FIT Program Update - Elimination Of OPA's Right To Terminate

The Ontario Power Authority (OPA) announced a change to its Feed-in-Tariff (FIT) program yesterday that will alleviate a significant amount of uncertainty for project developers. The uncertainty surrounds Section 2.4 of the FIT Contract, which provides the OPA with the right to terminate the FIT Contract in its sole and absolute discretion until it has issued notice to proceed (NTP) to the Supplier (the counterparty to the FIT Contract). Pursuant to Section 2.4, the OPA's unilateral right to terminate only expires upon issuance of the NTP.

In order to be eligible for an NTP, however, the Supplier is required to meet four pre-requisites (NTP Pre-requisites), which include (i) completion of environmental regulatory permits (for wind and solar, a Renewable Energy Approval or "REA"); (ii) a completed financing plan confirming financing for a minimum of 50 per cent of the expected development costs; (iii) for wind and solar generators, a Domestic Content Plan; and (iv)