Nearly two years after plans for a natural gas-fired generating station in Oakville, ON, were canceled by the provincial government, TransCanada Corp. has signed a memorandum of understanding with the Ontario Power Authority (OPA) to develop, own and operate a 900 MW gas-fired power plant at OPA's Lennox Generating Station in Bath, on Lake Ontario's northern shore.

"The Lennox power plant would act as a replacement facility for one that was planned in the community of Oakville," TransCanada said.

TransCanada and the OPA expect to finalize a contract based on terms of the memorandum of understanding by Dec. 14, and the plant is expected to be in service by the first quarter of 2017. The cost of the plant "will be comparable to the cost of the original, competitively procured Oakville plant," which had been estimated at C$1.2 billion, according to OPA. The location was selected to take advantage of existing transmission and gas infrastructure, as well as the expertise of local workers, OPA said.

"Today's announcement helps support Ontario's plan to modernize the province's electricity infrastructure, clean up the air we breathe and end the use of coal by 2014," said Minister of Energy Chris Bentley.

The decision comes almost two years after the Ontario government, besieged by opposition community groups, pulled the plug on plans for a 900 MW natural gas-fired generating station in Oakville, about 135 miles west of Bath (see Daily GPI, Oct. 8, 2010). At the time the Energy Ministry said changes in supply and demand, including more than 8,000 MW of new, cleaner power and successful conservation efforts, governed the decision. In its initial plans for the power plant the Ontario government had said it was necessary because of the province's drive to dispense with coal-fired power generation by 2014 (see Power Market Today, Oct. 1, 2009).

TransCanada will receive $40 million to cover costs it incurred for goods and services that cannot be used at the Lennox site, according to OPA.

TransCanada already operates the 683 MW Halton Hills Generating Station in Ontario, has 50% ownership of the 550 MW Portlands Energy Centre on the Toronto waterfront, and has agreed to purchase nine Ontario solar plants that would produce a combined 86 MW. TransCanada also owns a large portion of each of two units at the Bruce Power nuclear facility on the eastern shore of Lake Huron.

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