Tax amendments prompt redevelpment of power plants.

• Author: Ross, Ian
• Position: Brief Article

With the introduction of a competitive electricity market in Ontario one year away, Great Lakes Power (GLP) expects to greet the era of deregulation with a introduction of a competitive electricity mar new hydro generating station near Wawa.

Construction is now underway on GLP's long-awaited $75 million High Falls Generation plant on the Michipicoten River. 'Work began in April and will continue over the next 18: months for full commissioning in December, 2002.

It's the Sault Ste. Marie-based private utility's largest project since they built a string of small stations on the nearby Magpie River more than a decade ago.

GLP's vice-president of generation, Colin Clark, says the shovels would never have broken ground had there not been changes made in the way property taxes on power plants are computed by the province.

Some new tax amendments announced last fall are aimed at making power dams and generating stations competitive with energy producers outside of Ontario.

"The changes to the tax assessment have encouraged some redevelopments of sites that would not have been economical (for GLP)," Clark says, "and will probably encourage the redevelopment of some other smaller sites."

The utility had been planning since the early 1990s to demolish the existing 72-year-old High Falls powerhouse and replace it with a state-of-the-art-plant that would increase power production at the site by 57 per cent.

Clarks says the three-unit 26-megawatt powerhouse, built in 1929, had reached the end of its economic life, producing only 190,000 operating megawatt hours annually, Its replacement, a two-unit 45-megawatt station situated on the opposite bank of the Michipicoten will generate 240,000 megawatt hours annually.

After years of lobbying by GLP through their industry group, the province introduced new provincial legislation in September replacing existing property taxes with lower charges on gross revenues on hydroelectric power plants. The rates are graduated, based on a dam's production, with the smallest plants paying the lowest charges. They also received more favourable water royalties on new projects.

"It's hard to quantify the savings, but it was enough to make this project economical. Before it wasn't (economical) and didn't meet our internal threshold for the investment."

McNamara-AMEC, a joint-venture construction and engineering group was awarded the design-and-build contract. They'll also demolish the old powerhouse, and clean up the site by...