Leading Infrastructure lawyers advise on Durham York Energy Centre project

Lexpert’s Special Edition on infrastructure will be published as an insert in the Globe and Mail’s Report on Business magazine this Friday. The insert, which features biographies of Lexpert-ranked infrastructure lawyers, shines a spotlight on public-private partnerships, with articles on Aboriginal P3, green infrastructure, infrastructure investing overseas and the ins and outs of the bidding process.

In the spirit of celebrating all things P3, we would like to highlight the Durham York Energy Centre (DYEC), an Energy From Waste facility (EFW Facility) currently under construction in Courtice, Ontario. The facility was recently named among the world’s top ten most innovative recycling and waste management projects by KPMG Infrastructure 100.

The DYEC will process remaining residential waste following Durham and York Regions’ composting and recycling programs, while also recovering metals and energy. It will have a maximum capacity of 140,000 tonnes per year.

In December 2008, Durham Region and York Region (the Regions) requested from the Ministry of Energy standard pricing for electrical generation for a proposed EFW Facility.

Ron Clark of Aird & Berlis LLP advised the Ontario Power Authority on a contract for electricity procurement from the Durham York Energy Centre Project

The directive from the Minister of Energy and Infrastructure, issued on December 19, 2008, directed the Ontario Power Authority (OPA) to enter into negotiations with the Regions for the procurement of electricity from the EFW Facility at the rate of 8 cents per kilowatt-hour and upon additional terms and conditions determined by the OPA.

Caroline Jageman, the OPA’s Legal Counsel, along with Ron Clark and Corrine Kennedy from Aird & Berlis LLP advised on the contract for the procurement of electricity from the facility. The contract was entered into on September 6, 2011 and released from escrow on February 8, 2012, and contemplates a 20-year term. When operating at a design capacity, the electricity produced by the EFW Facility is sufficient to power approximately 10,000 homes.

The capital cost of the project is estimated by the Regions to be $276.5 million. Gross annual operating costs for the EFW Facility are estimated to be approximately $14.7 million, which will be offset in part by revenue generation from the sale of electricity, pursuant to the contract, which is anticipated by the Regions to be approximately $8.5 million annually.

The Regions were represented by Shane Freitag, Linda Bertoldi and Bernadette Corpuz of Borden Ladner Gervais LLP, and Matthew Gaskell, of the Regional Municipality of Durham, who represented the Regions throughout the negotiations.

In a related contract for the EFW Facility, Ian Houston of Borden Ladner Gervais LLP and Matthew Gaskell of Durham Region negotiated with Covanta Energy Corporation (Covanta) as the preferred vendor for design, build and operation of the EFW Facility, with a bid cost of $235.7 million.

Adam Chamberlain of Borden Ladner Gervais LLP provided the Regions with advice related to the environmental assessment and related approvals for the EFW Facility.

The environmental advocacy group DurhamCLEAR says it will be monitoring the construction and operation of the facility – set to be operational in late 2014 – to make certain it complies with standards set out by the province.

The group dropped its lawsuit against Durham Region et al. in June.

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