The natural gas power plant located on Highway 11, north of the city, is being mothballed at the cost of 11 local jobs.
In a news release, Atlantic Power Corporation says "APLP has agreed to terminate the Power Purchase Agreements with the Ontario Electricity Financial Corporation for the Kapuskasing and North Bay plants, which were scheduled to expire in December 2017, and to suspend for a period the Nipigon PPA, which is scheduled to expire in December 2022.
"Based on its assessment of the Ontario power market, including the estimated impact on plant economics, the Company has begun the process of mothballing both plants."
Mayor Al McDonald places the blame squarely on the province's energy policies.
"This is the first casualty of the Cap and Trade program introduced by the province of Ontario. I have been working with Atlantic Power and lobbying the different Ministers of Energy for three years to assist keeping this firm in North Bay."
McDonald also says he lobbied Energy Minister Glenn Thibeault in Windsor in August at the AMO (Association of Municipalities of Ontario) conference about his concerns.
"Atlantic Power is low cost, clean and provides the province with diversified sources. In my discussions with the minister, we fully recommended, supported and have asked that the province renew their contract in 2017 so that jobs wouldn’t leave the north. The government has done the same to many of these types of providers across the Province resulting in job loss in many communities.
"I am greatly disappointed by the government's decision. I will continue to work with Atlantic Power going forward as this was a stable organization in our community. Our thoughts are with the affected employees and we will assist them moving forward."
Atlantic Power says it believes the closings provide "benefits for ratepayers and contributes to the Province's goal of reducing greenhouse gas emissions".
Atlantic Power owns and operates a diverse fleet of twenty-three power generation assets across nine states in the United States and two provinces in Canada.