The hydro generation project at the Brunel Locks would include an educational component and is not expected to interfere with its existing uses, as per a municipal staff report.
If all goes according to plan, Huntsville residents may see shovels hit the ground at the Brunel Locks in late 2017.
Council is moving ahead with a 40-year-lease and limited partnership agreement with Green Bug Energy Ltd., making it a 15 per cent shareholder in the company’s planned hydro generation.
The town would lease land at the Brunel Locks to Green Bug Energy for a dollar a year and contribute an estimated $198,000 to the project from general reserves in 2017. In exchange, the Town would receive 15 per cent of net revenues from the sale of power. The 15 per cent is the least amount the Town can hold in order to access Ontario’s Feed-In Tariff Program incentive (FIT).
Initial projections would see the Town making approximately $54,400 a year in returns, starting in 2018.
Town executive staff, supported by legal counsel, have been negotiating the agreements behind closed doors and presented their final drafts for approval at council’s August 24 meeting.
“There have been several iterations, the ones in front of you today are ones we feel confident in,” said Manager of Parks and Cemeteries Colleen MacDonald, who made reference to the lease agreement’s insurance requirements, as well as additional provisions protecting the Town. She also made note of an out-clause in the partnership agreement, which gives the town the ability to opt out of the project before construction begins.
While Huntsville councillors gave the agreements their stamp of approval, thereby paving the way for a FIT application, some expressed reservations.
“I realize everybody likes this project. I have two concerns actually, my biggest one is funding of it from general reserves. So we’re going to fund this project to the tune of $200,000 from general reserves, which has a $2.5 million deficit. I just don’t see how we can keep doing this. How we can keep spending money we don’t have.”
Deputy Mayor, Karin Terziano
Terziano also questioned an allotment of $5,000 for audit fees. Director of Protective Services and Fire Chief Steve Hernen clarified that the fee would be more in tune with $2,000 and only used if the municipality feels there’s a reason to audit the books.
Hernen reiterated that once the FIT application has been approved, the Town will have an opportunity to look over a more detailed project plan, design and corresponding financials and decide whether to continue moving forward at that time.
Councillor Brian Thompson asked if the Town would be able to carry a debenture loan to buy more shares of the project in future, Town Treasurer Julia Finch said that while she’s waiting on an official response from the District, debentures are generally for capital expenditures only, not for the purchase of shares in a company. She anticipated that the initial commitment of funds to Green Bug could be treated as a short-term loan.
Councillor Jonathan Wiebe suggested the Town’s dividends from Lakeland Holdings Ltd. could be used to purchase shares in the company. but Finch explained that part of the revenue is used to offset the levy, while the remainder goes to general reserves to pay down the Town’s deficit.
Huntsville mayor Scott Aitchison said that in light of the municipality’s financial woes, he sees the project as a “tremendous opportunity for us to help ease the burden on our taxpayers.”
He also said the budget sub-committee, tasked with making recommendations to council during its 2016 budget deliberations , will have to take a good hard look at what the municipality spends on.
What do you think? Is there a risk in the Town investing so heavily in Green Bug?
Ruby Truax says
I agree with the Deputy Mayor on this. At a time when the Town is running a 2.5 million dollar deficit, it’s not a good idea to risk money we don’t have on a company that has never built a project of this size before. According to Green Bug Energy’s website, they have built six micro hydro projects. They’ve posted maximum output figures on three of the sites: 0.5 kW, 7.2 kW and 53 kW. The other three sites list “estimated” maximum outputs of 60 kW and 300 kW. The 420 kW system Green Bug Energy is proposing at the Brunel Locks is more ambitious than anything they’ve attempted before, so investing this heavily is definitely a risk; even more so in the Town of Huntsville’s financial circumstances.
Peggy Peterson says
It is wonderful to be making progress on stopping the power project at the Bala Falls. This story has really gone on long enough for everyone involved. I want to express my gratitude to the members of the Muskoka Lakes Council for voting to send a Resolution to the District to request help to stop the power plant at the Bala Falls for good.
The good news is that the Council in Muskoka Lakes has finally taken a stand to protect the assets of Muskoka. On Tuesday, September 22, Committee of the Whole voted 7 to 9 in favour of Town Council recommending that the District of Muskoka reject any offer from Swift River to utilize any lands owned by the District as required for the proposed hydro dam. Allen Edwards, Gault McTaggart, Donelda Kruckel, Linda Barrick-Spearn, Phil Harding, Ruth Nishikawa and Sandy Currie all voted in favour of the District Protecting their land and associated assets. Only Councillor Jean-Ann Baranik and Mayor Don Furniss voted against protecting District lands.
It should also be noted that in the past, Council voted in favour of leasing some of the Township lands reportedly because they believed it was a trade off to protect Margaret Burgess Park. In this case, as there is no loss to the public and only a gain for the Township of Muskoka Lakes (in that this property is integral to the building of the proposed hydro plant), councillors (save and except Mayor Furniss and Deputy Mayor Baranik) are all living true to their words that “if given the choice, they would do what they can to help stop the plant in Bala.” Tuesday’s decision showed that 7 out of the 9 councillors in attendance that day showed integrity and consistency in living up to their word of stopping construction if they could. Congratulations Muskoka Lakes – a job well done.
Now we wait on a final vote for Muskoka Lakes Council on October 16 and then with a positive vote again it will go to the District to be addressed. It is very important that everyone in Muskoka write to the District to support this resolution which can truly get this project cancelled.
We have many reasons for wanting to save this town from economic destruction including the Auditor General for Ontario, who mentioned in her December 2014 report about the Green Energy Act and Hydro rates that Ontario does not need any more power. We have actually been using less for over seven years now. She also tells us in that report that our electricity bills should have gone down 46 % over those seven years but they have actually gone up almost 1500%. All of this money is being funnelled somewhere and people getting the skyrocketing bills are expected to pay. It is an issue that crosses all levels of government and was a huge mistake from the beginning.
In conclusion I am sure that the Town of Huntsville would never allow a Corporation to take over the Swing Bridge and River Mill Park for some crazy expensive private for-profit scheme so let’s help the Town out of this mess without paying a dime of costs. Please write to the District Councillors and ask them to vote to save Bala.