The Lucknow Sentinel, 2015-12-09, Page 66 Lucknow Sentinel • Wednesday, December 9, 2015
Troy Patterson/Kincardine News
At $13 billion, Bruce Power has signed the largest nuclear power deal in history with the Ontario government, securing 6,300 WM of power and a refurbishment program that will begin rolling out with Unit
6 reactor work commencing in 2020. Pictured: Bruce Power president and CEO Duncan Hawthorne addressed staff at the Bruce Power administration centre on site Dec. 3, 2015.
Bruce Power secures future with $13 billion deal that will impact region
Scott Dunn
Owen Sound Sun Times
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 opera-
tional until the 2060s, costing the
company billions of dollars and
securing thousands of jobs.
The Ontario government
announced Thursday the
updated agreement 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 elec-
tricity while making possible up
to 23,000 jobs.
That's an estimated 18,000
jobs directly and indirectly from
operations and 3,000 to 5,000
more jobs annually throughout
the investment program of the
world's largest operating nuclear
facility, the company says.
"Today is a major milestone in
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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, presi-
dent and chief executive officer
of Bruce Power, in a statement.
Ontario's 2013 Long -Term
Energy Plan, which was updated
in September, anticipated refur-
bishment at the Bruce site and
the Darlington nuclear station
would begin in 2016. Bruce
Power has been negotiating 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," Haw-
thorne said. "Without this agree-
ment 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
u
transformational for the site
because means we can plan our
future on the basis of a solid con-
tractual 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 overruns 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 inter-
ests of electricity consumers by
ensuring Bruce Power assumes
full risk for any potential cost
overruns or delays," the state-
ment says.
The province has an opportu-
nity in the agreement to back out
of the deal if the costs are unsat-
isfactory. Conversely, Bruce
Power would share the benefits
if, for example, the plant pro-
duces more power than
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projected. And if operational
costs are better than assumed,
"we will share the upside," Haw-
thorne said.
It's estimated the six refurbish-
ments will cost $8 billion, plus
an additional $5 billion in a
range of other reactor life -exten-
sion 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 components of
the units.
The plan calls for "incremen-
tal" refurbishments, starting with
Unit 6 in 2020, not 2016 as earlier
anticipated in the province's
long-term plan. Refurbishment
will add 30 to 35 years opera-
tional life to each unit, the com-
pany 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 opera-
tion. The company also says the
agreement allows it to add a
combined 30 reactor 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 generation will be $65.73
per MWh starting Jan. 1. The
average price over the life of the
contract is estimated 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
refurbished nuclear energy and
are lower than the average price
of electricity generation in
Ontario, which in Ontario was
$85/MWh," the ministry state-
ment says.
When Bruce Power was
formed in 2001, only four units at
the site were operational. After a
total investment of about $7 bil-
lion, including close to $5 billion
on the refurbishment of Bruce A
Units 1 and 2, which was com-
pleted in late 2012, the site was
again operating at full capac-
ity. 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 Ontario's
electricity.
TransCanada announced
Thursday it will acquire an addi-
tional interest in Bruce Power
for $236 million from Ontario
Municipal Employees System.
Each hold a 48.5 per cent inter-
est in Bruce Power, with the
remainder held by the Power
Workers' Union, The Society of
Energy Professionals and a
Bruce Power Employee Trust.