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8/7/2025
WT Staff
 Got water questions? Give us a call at 877-52-WATER (877-529-2837), or email us at info@wtny.us
August 7, 2025 337 pm EDT
Interview with Dennis Fotinos, Founder Noventa Energy Partners and former CEO of Enwave
(edited for clarity and length)
Developing District Energy with private equity, developer incentives and marketing
Dennis Fotinos has played a pivotal role in developing Toronto's district energy systems, beginning with a role as a City Councillor (1991-1999), then taking on leadership of Enwave Energy to build the world famous Deep Lake Water Cooling (DLWC). Today, Mr. Fotinos leads Noventa Energy Partners, continuing with the vital work of the global energy transition, in this case, WASTEWATER ENERGY TRANSFER™.
WT: Dennis Fotinos. Take us back to the beginning, tell us how you raised the first private equity investment for one of the biggest district energy developments in the world?
Fotinos: Toronto Water was looking at activated carbon filters, they had (taste and odour) issues, needed to invest in new filters around the time we were working on DLWC. I approached Mike Garrett (City of Toronto Chief Administrative Officer) and Barry Gutteridge (City of Toronto Public Works) with a plan to basically build three new raw water intake lines (depth 80+ m). It cost us $90 million, then we turned the lines over to the City for a dollar. We got beneficial use of the new intakes for 50 years, all the cold water we needed, and in the process, the City was able to get cleaner water without spending any money. The City actually did quite well because we paid an Energy Transfer Fee for the use of the cold water, three-quarters of a penny per tonne-hour of cooling. That fee started at $5 million a year to the City, it has gone up by CPI each year, so its a lot more than that now. That's an additional revenue stream for the City and helped us, because we got to use the John Street Pumping Station as our main main hub for DLWC.
The other part of it was finding an equity partner. Before I came along, the City tried to privatize Toronto District Heating Corporation (ON #467633) a couple of times. The problem was that most of the buyers or investors had short term investment horizons. With the pension funds, the liabilities are 25 years out. So, if you become a city employee today, you don't receive your pension for 25 or 30 years. In the meantime, you contribute to the fund. So the pension funds have these pools of capital they can deploy, and they are much more patient about when they get a return on their capital. (Ontario Municipal Employees Retirement System) OMERS was an ideal partner for us, the City pension fund. When I pitched the idea of OMERS coming in as a partner to the other non-share capital members of TDHC, they were quite happy to to sell their interest.
The City was a little reluctant. The pitch I had was, OMERS is us, the City. If OMERS pension fund makes money, that just goes back to pay pensions of the city employees. So it was a nice circular fit, we privatized the Toronto District Heating Corporation without any tender call, without any RFP. On top of that, I had to go get a legislative change at the last minute. This was a non-share capital corporation created by an Act of Parliament in the province in 1982 that united five (steam) systems. So it wasn't just a matter of privatizing.
I had to get agreement from each of founding members: the City of Toronto, the University of Toronto, the Province of Ontario, the hospitals and the Terminal Railways. So they each had their own steam systems that were interconnected by Ray Bremner's network. By the time I came along in 1997, the debt owed by TDHC to the City of Toronto for building that interconnection had gone from $17 million to $30 million. when I became chair of TDHC Board, (Mayor) Mel Lastman said to me, "Sell the %$&^ steam business, its bleeding red ink. It's useless!" Instead of doing that, I thought, maybe this is an opportunity to use the rights-of-way that TDHC had, because they had the right to dig up city streets.
So to get that, I had to get agreement from the board members of the TDHC to sell their interests. As it was a non-share capital corporation, there was no division of shares. So I suggested to them, each of you appoint two members to the board and the City appoints four, so I would argue that each Member owns 20% of the business and the City of Toronto owns 40%, otherwise, why would you have agreed to that split on the board? And so that I was able to convince the board members that that was the case, and so the next step was to convince OMERS to make an investment in the business. Basically, we bought out the interest of the University of Toronto, the hospitals, the Province and the Toronto Terminal Railways. The City stayed in and contributed Pearl Street steam plant, becoming partners with OMERS, that's how we started Enwave.
