Huron Expositor, 2015-12-09, Page 1010 Huron Expositor • Wednesday, December 9, 2015
Updated: Bruce Power secures future with deal
Scott Dunn
Postmedia Network
TIVERTON - A massive
agreement between
Ontario and Bruce Power
will see the local nuclear
power operator refurbish
six of its eight nuclear
reactors, keep the site
operational until the
2060s, costing the com-
pany billions of dollars
and securing thousands
of jobs.
The Ontario govern-
ment announced Thurs-
day the updated agree-
ment between the
Independent Electricity
System Operator and
Bruce Power will generate
$6.3 billion in annual
economic benefits, secure
6,300 megawatts of clean,
reliable electricity while
making possible up to
23,000 jobs.
That's an estimated
18,000 jobs directly and
indirectly from opera-
tions and 3,000 to 5,000
more jobs annually
throughout the invest-
ment program of the
world's largest operating
nuclear facility, the com-
pany says.
"Today is a major mile-
stone in the history of
Bruce Power as we build
on our existing agreement
with the province and
extensive experience to
enter the next phase of
our site development,"
said Duncan Hawthorne,
president and chief exec-
utive officer of Bruce
Power, in a statement.
Ontario's 2013 Long -
Term Energy Plan, which
was updated in Septem-
ber, anticipated refur-
bishment at the Bruce site
and the Darlington
nuclear station would
begin in 2016. Bruce
Power has been negotiat-
ing the terms of this deal
for the past two years. So
the culmination of this
agreement was not really
in doubt.
"Notwithstanding that,
this is a massive deal for
the site," Hawthorne said.
"Without this agreement
we would have started
closing down Bruce B
units in 2018," reducing
the site to four reactors,
"and just progressively
fade away."
"To turn this policy
aspiration into a contract
is actually very transfor-
mational for the site
because means we can
plan our future on the
basis of a solid contrac-
tual arrangement," Haw-
thorne said.
The Ministry of Energy
said in a statement that
Bruce Power would invest
about $13 billion of its
own money and agrees to
take full risk of cost over-
runs on refurbishments of
the six reactors.
The agreement "means
a reduction in forecast
household electricity bills
by about $66 each year
over the next decade. The
contract also protects the
interests of electricity
consumers by ensuring
Bruce Power assumes full
risk for any potential cost
overruns or delays," the
statement says.
The province has an
opportunity in the agree-
ment to back out of the
deal if the costs are unsat-
isfactory. Conversely,
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Bruce Power would share
the benefits if, for exam-
ple, the plant produces
more power than pro-
jected. And if operational
costs are better than
assumed, "we will share
the upside," Hawthorne
said.
It's estimated the six
refurbishments will cost
$8 billion, plus an addi-
tional $5 billion in a
range of other reactor
life -extension activities
from 2016 to 2053, Bruce
Power said in a
statement.
Hawthorne said Bruce
Power would spend about
$1.5 billion a year for the
next 18 years with this
commercial agreement
now in place. Some of
that will be normal
spending and some to
replace the major compo-
nents of the units.
The plan calls for
"incremental" refurbish-
ments, starting with Unit
6 in 2020, not 2016 as ear-
lier anticipated in the
province's long-term
plan. Refurbishment will
add 30 to 35 years
operational life to each
unit, the company says.
But starting now and
through to 2020, Bruce
Power will invest about
$2.3 billion as part of
plans to keep all eight
units in operation. The
company also says the
agreement allows it to
add a combined 30 reac-
tor years of operational
life to the units before
refurbishment begins.
"Overall, over the
period (next 18 years) we
expect to spend more
than $20 billion," Haw-
thorne said.
The initial price paid
for Bruce Power's genera-
tion will be $65.73 per
MWh starting Jan. 1. The
average price over the life
of the contract is esti-
mated at $77 per MWh or
7.7 cents per kilowatt
hour.
"Both prices are within
the range assumed in the
2013 LTEP (Long -Term
Energy Plan) for refur-
bished nuclear energy
and are lower than the
average price of electric-
ity generation in Ontario,
which in Ontario was
$85/MWh," the ministry
statement says.
When Bruce Power was
formed in 2001, only four
units at the site were
operational. After a total
investment of about $7
billion, including close to
$5 billion on the refur-
bishment of Bruce A Units
1 and 2, which was com-
pleted in late 2012, the
site was again operating
at full capacity. Bruce A
Units 1 and 2 had been
expected to operate for
another 25 years, the
company has said.
Bruce Power produces
about one-third of Ontar-
io's electricity.
TransCanada announced
Thursday it will acquire an
additional interest in
Bruce Power for $236 mil-
lion from Ontario Munici-
pal Employees System.
Each hold a 48.5 per cent
interest in Bruce Power,
with the remainder held
by the Power Workers'
Union, The Society of
Energy Professionals and
a Bruce Power Employee
Trust.
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