Canadian Hydro Developers Inc. is celebrating its 20th anniversary by reaching almost 40% of Ontario's installed wind generating capacity with the recent commissioning of its 198MW Wolfe Island wind farm along with its 200MW Melancthon one, and establishing the province as Canada's leader in wind power - the first province to have attained more than 1,000 MW of installed capacity.

But it is also battling a $653-million hostile takeover bid from a much larger Alberta-based company, TransAlta Corp (TAC).

CHD has been described as Canada's most versatile and profitable producer of renewable energy, whereas TAC relies heavily on coal and is virtually forced by new regulations reduce its carbon footprint.

CHD might be the largest industrial investor in Dufferin County with its wholly owned 132 wind turbines in the Melancthon EcoEnergy wind plant (Melancthon I and II) with an installed capacity of just short of 200 MW, it's not surprising that it would become a target of renewable-energy hungry electrical organizations.

Gaining control of its 21 renewable energy generation facilities would boost the renewable portion of TAC's generation portfolio to 22% from the present 15%, according to the Globe & Mail.

The CHD portfolio - spread across hydroelectric, wind and biomass technologies in four provinces - now has a net 694 MW capacity in operation, plus 185 MW in or nearing construction, and 1,624 MW in various stages of development, according to its Website. "The portfolio is unique in Canada as all facilities are certified, or slated for certification, under Environment Canada's EcoLogoM Program."

The TransAlta offer amounts to $4.55 a share, which TAC describes as a 25-30% bonus for CHD shareholders, based on a 10-week average. But CHD shares were trading on the Toronto Stock Exchange (KHD:TSE) at more than $5 on Monday.

CEO Kent Brown dismissed the $4.55-a-share offer, calling it "inadequate" and the timing "purely opportunistic."

The Canadian Hydro board, which unanimously recommended shareholders hold on to their stock rather than accept the TransAlta offer, concluded that the $654-million bid undervalues:

The company's team, "the most successful and experienced in the Canadian renewable energy industry;" the scarcity value of Canadian Hydro as a 100 per cent renewable power producer; Canadian Hydro's inventory of development proj- ects; renewable energy credits and carbon credits; Canadian Hydro's tax losses; and Canadian Hydro's contracts with buyers who have signed long-term power purchase agreements," CBC reported Friday.

The TransAlta offer is opportunistic because Canadian Hydro is growing quickly, will soon be able to finance some developments internally and its stock price is not tracking its intrinsic worth, the company said.

ssCHD was founded by brothers Ross and John Keating in southern Alberta 20 years ago when Ross Keating harnessed a stream to produce hydroelectric power.

Now it is described as: "one of Jantzi/Maclean's Top 50 Responsible Corporations in Canada"

From a relatively inauspicious beginning in 1989, it is "the largest and most diversified developer, owner, and operator of 21 renewable energy generation facilities in Canada totaling net 694 MW of capacity in operation, 185 MW in and nearing construction, and 1,624 MW in development. The renewable generation portfolio is diversified across three technologies (water, wind, and biomass) in Alberta, British Columbia, Ontario, and Quebec.

Nonetheless, CHD is small by comparison with TransAlta - which operates throughout Canada, the U.S. and Australia. TransAlta shares are trading at $21 (TA:TSX).

But its electric generation is mainly from coalfired generators, which might soon become things of the past because of global warming and rules against carbon emissions.

Still, the Canadian Wind Energy Association is concerned that development of wind energy in Ontario might be adversely affected by proposed setback rules which would increase the mandatory distances from residences and transportation corridors, as well as from lot lines.

The Toronto Star reported recently that CanWEA president Robert Hornung told Environment Minister John Gerretsen that "more than three-quarters of 103 advanced-stage wind projects will likely be affected if the new rules are enacted."

The Star quoted Mr. Hornung as saying that "79 construction-ready projects representing 2,591 megawatts" would either be rendered nonviable or have to be redesigned.

CHD was apparently in the process of preparing its own response to Ontario's Green Energy Act, but the person in charge was not reached for comment.