TORONTO - The Ontario Power Authority gave Eastern Power $10 million as a "sign of good faith" while trying to convince the company to stop construction at the Mississauga gas plant the Liberal government had promised to move.

But the OPA doesn't consider the money part of the cost of relocating the plant and it isn't counted in the $180 million Energy Minister Chris Bentley announced it would cost the public to move it to Sarnia.

The Liberals reversed their stance on the plant in the middle of last fall's election, promising to move it in the face bitter local opposition.

"Before agreeing to a cessation agreement, Eastern Power/Greenfield South wanted a sign of good faith, recognizing that a permanent relocation agreement would take months to negotiate," OPA spokesman Patricia Phillips said.

"Eastern Power identified resolution of a separate dispute it had with OEFC (Ontario Electricity Financing Corporation) as a gesture of that good faith."

That separate dispute didn't involve the OPA but the authority still felt it would be "a good mechanism" as it was due to inherit the OEFC's disputed contract with Eastern anyway, Phillips said.

That dispute involved a so-called "non-utility generation" (NUG) contract for power from Eastern's Keele Valley biogas plant.

To show its good faith, the OPA advanced $10 million to Eastern, with $4.6 million of it to be refunded "once the dispute was settled", Phillips said.

"To this point, a contract has not been finalized," she said.

The remaining $5.4 million has gone to Eastern, she said, but shouldn't be included in the cost to relocate the company's plant.

"In summary, while a simultaneous consideration, the NUG payment was with respect to resolving a separate electricity contract dispute," Phillips said. "As a result, it is the OPA's view that the $5.4 million is not a relocation cost."

Internal OPA e-mails released by the provincial legislature's estimates committee show the authority was scrambling to convince Eastern Power to stop construction on the Mississagua gas plant even after the Liberal government had announced in October 2011 it would be moved.

Opposition parties were having a field day at the time as work went on at the supposedly scrapped plant.
Just days after those e-mails show OPA officials discussing giving Eastern a $5-million "adder" to its Keele Valley contract, a resolution to the dispute and end to the construction was announced by Bentley on Nov. 21.
Phillips said that, ultimately, Eastern did not receive an adder to the contract, and that money was "on a separate matter".

The OEFC said that it was prepared to terminate its contract with Eastern on Keele Valley if the OPA was able to reach a new deal with the company, but it continues to "hold and administer the Keele Valley contract".