DALLAS - Texas-based Mesa Power Group says it has filed a legal challenge to Ontario's green energy regulations governing wind projects, claiming they violate Canada's trade agreement with the United States and Mexico

The company announced Thursday that it has initiated the first step in a claim for alleged violations of the North American Free Trade Agreement that have affected Mesa Power wind projects in western Ontario.

It said Canada failed to meet its international law obligations contained in NAFTA because of Ontario's Green Energy Act and subsequent Feed-In Tariff Program.

Although the complaint centres on a provincial policy, Canada's international trade negotiations fall under federal jurisdiction. The NAFTA pact allows for private companies to challenge governments before a dispute resolution panel.

Mesa executive Cole Robertson said the company was surprised by last-minute rule changes to the Ontario Power Authority process that allowed wind projects to move from one region to another and be connected by transmission lines.

"This clear favouritism disadvantaged Mesa, as well as other wind developers and clearly violates the spirit, goals and objectives of the North American Free Trade Agreement," he stated in a news release.

In addition to a series of NAFTA violations, Mesa said Ontario's "buy local" contract requirements gives preferential treatment to players such as Korean-based Samsung C&T.

Mesa said its wind projects are among the most advanced in Ontario, with two having completed environmental studies. It said they can be in operation by the end of 2012.

It also has a firm agreement to purchase wind turbines and has selected an engineering and construction firm that would have quickly created jobs in the province.

Mesa said other projects that received contracts under the disputed rules will take years to complete and have "unnecessarily long transmission lines."

Mesa Power said it expects to file a formal NAFTA Notice of Arbitration after Oct. 3 to formally begin an international arbitration to review government actions.