OPA sued for ‘unfair’ treatment of failed firm

A local businessman whose company attempted to help homeowners tap the potential of solar energy is suing the Ontario Power Authority for $9 million for allegedly “unfair” treatment that forced the firm’s closure.

Capital Solar Power signed on to the provincial government’s MicroFit program to promote renewable energy projects only to see money lost, customers abandoned and employees laid off when Ontario Power Authority retroactively announced it was cutting fees to be paid out as part of the program, says the Toronto lawyer acting on behalf of the company’s founder, Andre Deschamps.

“The lawsuit is about a small, family-run company (that) relied on the MicroFit rules to line up customers for the program, and then, we say, the OPA went out and ignored its own rules in terms of changing the process,” Geoffrey Hall said Sunday.

The MicroFit program was launched in 2009 by Ontario’s energy ministry. The idea was to get homeowners, farmers, small businesses and institutions to install equipment to produce electricity for the power grid. Those who signed up were to be paid a price for the electricity they generated that would allow them to recover costs and enjoy a reasonable return.

Hall has filed court documents claiming that by September 2011 Capital Solar had signed up 275 customers in the Ottawa area to participate in the MicroFit program. But in late October the OPA announced it was reviewing the program and applications submitted after Aug. 31 would be subject to a new pricing schedule.

In 2012, the government cut the price paid for energy taken from solar rooftops to 54.9 cents from 80.2 cents, retroactive to Aug. 31, 2011, Hall explained. Solar Capital subsequently lost its customers, laid off employees and closed its Bank Street office.

“The customers were lined up, Capital Solar had arranged for them to be connected to the grid through Ottawa Hydro,” he said. “Then the rug got pulled out from under them.”

The OPA’s original rules required a 90-day advance notice for changes, Hall said, arguing the agency knowingly disregarded the harm its action would cause his client in terms of lost capital investment and potential profits. Deschamps, Capital Solar’s president and chief executive officer, sold his previous business to set up the solar company. He estimates that he and his investors put about $1.2 million into the company before the OPA action. “This cost us a lot of money. It just destroyed us,” he said. In court earlier this month, the OPA, which in January merged with the Independent Electricity System Operator, maintained it was then-energy minister Chris Bentley who made the price-change decision. The judge, however, rejected the OPA’s request that Capital Solar’s statement of claim be dismissed, saying the company should have the opportunity to make its case.

The OPA has yet to file a statement of defence.