N.W.T. Power Corp. cancels contract for missing power generators
California company Virdi Power Inc. was expected to deliver the units approximately two years ago
The Northwest Territories Power Corporation (NTPC) has cancelled the remainder of a multimillion dollar contract with a U.S. company after two of the five power generators it promised to deliver failed to materialize last year.
Virdi Power Inc., located in Ventura, Calif., won a contract in mid-2015 to build new generators for the Jackfish Lake power plant in Yellowknife.
The generators were supposed to replace aging infrastructure at the plant six months later.
But after the first three units arrived in October 2017, about two years behind schedule, NTPC decided to scrap the contract and go back to the drawing board.
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"NTPC terminated the contract with the supplier in early 2018, based on a breach of the contracted delivery schedule," stated Doug Prendergast, communications manager for the power corporation, in an email.
Scott Spencer is the chief technical officer at NTPC. He said the decision was made after Virdi Power failed to meet a promise to deliver the remaining two generators in December.
Collicutt Energy Services in Red Deer, Alta. has since signed on to complete the work and is expected to deliver the generators this October, said Spencer.
He would not say, however, how much that contract is worth.
Original contract worth $3.4M US
"We feel that we made the right decision to wait for the delivery of the first three [generators]," said Spencer.
"However, at some point we had to make a decision as to the best way to move forward with respect to cost to our taxpayer, so we chose to terminate."
The original contract with Virdi Power for the five generators was worth $3.4 million US, according to Spencer.
A document tabled in the N.W.T. Legislative Assembly last fall shows NTPC had incurred additional costs of $560,000 by then to rent backup generators while awaiting the new units from California.
However, Spencer said Virdi Power picked up those rental costs and, in total, NTPC paid Virdi $2.2 million.
'We did everything they asked us to do'
When reached by phone, Virdi Power Inc. president Peter Virdi said he doesn't know why the power corporation cancelled the contract.
"The units have been ready as of Jan. 10," he said.
"We did everything they asked us to do, in good faith and beyond."
Virdi added his company has been "shortchanged … by a million dollars."
But Spencer said NTPC followed the contract "to the letter."
"At some point we had to make a decision on how we can keep moving forward with this project given the delays that we incurred as a result of Virdi Power's delivery," he said.