I had to go to the Province, beg and plead, the Province had just introduced the Energy Competition Act, (Bill 35). The Energy Competition Act was going into third reading. And so if you know the process in the government, when an Act goes into third reading, there are no more amendments allowed. The amendments are made in second reading where the public gets to go in and make comments on the proposed bill, and then the changes are made and then it becomes an Act after third reading. The Energy Competition Act in Ontario had already gone through second reading, so I had to go to (then Premier) Mike Harris and say, "Look, we need you to give us a change of legislation for TDHC to create this private company. Everybody's willing, everybody wants to do that, but we have to (amend) the Act. Initially I was told to do a Private Member's Bill. A Private Member's Bill will take a year and a half to go through, they just take forever. They're just very cumbersome. So, I proposed, "What if we amend the Energy Competition Act? And I remember Mike Harris, "Well if you can get the Liberals and the NDP to agree to that and not raise any fuss in the legislature, I'll do that." So, I got Jack Layton to help me with the NDP, I approached the Liberals and they all agreed not to object to this change. If you take a look at the last 16 pages of the Energy Competition Act of Ontario, there is the Act to amend the Hospital Steam Corporations Act.
So I ran that. I was able to get an amendment, which I was quite proud of. All done after second reading, to a piece of legislation that just went by the wayside, nobody paid any attention to it. All of a sudden TDHC was a share capital corporation owned 50% by the City and 50% by OMERS. A month later, I became CEO. I left council to become CEO of TDHC and rebranded the company. I thought, Toronto District Heating Corporation sounds like you have marbles in your mouth. It's just two much. So I thought, energy, and we are doing deep lake water cooling, so energy and wave, just on an elevator ride coming down from the 52nd floor of the TD tower with a friend of mine who was a graphic designer, I said, "What do you think of Enwave, like new wave, it's a new wave trend, Enwave. He goes, "Yeah this works, let's do Enwave". So we created it, that's how the name Enwave came up on an elevator ride from the TD center down to the bottom going home from work.
Next, I had to change a whole bunch of stuff that was done improperly in the in the company and, you know, they had rates like Toronto Hydro rates. You know, I told you that Toronto Hydro wanted to buy TDHC, give us 12 million bucks and mothball the business.
I approached Toronto Hydro and John Barnes, Barnes said, "This company's worthless Dennis."
I said, "Guys, this company is worth a lot because it has the right to dig up any city street in the province of Ontario. The company is created by an Act of Parliament. It has more rights than Toronto Hydro. It has the same rights as Hydro One, in terms of what it could do in other cities in the Province of Ontario. And that was what's really valuable about the TDHC, the same business that was losing $3 million a year.
The first thing I did was change the rate structure. I remember going into the first year as CEO, it was a really mild winter. We didn't sell a lot of steam, and we didn't make a lot of money that year. We went back to the board and said, "Oh, we had a really mild winter, so we didn't make a lot of sales", and they understood. Then the next winter was freezing cold. Enbridge interrupted the natural gas supply with heating oil. The oil was a lot more expensive. So, the second year I went back and said, "Oh, it was really cold this year, we got an interruption from Enbridge. We had to buy fuel oil, which was more expensive. I remember so well, Tom Gunn was the Chief Investment Officer for OMERS at the time. He said to me, "Dennis, what is this? The Goldilocks company? When it's too hot, we don't make any money, but when it's too cold, we don't make any money. Are we ever gonna make money in this business?"
Then he said, "Did you read the story in the paper today?" There was an article in the Globe and Mail that said the average tenure of a CEO was three years. He goes, "The average tenancy of a CEO is three years. You've been here 18 months."
I got the message really clear, like an alarm bell. I went back to the management team saying, "Ok guys, we're changing how we're doing things. We've got to make this company profitable." And we did. Within three years, the company was profitable.
So we turned the corner. We rebranded, we started building DLWC and brought Robert Kennedy Jr. up to do the kickoff. He had just written The Riverkeepers (Two Activists Fight to Reclaim Our Environment as a Basic Human Right) and people would go up and ask, "Can I call you Bobby?" He looked exactly like Bobby Kennedy. If you look on YouTube, you'll find it. It was such a big, big draw.
