Bruce Power to spend $13B to refurbish 6 nuclear units

Bruce Power will spend $13 billion to refurbish six ofthe eight nuclear reactors at its generating station near
Kincardine, Ont., and assume all risks for cost overruns.

The Liberal government announced todaythat the agreement withBruce will delay the start of the 15-year refurbishment projectuntil 2020 from the original 2016 start date to squeeze more lifeout of the existing reactors.

Hydro consumers shouldn't be concerned about the four-year delay,because Bruce Power found "innovative ways" to extend the life ofits nuclear reactors, said president and CEO Duncan Hawthorne.

"There is a very positive and immediate price impact for theratepayer," he said. "Money spent later is obviously better forthe price of power."

The agreement will save $1.7 billion dollars from thegovernment's original plans, said Energy Minister Bob Chiarelli.

"Our updated agreement with Bruce Power secures 6,300 megawattsof emission-free, low-cost electricity supply," he said.

The price of electricity generated by Bruce increases to 6.57cents a kilowatt hour Jan. 1, 2016, and rises as each reactor isrefurbished to 7.7 a kwh cents by the end of the contract, or $77per megawatt hour.

"That's less than the average price of power in Ontario today at$83 per megawatt hour...30 per cent lower than the residentialrate," said Chiarelli. "So we're getting a hell of a bargain herein terms of price."

Average household will save $66 a year, government says

The government says the deal with Bruce will save the averagehousehold using 800 kilowatt hours a month of electricity about $66a year.

If the refurbishments come in under budget, Bruce Power, which isowned in part by TransCanada Corp., would get a share of thesavings.

Green Party Leader Mike Schreiner doubted six reactors could berefurbished for $13 billion because the contract is based onestimates of how much it will cost to do the work years in thefuture.

"We can't guarantee there will be no cost overruns passed ontoratepayers because we don't have a final price yet in thecontract," said Schreiner.

"The fact that no nuclear project in Ontario's history has everbeen delivered on budget or on time makes me think your pocket bookis under threat."

The Progressive Conservatives called the announcement positivenews following Wednesday's scathing auditor general's report thatfound Ontarians paid $37 billion more over eight years for theLiberal's electricity planning decisions.

"We've been calling for some clarity on nuclear refurbishmentfor some time," said PC energy critic John Yakabuski. "I am alittle concerned about what's going to happen with Pickering and thenumber of reactors that could be out simultaneously."

All units at Ontario Power Generation's Pickering nuclear stationwill be retired by 2020, and the province also plans to refurbishsome of the reactors at OPG's Darlington station starting near theend of 2016.

Both Hawthorne and Duncan said the agreement includes a specificschedule to stagger the work on the reactors to ensure an adequatesupply of electricity.

The New Democrats want the Ontario Energy Board to review theagreement with Bruce to make sure the power is actually needed.

"Anyone who was there for the auditor general's report yesterdayknows that simply leaving it up to the Liberal government to make adecision is not in the best interests of ratepayers," said NDPenergy critic Peter Tabuns.