TransCanada Corp. has signed a contract with the Ontario Power Authority (OPA) to develop, own and operate a 900 MW gas-fired power plant at OPA’s Lennox Generating Station on Lake Ontario’s northern shore. The plant is expected to be in service by the first quarter of 2017.

The contract comes more than two years after the Ontario government, besieged by opposition from community groups, pulled the plug on plans for a 900 MW natural gas-fired generating station in Oakville, about 135 miles west of the Lennox Generating Station (see Daily GPI, Oct. 8, 2010).

Details of the contract are based on terms of a memorandum of understanding TransCanada and OPA signed in September (see Daily GPI, Sept. 25). 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 electric transmission and gas infrastructure, as well as the expertise of local workers, OPA said.

The Napanee power plant “will operate under a 20-year power purchase arrangement with the OPA that will generate stable earnings and cash flow over the next two decades,” TransCanada said. TransCanada also finalized agreements with Ontario Power Generation to acquire land at the Lennox site.

When plans for the Oakville plant were canceled, 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).

The Lennox Generating Station has a total generating capacity of 2,100 MW, enough to meet about 8% of Ontario’s electricity needs.

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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