Plympton-Wyoming council has kicked a proposed road-use agreement with Suncor Energy for its Cedar Point Wind Project back to staff for further negotiations.
The 46-turbine project is a 50/50 partnership between Suncor and NextEra in Plympton-Wyoming, Warwick and Lambton Shores.
Plympton-Wyoming’s Chief Executive Officer, Kyle Pratt, says earlier this year council had directed staff to discuss a road-use agreement with Suncor. “We looked at a number of road use agreements from other municipalities, namely those of Lambton, Huron and Middlesex counties,” he told council May 27.
“Their lawyers had already looked at certain things so we thought we could use them as a template and come up with something better for Plympton-Wyoming.”
While Pratt noted the 30-year agreement was a lengthy document and clearly states
Plympton-Wyoming remains an unwilling host and any approval of the agreement is intended solely for the protection of its taxpayers.
The municipality will receive thousands of dollars in compensation over the life of the deal including $8,0000 in the amount of a distribution; a one-time payment of $25,000 for staff administrative time to answer calls and monitoring the project; and a one-time payment of $40,000 for environmental benefit initiatives like replacing trees.
Suncor will also post a $750,000 line of credit as a surety against road damages during the construction phase, which reduces to $250,000 following the construction period.
Mayor Lonny Napper questioned the need for a 30-year contract.
“The landscape could change so much in 30 years,” he says. “I don’t know of any other agreement we have that spans 30 years.”
Belinda Phillips, director of Wind Project Development and Operations for Suncor told council Suncor has a 20-year contract to sell power to the Ontario Power Agency.
But she says after 20-years there will still be useful life remaining in that equipment.
“Even if OPA does not re-negotiate its contract, electricity can still be sold on the open market,” she says.
“We would call it a merchant market.”
Phillips suggested for the municipality’s own protection, it would be beneficial to have the agreement extend beyond the 20-year contract.
“In my opinion the road-use agreement is for the benefit of both parties,” she says. “It clearly spells out our obligations to you and there are also some reciprocal benefits to us in terms of infrastructure locates and how we work together.”
Councillor Ron Schenk says concept of the $750,000 letter-of-credit in place sounds good but it shouldn’t be construed as cash-in-hand.
“If they damage our roads and refuse to fix them it will still require litigation to collect on it,” he says. “Collecting on it won’t be as simple as it sounds.”
Councillor Netty McEwan says she preferred to have what she called C.I.F., cash in fist.
Pratt says with or without the line-of-credit, the municipality still has the option of litigating for damages.
“If they damage our roads and refuse to pay, we are going to litigate,” he says.
Schenk added the $25,000 compensation for staff time was a “mere pittance” considering the amount of time the town’s public works superintendent will spend monitoring the project and replying to public complaints.
“Don’t kid yourself this will become of full-time job this summer,” he says.
Councillor Ben Dekker agreed.
“If we have to have a full-time roads guy out there for supervision, we need a lot more compensation,” he says.
Councillor Bob Woolvett says the $25,000 compensation for staff time was the “big flaw” in the proposed agreement. “That certainly doesn’t pay the wages of our public works superintendent and other staff, it’s not a lot of money,” he says.
Napper says Suncor looked cheap compared with what other companies pay in compensation for staff time.
“This is really an insult,” he says.
Councillor Muriel Wright said she had a problem with the fact that the agreement was negotiated in today’s dollars for 20 to 30 years from now.
She wants to see inflation built into the deal.
The Suncor representative says when construction is complete there would be a “post installation” report done by a third-party. “They go out and assess the damage done to the roads and provide us with that report,” she says.
“We are then obligated to conduct those repairs within a reasonable timeframe.”
Phillips says there will also be a final condition report to confirm those repairs were completed.
“There is ample protection within this agreement for a third-party to assess the damage for us to do those repairs,” she says.
In the end, council passed a motion to refer the agreement back to staff for further negotiations.