London Community News
It took some convincing, but city councillors have decided to support a joint venture partnership that could lead to solar power systems being installed on municipal rooftops.
During a special meeting of the Strategic Priorities and Policy Committee on Tuesday (Jan. 15) councillors voted to support an agreement between London Hydro and London District Renewable Energy Cooperative (LDREC) that will allow the city to get in on the province’s FIT Program. The FIT Program allows for generation of power (either more or less than 500 kilowatts) that can then be sold to Ontario Power Authority.
The recommendation presented to the committee was done with fairly short notice — some councillors only receiving the report just before the meeting — so as to allow the venture to meet the province’s Jan. 18 deadline for application.
City treasurer Martin Hayward apologized for the short notice, but said staff has been working with London Hydro to try and meet the application deadline.
“Our recommendation is basically asking you for direction. Given the time we had I can’t give you a recommendation,” Hayward said. “Without it (council’s acceptance of the joint venture agreement) you will not be able to enter the FIT Program. If you don’t do this, then you can’t do anything, you lose the opportunity.”
Hayward said city staff wasn’t prepared to give a recommendation around the joint venture due to the time constraints, but it did detail in its report a number of concerns that had been identified around the joint venture agreement. While issues such as preparation around the lease of city-owned facilities, financial capacity of the LDREC and what happens should if council failed to approve the joint venture agreement.
Vinay Sharma, London Hydro CEO, spoke to several of those points in an attempt to ease the concerns of many councillors who were concerned there hadn’t been enough time for city staff to prepare a proper recommendation. The viability of the LDREC was one issue, and while unwilling to speak for members of the co-op, Sharma said there is a real opportunity for success.
After all, it is expected the money invested by the co-op will be paid off in no more than 14 years, while Ontario Power Authority has guaranteed a 20-year contract — ensuring at least six years of profits.
“There is a good cash flow out of these projects once the payback from investments is done. It is free cash,” Sharma said. “So if the co-op can come together for the purpose of making the city more green, environmentally more responsible, and not losing anything because there is a contract for 20 years . . . there is gain to be made down the road.”
In addition, Sharma said councillors should understand nothing being discussed on Tuesday guarantees any further action.
“Nothing will happen without our due diligence. It is quite possible nothing will happen. It could be all proposals could be rejected,” Sharma said. “London Hydro knows all this investment up front is an investment, it could go to waste. But that is part of this venture; we have to try.”
Mayor Joe Fontana reinforced Sharma’s position that nothing was being signed off on except for the opportunity for London Hydro and LDREC to make a submission to Ontario Power Authority.
It was a point Ward 1 Councillor Bud Polhill spelled out clearly. Polhill said approval by council of the joint venture agreement doesn’t mean the city is “putting anything on any buildings,” but rather is take the first step towards doing so.
“We aren’t approving solar panels or anything yet. That is in the future,” Polhill said. “We are asking for permission to do that. If there are issues, nothing further will happen.”
Ward 6 Councillor Nancy Branscombe remained skeptical.
“It seeks a bit sketchy. Until we get more information on this co-op, and it doesn’t sound so solid to me,” Branscombe said. “I would just like to know what the obligations are if they don’t fulfill their end of the agreement.”
Sharma assured councillors the 120-day due diligence period allows London Hydro, and the city as the utility’s sole shareholder, to have the time for staff to find all the information it is looking for.
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