Georgian Windpower seeks to sue Stelco for killing plan to replace coal power

Georgian Windpower seeks to sue Stelco for killing plan to replace coal power

TARA PERKINS Thu Jun 9, 7:07 PM ET

TORONTO (CP) - Georgian Windpower Corp. wants $350 million in damages from Stelco Inc., claiming the legally insolvent Hamilton steelmaker tossed out an agreement to replace coal-fired generators with wind turbines.

According to court documents filed by the windpower company Thursday, it signed a memorandum of understanding with Stelco last summer to replace the coal-fired electricity generators at the steelmaker's Nanticoke, Ont., site with wind energy.

The project would have been "a world-class $3.2-billion, private-public partnership project that will establish Ontario and Canadians as windpower deployment leaders on the world markets," the Ottawa-based company said in court documents.

It would have provided "clean renewable energy sources to Ontario and Canada through the deployment of 2,200 megawatts of windpower generation capacity by 2010," GWC said.

Stelco was to provide 800 hectares of land in Nanticoke to operate a "green park" and would have produced the steel needed for utility poles and other infrastructure.

GWC would have installed 80 megawatts of land-based wind energy turbines, with Stelco using most of the energy, and an additional 120 megawatts of near-shore turbines that would have fed into Ontario's electricity grid, the company said.

Stelco pays more than $100 million per year for electricity, GWC said.

In addition, it would have taken one million tonnes of waste currently shipped from Toronto and redirected it to a biomass processing facility in Nanticoke, GWC said.

The company claims it worked on the project until April 15 of this year, when Stelco delivered a letter saying it was ending the deal, and demanding that GWC remove its wind-measurement towers from the steelmaker's land.

"Stelco instead plans to increase its profits by, in due course, completing the project, alone or in association with others, after eliminating GWC's interest therein," the Ottawa-based company alleges.

"Stelco intends to exploit the business opportunities created and developed by GWC, and exploit the confidential information obtained from GWC."

GWC chief executive Michael Monette said in court documents that, until the company received the steelmaker's April letter, "Stelco represented itself as GWC's partner" to the government and others.

He said the project's primary purpose was to supply enough "clean" electricity to power Stelco's Lake Erie plant in Nanticoke.

The windpower company needs permission from an Ontario Superior Court judge to launch a lawsuit against Stelco, which is protected from legal action while in bankruptcy protection.

GWC is scheduled to appear before Justice James Farley on June 27.

"I do not believe that the commencement of a civil proceeding will unduly impede Stelco's efforts to reorganize," Monette said.

Stelco spokeswoman Helen Reeves said the company will be filing its responding court documents closer to that date.

On the Toronto Stock Exchange Thursday, Stelco shares (TSX:STE.A - news) fell 12 cents, more than nine per cent, to close at $1.15

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