Jason Chee-Aloy
Director General Procurement
Electricity Resources
Ontario Power Authority
120 Adelaide Street West, Suite 1600
Toronto, Ontario
M5H 1T1

RE: Feed-In Tariff Program - draft of July 10, 2009

Dear Sir:

Powerbase Energy Systems Inc. is an Ontario-based designer, manufacturer and installer of small to mid-scale (<20 MW) renewable energy technologies, with an emphasis on hydroelectric power and biogas installations. We currently have our control, protection and generation equipment operational in dozens of countries having an aggregate of some 500 MW of grid-connected systems worldwide. Our Ontario distribution grid connected systems for NUG and embedded generating facilities is now exceeds 100 MW.

Powerbase is currently building three (3), 499 kW cogeneration biogas systems on-farm and will be signing a further two design/build biogas system contracts this year.

While there is no doubt the efforts of the OPA in developing the FIT program will create an enormous benefit for the provincial economy, through capital project investment, job creation and power sales, there are a number of serious flaws in the proposed rules that must be addressed.

Powerbase has already submitted its comments regarding pricing, that do not reflect the costs for small-scale systems where manure-only fuel materials are required. We have suggested price tranches below 100 kW to reflect the economy of scale.

Our additional concerns are as follows:

Section 2.1(a)(vii)
The above three mentioned projects were being developed with the original intention of applying for RESOP contracts and were given priority queue positions for Hydro One connection after having expended significant capital. (Two of the three projects are now connected to the three-phase distribution grid). To give this position up and enter into a "lottery" for contract placement is in no way a reasonable means of working with early system developer who began this investment in good faith.

Accordingly, these projects must be grandfathered to the FIT rules and treated with priority access to contracts.

Section 3.1 (b)
The ability of a non-Capacity Allocation Exempt facility to provide security in the amount stated at this stage in the process is extremely premature. Security should be submitted further along in the process, if at all. This security may be considered a threat for a smaller generator with non-guaranteed connection access and limited resources.

Section 3.2(b)
Facilities have spent considerable resources in conducting research and development, CIA, CCE, CCRA submissions and deposits, work with various LDC's in order to plan for connection of a Biogas facility. Rescinding of this development work in order to apply for a FIT contract without adequate protection or reimbursement for the cost of previous work and loss of legacy position is unacceptable. Projects that are shovel ready or connection ready should remain in the LDC's queuing process as to facilitate construction scheduling by the LDC to ensure a project's generation date is met. Putting a hold on the processing of the various LDC's applications etc. may jeopardize a project's ability to connect due to LDC construction scheduling.

Section 4.2 (g)
Appeals should be permitted when an application has been rejected.

Section 5.1 (a)
Projects which are substantially constructed and ready to connect to the Hydro One distribution grid (typically those so-called legacy projects having applied for CIAs prior to May 14, 2009), and where distribution availability is not a concern, should be granted priority access to FIT contracts.

Section 5.2 (a)
500kW or lower projects should not be subject to the same requirements as project above this rating. All projects below 500kW should be considered Capacity Allocation Exempt, regardless of distribution feeder voltage.

Section 7.1(a)
Powerbase agrees with the submission by the Agrienergy Producers' Association of Ontario (APA0) that the proposed FIT prices contained in the Price Schedule do not meet any reasonable assumptions for actual construction costs. The OPA is advised to listen to developers of these systems and update their price models accordingly.

As noted above, Powerbase has already submitted suggested price tranches for systems with capacities below 100 kW.

Section 7.3(b)
The ecoENERGY for renewable power programme is a federal early-adopter program and as such it is not reasonable for the OPA to claim this benefit.

Section 7.3(c)
The OPA has also indicated that it wishes to receive 80% of any future profits related to associated products or services resulting from the initial Biogas project. We vehemently object to this intrusion of our clients' business development and wish to point out that any income streams relating to these items have been fully anticipated at the conception of the biogas project and have been included in the financial viability assessment.

If the OPA claws-back the profits of these associated products, it will discourage their development, which is not in the public interest.

Powerbase finance, engineering and planning staff is available to assist the OPA with further development or discussion of these rules.

Respectfully submitted,

Robert J. Morley,
President,

Powerbase Energy Systems Inc.
150 Rosamond Street
Carleton Place, Ontario
K7C 1V2
Phone 613.253.5258
Email rmorley@powerbase.com