AECL, NB Power sue for $524M in reactor costs

NB Power and Atomic Energy of Canada Ltd. are suing an insurance company for $524 million to help cover some of the costs related to the delayed refurbishment of the Point Lepreau Nuclear Generating Station.

The companies have filed documents in a Saint John court claiming they're entitled to payments for damage and delay during the refurbishment of the nuclear plant.

The project is three years late and more than $1 billion over budget.

NB Power is seeking $320 million in damages and AECL is after $204 million in damages.

NB Power and AECL allege that their insurance policy with Lloyd's of London covers the reactor tubes that were damaged during the rebuild.

The Crown corporations also claim that the insurer should pay for hundreds of millions of dollars in extra costs caused by delays.

The insurance company denied a previous claim by NB Power and AECL last year.

NB Power's decision to seek funds from the insurance company is separate from the provincial government's ongoing attempt to get the federal government to cover the cost over-runs.

The New Brunswick government has blamed AECL for the delays in the project.

However, the federal government has balked at paying any extra costs.

Prime Minister Stephen Harper has repeatedly said the federal government would only pay the penalties outlined in the refurbishment agreements signed by NB Power and AECL.

The federal and provincial governments agreed to revised contracts in 2005 that outlined what costs would be covered in the event of any delays.

September restart planned

The nuclear reactor is now scheduled to start up again in September.

The main reason for the reactors delay has been the installation of the reactors calandria tubes.

All 380 new tubes were inserted in the reactor between December 2009 and April 2010. But dozens of the tubes failed air tightness tests after being fused with special inserts designed to hold them in place.

The tubes, which are about six metres long and 13 centimetres in diameter, contain the reactor's fuel channels and fuel bundles.

The calandria tubes were the first major pieces of equipment to be installed in the reactor as part of the refurbishment.