04/03/2012 12:20 EDT | Updated 06/03/2012 05:12 EDT

Ontario Offshore Wind Farms: Government Faces $1 Billion Lawsuit For Moratorium

TORONTO - Ontario's Liberal government said Tuesday it would defend itself against a $1-billion lawsuit over its moratorium on offshore wind farms, the second such action over the province's energy policies.

The SouthPoint Wind suit filed in Ontario Superior Court names the province, three provincial ministries, Environment Canada, Hydro One and the Ontario Power Authority.

The company is claiming $1 billion in damages for confiscation of its property and assets, $100 million for failure to negotiate in good faith, and another $100 million for punitive, aggravated and exemplary damages.

SouthPoint tried to develop industrial wind power projects near the Lake Erie communities of Leamington, Union and Kingsville before the government announced a moratorium on offshore wind farms in February 2011.

In its statement of claim filed March 21 in Windsor, Ont., the company said the government acted "deliberately and deceptively" when it cancelled applications for offshore wind development.

"No prior notice was ever made to SPW of these defendants' decision to cancel or confiscate the offshore development sites," the company claims.

"Previous site-specific environmental studies and reports completed at great expense to SPW were rendered useless."

None of the claims has been proven in court.

Energy Minister Chris Bentley said SouthPoint did not have a signed agreement with the Ontario Power Authority and promised to defend the lawsuit.

"There’s a moratorium while we are conducting — with our American and other partners — discussions and examinations of the effects of locating wind (turbines) offshore in fresh water," Bentley said in an interview.

The 2011 moratorium was actually the second one imposed by the Liberals on offshore wind power projects.

The earlier hiatus lasted from October 2006 until January 2008, and SouthPoint said it was promised the government would find another location for its projects on shore.

SouthPoint Wind also rejected the government's claim that more study is needed on locating giant wind turbines in fresh water.

"There is absolutely no indication of potential water-quality issues with respect to offshore wind power locations which would justify the cancellation and confiscation of the plaintiff's site for water-quality studies and examinations," according to the claim.

Several hundred opponents of industrial wind turbines protested in Toronto Tuesday, calling on Premier Dalton McGuinty to resign over energy policies they say create tensions between neighbours who want wind power projects and those that don't.

The Ontario government was hit with a $300-million suit filed last week by the financiers of a cancelled natural-gas plant in Mississauga that the Liberals shut down in the middle of last fall's election campaign.

A giant electrical transformer was delivered to the site of the cancelled gas plant Monday, and the opposition revealed Tuesday that the Ministry of Energy has rented a 18,500 square metre (200,000 square foot) warehouse nearby.

Bentley said the transformer was merely being stored on the site until a new location for the power plant is found.

"There was some equipment that was procured before construction was stopped," he said.

"It needs a place to go, so some of it’s being stored on the site, but there’s no new construction proceeding."