Energy company expects to pay big for Kap
The newly appointed CEO of Énergie Kapuskasing Energy, Yvan Brousseau, holds up an outline of the various solar and hydroelectric projects the company is involved with. Wholly-owned by he Town of Kapuskasing, EKE is expected to pump $1.5 million annually into town coffers buy 2017.
For Énergie Kapuskasing Energy (EKE) it’s like money from heaven. And if everything works out as planned, Kapuskasing ratepayers will be reaping the benefits, possibly as much as $1.5 million annually starting in 2017.
Times photo The newly appointed CEO of Énergie Kapuskasing Energy, Yvan Brousseau, holds up an outline of the various solar and hydroelectric projects the company is involved with. Wholly-owned by he Town of Kapuskasing, EKE is expected to pump $1.5 million annually into town coffers buy 2017.
EKE is now the full-time passion of Yvan Brouseau who, until Dec. 31, was the town’s Chief Administrative Office. He stepped down to become CEO of the energy company, a fully owned subsidiary of the municipality managed by Mr. Brousseau and three members of Council.
According to Mr. Brousseau, the business of EKE became too great for him to manage along with the affairs of the town. Since he best knew the business of energy generation and he was due to retire in July, 2015, it was determined that he should stay with EKE and act as advisor of his successor and Kapuskasing Mayor Alan Spacek.
EKE’s business is quite simple. There are two divisions within the company, one based on solar generation, one on hydroelectric power production. The latter was the first venture for EKE, which struck a deal to acquire 25% of the run-of-the-river dams on the Kapuskasing River. But it is solar that is expected to grow the fastest.
Taking advantage of the provincial government’s generous rates for power produced from solar panels, the company partners with anyone interested in sharing the profits with Kapuskasing. EKE offers the talent to build and manage the project and arranging a long-term loan for 80% of the total package. Ten percent of the investment comes from the town. The partner supplies the site for the solar field, whether ground or rooftop, and the last 10% share of the investment.
Because the business is diversified over many projects, the power rates are guaranteed for 20 years and the loan interest is fixed for that period, Mr. Brousseau is not shy is guaranteeing that EKE cannot fail. And because EKE’s business plan seeks to be fair to all concerned and is ideally suited to public sector investments, municipalities and school boards are lining up.
EKE got its start because the municipality decided in 2011 to invest in solar energy and erected several small solar projects around town. The largest is just off of Brown Crescent. Those projects are already paying dividends to the community and remain in the town’s hands (They were not transferred to EKE).
Mr. Brousseau recalls it was a difficult learning curve when the projects first started. But those lessons opened the door to partner with other communities interested in following in Kap’s footsteps. Partners started signing up, first in Northern Ontario, but later in the south.
EKE has deals with Cobalt, Englehart and McGarry (Virginiatown). Two 500 kilowatt fields east of Kapuskasing one across the highway from Val Rita and another near Harty were purchased from a private investor. Most recently EKE paid $8 million for nine projects consisting of roof-top panels in Mississauga producing one megawatt of power.
There are many more in the works, some large and some small. What is so positive for EKE is that each new projects brings with it an automatic profit from the start. Mr. Brousseau said each megawatt of energy produced pays EKE enough to cover all expenses and generate $200,000 profit each year. And since Kapuskasing ratepayers are the sole investors in EKE, 100% of that money is turned over.
“Our intention is to generate $1.5 million in revenue for the town by 2016-17, with half of that money coming in 2015,” Mr. Brousseau said. With the panels guaranteed to last at least 25 years, the money for each project borrowed over 20 years and each project fully paid for in that time, EKE can expect to continue earning money for its partners for many decades.
Although the technology is relatively new to North America, solar panels have been around for a long time in Europe where decades-old units continue to generate power. While each solar panel loses efficiency with age, Mr. Brousseau said the power generated from these older units still adds to the profits collected from the first moment they are turned on.
For some of the smaller partners, the profits paid each year can represent upwards of half of their entire annual budget. That is very liberating for them and a strong motivator for taxpayers to want these kids of projects to flourish and multiply.
But not everyone is starstruck.
Mr. Brousseau estimates that three quarters of those approached so far have walked away. Some people don’t agree with the business model, some are afraid and some are opposed for political reasons. He expects to win over the timid over time, but appreciates that political obstacles can be insurmountable.
But even if only 25 per cent of those consulted come on board, Mr. Brousseau expects to be kept extremely busy for many years to come, because he hopes to make this new career last past his retirement.
After spending his working life in the public sector, most of his decisions were about spending money. At 60, he has crossed the floor, as it were, and now focuses on making money, the irony of which is not lost on him. “I changed sides,” he quips.
The shovel for the Cobalt, McGarry and Englehart projects (totaling 2.5 megawatts of power) will go into the ground this spring. By then, EKE will know the outcome of the 18 other projects that were applied for.
There may even be a new player at the table, the largest potential client that EKE has dealt with thus far. Such an arrangement would truly bolster the organization’s bottom line.