The Telegraph Journal
April 5, 1997
Projected profit turns into $70-million loss thanks to Point Lepreau shutdowns
FREDERICTON – Facing Canada’s nuclear watchdog, NB Power admitted it did not see warning signs of trouble at Point Lepreau.
It told the Atomic Energy Control Board it did not keep itself up on advancements in the nuclear industry and its staff may not have kept up to standards. Saying it may be blinded to its own performance problems, it pledged to hire a consultant to turn Point Lepreau around.
And NB Power president Jim Hankinson told the regulator that shutdowns at the plant have hurt the utility’s bottom line by $70-million. “We will now report a loss rather than a planned profit,” Mr. Hankinson said. His appearance before the board in Ottawa this week was considered unusual – nuclear operators usually send plant managers to give updates.
The board that served NB Power notice last year that it was concerned about safety standards at Point Lepreau and it wanted six-month updates on what the provincially-owned utility was doing about it.
Several officials joined Mr. Hankinson during meeting with the five-member board Thursday – the same day the nuclear station near Saint John began pumping electricity again after a 75-day shutdown costing an estimated $40-million.
Peppered with questions by board members about safety and operating procedures, NB Power officials assured board members steps were being taken to improve the situation.
In a written brief to the board, the utility outlined plans that included workshops on improving the safety-consciousness of the plant staff, changing procedures for repairs and encourage communication between staff and management. “Recent events have shown that we did not identify and respond to the precursors that indicated a falling off of performance,” NB Power said in the 18-page brief. “Moreover, we did not keep abreast of opportunities for improvement that had been undertaken by others in the nuclear industry. Performance in some areas may have lacked the necessary and expected quality,” the brief said. “Other factors which influenced the success of the organization included plant ageing, staff turnover, fiscal restraint and growing backlogs.”
The shutdown in mid-January was caused by a leak near the station’s reactor core. Staff later discovered that one of the 360 feeder pipes at Lepreau had been left unlocked at one end, causing a crack in the pipe. It cost $7-million to repair the leak and about $450,000 a day to replace power while the plant sat idle.
One NB Power critic was taken aback yesterday to learn the losses for that shutdown and an earlier one would set back the utility by $70-million – and dashed its earlier forecast of a profit for last year of more than $30-million.
“That’s a huge swing,” Energy Probe official Thomas Adams said in a brief interview from Toronto yesterday. “I think that it is going to mean a rate increase of above the three per cent.” NB Power had set the three per cent hike for this year as part of a five-year plan. Meanwhile, the utility told the board it would hire a consultant to help turn around safety and operating performance at the 14-year-old nuclear plant. It is expected the consultant will be from the United States.
“We recognize that when you get into a situation where you are having performance problems, it is difficult to see clearly what the problems are, since you are part of it,” nuclear division general manager Rex Johnson told Dow Jones news service.
Government ignored cries early this year from Conservative Leader Bernard Valcourt to bring in a consultant to evaluate NB Power.
Reached yesterday, Mr. Valcourt expressed concern about the admissions about lack of quality and performance at the plant that NB Power made its brief to the board. “Do you want a straighter mea culpa than that? That admission by management is just appalling,” Mr. Valcourt said from his office yesterday. He believes the admission continues to raise questions about safety. “We’re talking about pipes that are thinning, we are talking about leaks of nuclear water. Is that not safety? Of course it is,” he said. “And if these guys were ignoring warning signs because of complacency, I wonder whether it is complacency or competence.”
Last September, the plant was shut down for just over a month when engineers discovered that pipes inside the boilers had corroded and needed to be replaced immediately. It cost an estimated $6-million in repairs and $22-million to buy electricity the plant would have generated. Utility officials could not be reached late yesterday.