An Ottawa company that participated in a provincial program helping homeowners and farmers develop renewable energy projects is suing the Ontario Power Authority for $9 million, claiming it lost hundreds of customers and was forced to lay off all its employees after the OPA retroactively reduced fees paid out under the plan.

The claim, which the province disputes, relates to the government’s microFIT program, an ongoing initiative introduced by Ontario’s Energy Ministry in 2009.

The program was launched to encourage homeowners, farmers, small businesses and institutions to produce small renewable energy projects.

These owners are paid for the electricity they produce, and the prices are set to enable them to recover their costs and earn a “reasonable return” over a 20-year period.

According to court documents, Capital Solar Power Corp. says it expended “vast sums of money” and time recruiting participants for the program, and in September 2011 saw about 275 of them apply for microFIT.

Of the 275 customers, about 175 obtained an offer to connect from a local electricity distribution company, who in turn notified the Ontario Power Authority about the offers.

In late October 2011, the OPA announced a review of microFIT and said that applications submitted after Aug. 31, 2011, would be subject to new rules and a new pricing schedule.

The following year, then provincial energy minister Chris Bentley gave a new direction to the OPA, the documents say, so that the price for energy derived from solar rooftop projects was dropped from 80.2 cents per kilowatt hour to 54.9 cents — retroactive to Aug. 31, 2011.

Capital Solar says it lost all of its customers including the 175 who’d received offers to connect to a distribution company. The company laid off all its employees in July 2012, and says it lost any potential profit associated with these customers, and wasted the resources used to recruit the customers.

In its statement of claim filed in Ontario Superior Court, Capital Solar says the OPA didn’t post the price changes at least 90 days before the effective date as required and so the changes were “therefore unlawful and inconsistent” with the duties of the OPA as a public officer, and that the OPA didn’t follow is own process or rules.

The claim goes on to say that the OPA “knew or was wilfully blind” to the fact the energy price changes would injure Capital Solar Power.

The OPA disputes these allegations. In court this past January, Justice Timothy Minnema considered a motion from the OPA seeking to strike Capital Solar’s statement of claim.

Among its arguments, the OPA — which in January merged with the Independent Electricity System Operator (IESO) under the latter’s name — said it did not make the price changes, but rather the energy minister did.

In dismissing the OPA’s motion earlier this month, the judge found that “it is not plain and obvious to me that because of the interplay between the OPA and the Minister, the microFIT rules now mean nothing, and that the conduct of the OPA did not cause the injuries claimed.”

Therefore Capital Solar shouldn’t be deprived of the opportunity to prove its claims, the judge added.

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IESO spokesperson Alexandra Campbell said the Crown corporation now intends to put forward a statement of defence.

The telephone number for Capital Solar is no longer in service, and Geoffrey Hall, the lawyer representing them in court, said he was unavailable immediately to comment.

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