Ontario: SkyPower challenges FIT; seeks damages

SkyPower, which is developing over one GW of photovoltaic projects in Canada, has said the Energy Minister’s attempt to change the FIT program and introduce retroactive measures are both unfair and unlawful. It further states that if the new retroactive proposals go through, its pre-existing projects applications – said to total 118 – will be rendered "ineligible".

Overall, it believes that any new rule changes to the FIT program must not affect existing applications, as this would be "unfair, would wipe out most of the projects in the application queue, and would make it virtually impossible to build or finance any new ground mounted solar capacity in Ontario."

In its application, which was filed on July 12, the company stated that, among other issues, the OPA has acted "unfairly and unlawfully in failing to process existing applications in a timely manner and in accordance with existing FIT rules" and that the Energy Minister "acted unreasonably in directing the OPA to implement rules that retroactively changed the eligibility and process requirements of the FIT program."

Furthermore, it said that the OPA "did not process applications according to the stated timelines or according to the stated steps," that it "did not conduct the assessment process as set out in the Existing Rules at any time," and that it "has not updated the system capacity information in accordance with the existing FIT rules." These, and other failures by both the OPA and the Energy Minister are said to have caused "significant harm" to the SkyPower Group.

In addition to blocking the proposed changes, SkyPower is also looking to claim $100 million worth of damages. Under the Green Energy and Green Economy Act, brought into force in May 2009, photovoltaic project developers are required to pay a non-refundable application fee ($5,000 for a 10 MW project) and security to the OPA ($200,000 for a 10 MW project).

The group said that it paid application fees "in excess" of $500,000, in addition to paying out "considerable resources" funding such activities as identifying land and conducting analyses. The OPA has also "held more $20 million in security from SkyPower for over two years, during which time SkyPower has waited for the OPA to complete the connection availability testing that was required by the existing FIT rules and to issue FIT contracts." However, the company’s pre-existing applications are now said to be ineligible.

Lawyers at Gilbert’s LLP are acting on behalf of the SkyPower Group, which is comprised of 118 limited partnerships. Following the submission of the application, a hearing will be held July 24, 2012 in Toronto.

On July 12, the OPA announced that version two of its microFIT Program, which relates to photovoltaic projects of 10 kW or less in size, has begun accepting applications from both pre-existing and new applicants. As part of the microFIT application window, the OPA has said it will begin by awarding 50 MW worth of projects.

Under the new rules, it said that previous applications, which submitted their applications between September 1, 2011, and April 5, 2012, will be subject to the new rules.

"To participate in the microFIT Program, pre-existing applicants must submit a revised application to the OPA during the transition window period between July 12 and August 10, 2012. Pre-existing applicants who resubmit their applications during the transition window will keep their original time stamp and reference number – and their applications will be reviewed first. Pre-existing applications that are not revised and resubmitted by August 10, 2012, will be terminated," it wrote.