Canada’s taxpayers will cop the grand money loser of nuclear reactor

As with most of what happens in the nuclear power industry, the facts will likely never be known. One certainty, however, is that this is another battle over which level of government will assume most of the risk in building and refurbishing nuclear power plants.

The nuclear blowout over AECL Financial Post, Terence Corcoran:, 19 Jan 2011, “…………A money loser on a grand scale, AECL was put up for sale by Ottawa almost two years ago. Few buyers emerged. By last December, Bruce and SNC were said to be the only prospects Ottawa and its advisors were willing to deal with. A few days ago, news leaked that SNC and Mr. Hawthorne’s company had pulled out of negotiations, creating a vacuum the politicians immediately filled with hot air.

Finance Minister Jim Flaherty, asked to comment on reports that Bruce and SNC had abandoned AECL, said the future was up in the air in part because of Ontario’s foot-dragging on building a new nuclear plant at Darlington, current site of one of Ontario’s nuclear facilities. “As you know, there’s been a … great deal of delay by that government with respect to Darlington,” he said.

In response, Ontario’s Energy Minister, Brad Duguid, said Mr. Flaherty’s comments were “both rich and hypocritical.” He said it was Ottawa that had rejected Ontario’s proposal to build a 2,000 megawatt nuclear plant. The conflict escalated on Thursday when media reports said Ontario Premier Dalton McGuinty charged that Ottawa has been standing in the way of a deal between Ontario and AECL to build the new Candu plants at Darlington.

As with most of what happens in the nuclear power industry, the facts will likely never be known. One certainty, however, is that this is another battle over which level of government will assume most of the risk in building and refurbishing nuclear power plants. If Bruce Power walked away, it is likely because Mr. Hawthorne’s three main shareholders don’t like the risk. Those shareholders are the uranium mining company Cameco, the utility TransCanada, and OMERS, Ontario’s municipal employees pension plan.

Two of those shareholders, TransCanada and OMERS, are already on the hook for $12-billion to refurbish six of Bruce Power’s existing nuclear power units. While that risk is somewhat covered by a guaranteed price for electricity that rises to 7.5¢ a kilowatt hour through a 40-year deal, it still means riding a risk on whether future Ontario governments are going to be able to meet their obligations. Taking on a new plant project, with costs in the tens of billions, would make Bruce and its shareholders even more dependent on government backing at even higher electricity rates.

Adding to the risk is Ontario’s official lukewarm attitude toward new nuclear power. The government’s so-called Long Term Energy Plan, released late last year, seemed at times to be saying that new nuclear might produce “undesirable” consequences…………
AECL, a cash drain, is therefore caught between two levels of government that are trying to either get out of the business of supplying more subsidies to a money-losing operation

Terence Corcoran: The nuclear blowout over AECL | FP Comment | Financial Post