Two years later, we were finished construction of the DLWC system. I went to the board and said, "We want to do a launch." That was around the time of Titanic, Leonardo DeCaprio was a big environmental activist, he had driven to the Academy Awards in Toyota Prius. So, I called up the Sierra Club and I said, "Can you get us DeCaprio? We couldn't get him, but we could get Alec Baldwin. I went to the board and said "We're gonna bring up Alec Baldwin to do this with Sierra Club. I need $25,000." The board said, "We're not giving you any money to bring Alec Baldwin for the launch." So I said I would raise the money myself.
I went to each of the construction partners we had, and raised $200,000. We did a big launch event for Deep Lake Water Cooling. It was fantastic because we had been trying to connect the Queens Park (Ontario Provincial Government) complex and we weren't getting any traction. Alec Baldwin arrived an hour or so ahead of start time, I got to meet him, and he said "What do you want me to do for you?" I said, "Well you know, the Ontario Minister of Energy Dwight Duncan is going to be here, and he is going to want to take some pictures with you and his son. We would really like to persuade them to connect. If you can help, that would be great.
Well, he was fantastic! You can see that, our launch of DLWC is also on YouTube. So he gets up and he speaks, he says, "You know, I come from a state where the Governor is not very environmentally friendly. Arnold Schwarzenegger was Governor of California at the time, he is not environmentally friendly, but you Canadians are doing such great things here, and you've got some great leaders", blah blah blah. And he turns around says "Mr. Minister, will you commit right now?" Put them right on the spot, live on the stage. Duncan goes, "Such a great thing that these guys are doing here." Energy Minister Duncan gets up and says, "I'm here to tell you that we are going to connect Queens Park to Deep Lake Water Cooling. That's the commitment that this government is making." The next day after that conference I called up all the bureaucrats that have been stonewalling me for three years. I said, "Did you see the video last night? I'll send it to you. Here's the clip. You're connecting to DLWC. They hated me so much when I left Enwave, they actually disconnected from DLWC after the contract was up last year. They actually gave notice to Enwave that they disconnected some of their buildings. I was persona non grata. But it justified us, did you know, by getting them to connect, what that did for us, it gave us a load, a big load all the way up to justify building the steam, the tunnels to Wellsley Street. Then we were able to get all the other buildings in between. They were the anchor customer that we needed to reach eleven other buildings on the way. So we did it for that. No sooner did I leave, I found out that they disconnected the MacDonald block from DLWC.
It was a lot of fun. Every day I wondered, I couldn't believe people wanted to pay me to do this job. It was a great run. In the end we sold the business in 2013 to Brookfield for a load of money. City took in, I think it was in public record, $156 million and put it towards the Eglington LRT.
From the time of the sale and during those years, we paid the city significant dividends in the in the tens of millions of dollars. So they went from losing $3 million a year to making 15 to 20 million a year while we created this business. And so, you know, I was quite proud of that accomplishment.
We turned a stupid little money-losing steam business into the largest district energy company in North America. Actually at one point, Enwave was the largest district energy company in the world. So, you know, now it's split up and the US business is called Centrio and Enwave is just the Canadian business, but it's still one of the larger district energy operators in the world.
WT: Speaking to municipalities that are looking at DE, we didn't want to present this as some kind of unicorn story that's impossible to follow. What general tips do you have, for municipalities that don't have a deep lake next to the downtown area?
I don't think there's a role for municipalities to play in operating the DE businesses because they operate differently, they have to be publicly accountable. As the municipality, they're not able to do what private companies can do because, we are governed by a Board of Directors and shareholders who allow us to either go with tenders or sole source contracts. Cities, by virtue of government, have procurement processes, transparency, they can't pay their salespeople commissions. You can't pay good people, you are going to get monkeys. Municipalities don't compete, cannot compete with the private sector because they can't provide the incentives, the financial rewards to create that kind of growth.
On the other hand, I think the role for municipalities are to be facilitators. I think that they need to create the circumstances for DE to go forward. For example, there's a section in the in the Planning Act in Toronto, and I think Planning Acts of the provinces that allow builders additional density for social causes. And so if a developer contributes to a daycare center, to a school or some other social cause in the community, they are able to build one or two additional stories.
