality-in-southwest-gta.html

French - http://news.ontario.ca/mei/fr/2009/09/lontario-devoile-son-plan-pour-ameliorer-la-qualite-de-lair-dans-le-sud-ouest-du-grand-toronto.html

The Power Authority is responsible for ensuring a reliable, sustainable supply of electricity for Ontario. Its four key areas of focus are: planning the power system for the long term; leading and co-ordinating conservation initiatives across the province; ensuring development of needed generation resources and supporting the continued evolution of the electricity sector.

SOURCE Ontario Power Authority

For further information: For further information: Ontario Power Authority Contact: Ben Chin, VP Communications, (416) 969-6307

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