Ontario Power Generation's first large-scale solar power venture is with a partner being dogged by serious business problems, including a “substantial risk” of filing for bankruptcy protection, reports of an investigation by regulators and an admission of IT troubles.

OPG, the province's electricity-generating Crown corporation, has teamed up with SunEdison and Six Nations Development Corp. to build a 44-megawatt solar project at the site of the defunct Nanticoke coal-fired power plant. The project would be the first of its kind for OPG, as the company is striving to diversify its power-producing assets.

SunEdison bills itself as "the largest global renewable energy development company” – but it is currently under siege. The company is the controlling shareholder of Terraform Global Inc., which reported Tuesday that “due to SunEdison’s liquidity difficulties, there is a substantial risk that SunEdison will soon seek bankruptcy protection.”

SunEdison has also twice delayed the filing of its 2015 annual report. In doing so the second time, the company said issues had arisen “due to the identification by management of material weaknesses in its internal controls over financial reporting, primarily resulting from deficient information technology controls in connection with newly implemented systems.”

In addition, according to The Wall Street Journal, the Missouri-based company is being investigated by the United States' Securities and Exchange Commission over cash claims it has made in the past. SunEdison's shares have also nosedived in the past year and the solar company is carrying a significant amount of debt; the Journal, citing "people familiar with the matter," reported SunEdison is being advised on a possible bankruptcy filing.

Ontario's Independent Electricity System Operator offered 16 large renewable energy procurement contracts earlier this month, one of which was to the joint OPG/Six Nations/SunEdison project at Nanticoke. The LRP I was a competitive bidding process that the province had authorized OPG to participate in.

"SunEdison’s excellent track record delivering high quality and cost effective solar power plants was a major contributor to OPG deciding to work with us on the project," said Michelle Chislett, SunEdison’s vice-president and country manager for Canada in an OPG press release.

OPG spokesman Neal Kelly said the Crown corporation’s involvement in the project is as the majority owner in a special purpose entity, Nanticoke Solar LP. The other two owners are SunEdison Canadian Construction LP and Six Nations Development Corp.

OPG is leading stakeholder consultation and work needed for a Renewable Energy Approval from the Ministry of the Environment and Climate Change. It is also providing the project's overall administrative services. SunEdison is responsible for finalizing the project’s engineering design and developing a procurement strategy for its construction.

Kelly said that the three partners are aware of SunEdison’s recent financial situation and that all major decisions will be made by the partnership, in which OPG is the largest shareholder. The exact ownership structure and estimated project costs are unknown.

“We continue to monitor developments,” Kelly said. “We’ll continue to work together to move this project forward.”

Construction on the Nanticoke solar project is projected to start in 2017 and take two years, pending all regulatory and contractual approvals. The facility is planned for 20 years of operation.

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Twitter: @geoffzochodne

OPG solar project partner reportedly at ‘substantial risk’ of bankruptcy filing

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