I think one of the things municipalities could take a look at, the Planning Act and say, "You know what, we're going to designate this area for DE. For example, there's a very large data center here with a large amount of waste heat. There's a very large sewer that provides another source of energy. The lake is less than, you know, 500 m away, there's another source of energy. And so, and you've got a community here, over 15 buildings have gone up in the area in the last five years. So you've got massive demand. If the city were to come in and say, "We're going to declare this area a district energy zone, we are going to provide incentives for developers in these areas to build, to connect to district energy systems." Not to force them, but persuade them that, "Hey, if you connect or design your building to be district energy compatible, and, you connect low temperature heating and cooling, connect to the DE system, we maybe more amenable to letting you build another extra two or three floors of of building space, which makes it more profitable for you." So, things like things like that.
What the city has going for itself that developers don't, is the city can aggregate to make district energy work. You have to be an aggregator. By designating areas and saying, "This is a district energy zone. There is going to be A-B-C-D benefits for developers that connect to DE in this area."
Toronto had a program where they were able to lend money at a significantly lower interest rate for specific purposes. Well, this might be one of those things. The city has the ability and they're always cash strapped, they're looking for new ways to find money. What if they use their leverage as a government entity and borrowed money and rented it and loaned it out to condo corporations that made renos, and to different people to incent them to do the things that are necessary to make DE work. Then, instead of the lenders making one or 2 % interest income, the City makes one or 2 % interest income, and at the same time, they're actually facilitating connections to district energy systems in different communities.
There are mechanisms. We sold our Slogan to British Petroleum, but it was Noventa's, our tagline was "Reimagining energy". We sold that in 2019, I wish I had kept it, but that is what we need to do. We need to rethink and reimagine what's possible and just think out of the box, provide the incentives. I'm not saying give free money and grants. I'm actually saying, use your leverage as the city to provide the financial, economic and social incentives that are going to make DE work, because that's the only way it will happen.
WT: What are the biggest advantages to being on the DE loop as opposed to opting out?
Fotinos: I would start to incentivize those developers to make it so they cannot refuse. Like this is an offer you can't refuse, you need to be on this system. And if there's anything else as a final word, maybe say to the developers, they probably already know this, there's significant upfront cost savings. Instead of trying to cut corners and build buildings with really crappy drywall, and cutting back on everything else, why not cut back on the investment on HVAC systems and let the DE system do it for you? Use that capital for other purposes. That's huge savings, that should be enough of a motivator.
Instead of putting up hoops and hurdles for developers, it has to be a very streamlined process. I have always advocated for renewable energy. Until each city says, you know what, we're going to have a Renewable Energy and Decarbonization Commissioner, it won't happen. Toronto has James Nolan, but he's not a Commissioner, he is not at the level of a Department Head. Climate Change needs to be its own department in every city. It has to have a commissioner or a general manager. Until that happens, until they have the authority to do that, it's going to be an uphill battle. Right now James Nolan and Dave MacMillan and Jack Bowen are doing such an admirable job, but they are pushing the rock up the hill. Somebody needs to be able to say, "This is going to happen, I've got the authority, I'm the commissioner of Climate, Environment. We are implementing A-B-C-D, every other department, get your act together, you're doing this.
Until that happens, I think all the rest won't happen. Until you have benevolent dictatorship, it's just going to be talk, window dressing. The democratic approach will never work when it comes to affecting climate change and and taking action on climate change.
In my mind, that's what is lacking in every municipality, a Climate Czar or a Commissioner of Environment and Climate Change. Until you get that, you're not going to be able to achieve what you want to do, DE is one part, not it's not the whole, it's not everything.
Another thing that is drastically missing in the public sector, that allows the private sector to succeed is marketing. If you take a look at the most successful companies in the world, they're successful because of marketing, Nike, Starbucks, Google, Apple. Nobody needs a new iPhone, they want a new iPhone, you have to create that want. Municipalities can do that through marketing, or government can do that through successful marketing. Without marketing, you will never succeed because the biggest failure that the Trudeau government had with their climate change agenda, it wasn't the carbon pricing. They just failed to market what they were doing properly. They failed to communicate what they were doing and very few people realized that they were getting carbon tax rebates and checks. They were getting more back in the mail than they were when they were paying. The government did a terrible job on marketing and they paid the price. Until government realizes that, if they want to be in business, they want to facilitate DE, they better start spending some dollars on marketing, promoting the city in in a clever way.
The message has to get out. That's where the private sector operators will do well. Messaging is so important, communications is so important. The cities and municipalities and government don't do a good job of that.
See Noventa Energy Partners, here.
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