Important connections in the world of energy in Ontario

Credit: Parker Gallant Energy Perspectives

Reading an article recently about Greenpeace trying (apparently unsuccessfully) to create a solar-powered town in India several years ago reminded me of a project in the GTA proposing to use “zoo poo” to create a 500-kW biogas plant.

The project is a co-op known as Zoo Share Biogas Co-operative and plans to use methane from animal waste to produce electricity in a biogas plant. The chatter about this project goes back to June 3, 2011 and those behind the project applied for a contract with the OPA (since merged with IESO).

So where is it now? A visit to the website shows the OPA advised them early July 2013 they were granted the contract. A PDF file titled “Construction Plan Report” on the site reveals “Construction of the facility is scheduled for summer 2014 with completion and grid connection expected in the fall of 2014.”

Needless to say, the plant is still not functioning but nevertheless has taxpayer support and some $4 million raised from individuals and others who purchased bonds that carry a 7% coupon on a project estimated originally to cost $4.8 million.

Curiosity further led me to look at the members of the Co-op’s Board of Directors and I noted Chris Benedetti was a Board member.  Benedetti is a principal with the Sussex Strategy Group and the head of its Energy and Environment Practice.  Some will recall Mr. Benedetti was involved in a major fundraising event for the Ontario Liberal Party as reported in an article in the Globe and Mail in March 2016 headlined:  “For $6,000, donors get face time with Kathleen Wynne and Bob Chiarelli”.

That article contained the following attributed to Mr Benedetti: “The evening is being promoted by Sussex Strategy Group, one of the country’s top lobbying firms. In an e-mail encouraging energy industry insiders to attend, Sussex principal Chris Benedetti wrote that the soirée will be a ‘small event with a limited number of tickets,’ giving all attendees face time with Ms. Wynne and Mr. Chiarelli.”

Previously, the Sussex Strategy Group’s name was connected with what the Toronto Star noted in a November 2010 headline as:  “Group plans to ‘dupe’ public about green energy costs: Tories”.  The article also noted: “The Oct. 18 document, drafted by consulting firm Sussex Strategy Group, lays out a plan — complete with a $300,000 initial budget — to change the channel on the current green energy debate, which is largely focused on cost.”

The Benedetti/Sussex connection led me to visit the Sussex website; the page titled “Our People” shows Kim Warren’s name and picture of Kim Warren under Sussex’s “Affiliates.”. Mr. Warren was, until January 1, 2017, the COO of IESO; if you check the “Sunshine List” for the 2015 year you will note he was paid $577,000.04 — not too shabby for a public servant!  When he was employed at IESO he spoke about integrating renewable energy. Due to his positive tone the short video of his speech was posted on the CanWEA website; he was clearly supportive and claimed wind energy “was a big part” of shutting down coal.  (Many grid operators around the world would dispute his claim.)

Searching on Google again using Mr. Warren’s name and his IESO affiliation turns up other relationships.  One that pops up is NRStor:  a press release dated June 20, 2017 announces he is the newest addition to NRStor’s Board as a Director and states:  “The insights and experience Kim Warren brings to our board as previous COO of the IESO is significant,” said Annette Verschuren, NRStor’s Chair and CEO. “He is a world expert on power systems and his extensive understanding of the electricity market will help NRStor grow and develop our energy storage business.”

Coincidentially, NRStor has been awarded contracts by IESO with the first one on July 22, 2014 announced by then Energy Minister, Bob Chiarelli: “Today, the Minister of Energy, the Honourable Bob Chiarelli, announced the commencement of commercial operations for NRStor Incorporated’s (NRStor) 2 megawatt (MW) Temporal Power Limited (Temporal Power) flywheel energy storage facility in Harriston, Ontario.”   Now assuming the 2MW of storage was called on to replace Ontario’s generated power it would be capable of supplying demand for half a second, or less.

The second contract awarded to NRStor by IESO noted:  “NRStor will build a fuel-free compressed air energy storage facility that will provide 7 MWh of storage capacity to the IESO.”

For those who wonder who is NRStor, the following comes from their website: “NRStor is a market leader in understanding energy storage technologies, their costs, and the benefits they can provide customers across the energy supply chain. As a project developer, we develop, own and operate industry-leading energy storage projects in partnership with progressive stakeholders and leading technology providers.”

NRStor was founded by Ms. Annette Verschuren, former CEO of Home Depot. Ms. Verschuren spoke to the Standing Committee on Finance and Economic Affairs May 19, 2015 in respect to Bill 91, Building Ontario Up Act. One of the notable comments she made was,  “We are a developer of energy storage technology, so we build projects. We are working on about 20 projects at the moment and we see the introduction of energy storage really making a big difference in terms of how we get electricity to market in a cheaper way. NRStor recently announced a partnership with the Tesla Powerwall, which is very exciting, to be introduced. We want to start in Ontario. We see that movement towards, again, using excess energy to improve costs and make it easier for customers.”

Ms. Verschuren also offered her “Congratulations to the Ontario government for its announcement on cap-and-trade policy.” and: “The privatization of Hydro One is also something that I’m very supportive of.”

While Ms. Verchuren is very accomplished and informed, from my perspective, she has missed the effects on hundreds of thousands of Ontario ratepayers/taxpayers from the Green Energy Act, and the “cap and trade” tax.    Ontario’s “excess energy,” as she puts it, represent a huge cost to ratepayers, which seems to have escaped her thinking.

The conflict in Ms Verchuren’s testimony is exacerbated by adding Kim Warren as a Director of NRStor.   The fact that NRStor has benefited from IESO’s contract awards should have triggered the question of how the media and public would view his appointment.   As a director he would be required to be a shareholder in NRStor which seems to fly in the face of IESO’s “Post-Service Restrictions” contained in their Code of Conductwhich states: “It is expected that the restriction against purchasing or holding any Prohibited Financial Interests continues until 6 months following the end of your employment or association with the IESO.”

Worth noting is Ms. Verchuren is registered as a lobbyist with the Office of the Integrity Commissioner as is Chris Benedetti (lobbyist for NRStor and 55 other companies), but Kim Warren is not.

The Ontario Ministry of Energy seems to have created a tangled web that benefits select companies and individuals.

Parker Gallant,

January 7, 2018