Ontario Premier Doug Ford vowed to cancel and wind down more than 750 contracts for renewable power projects, making good on a campaign pledge to revamp the province’s energy policies.
Terminating the early-stage projects, which the government didn’t identify, would save electricity customers in the Canadian province $790 million, Ford’s energy minister, Greg Rickford, said in a statement Friday. Shares of clean-energy companies fell, including Pattern Energy Group Inc.
“We clearly promised we would cancel these unnecessary and wasteful energy projects,” Rickford said.
The move came after Ford, who took office June 29, fulfilled his vow to shake up the executive team of utility Hydro One Ltd., sending shares plummeting Thursday the most since the company went public three years ago. It also triggered a sell off Friday of shares in companies that own Ontario wind and solar projects, as investors feared Ford was serious about his plan to cancel new developments and renegotiate contracts for existing ones.
“There was hope that they were bluffing,” Angie Storozynski, an analyst at Macquarie Capital, said in an interview.
Pattern fell 8.4 per cent Friday, the most intraday since the day after Donald Trump’s election in 2016. Boralex Inc. fell 2.7 per cent, and TerraForm Power Inc., a Brookfield Asset Management Inc.-backed clean-power owner, fell 2.1 per cent.
Clean-energy developers have flocked to Ontario, thanks in part to government incentives to spur wind and solar projects. But Ford, who plans to unwind the province’s cap-and-trade program, has vowed to scrap those subsidies as part of a broader effort to bring down electricity prices. He’s also pledged to renegotiate electricity contracts.
Northland Power Inc. Chief Financial Officer Paul Bradley, whose Toronto-based company owns solar and wind farms in the province, said he’s “categorically not worried about losing the value of our contracts. There’s not a case for them to unilaterally abrogate the contracts.”
– With assistance from Christopher Martin and Jim Efstathiou Jr.