Alan White
New Brunswick News
June 10, 1998

Consultant’s report says shutting down nuclear power plant next year would cost $3.13-billion

FREDERICTON – New Brunswick’s nuclear power plant has another 10 years of life and with an overhaul, could operate until 2032, reports a consultant hired by NB Power to assess its options for the aging facility.

The Point Lepreau generating station went online in 1983 with an expected decommissioning date of 2014, but the U.S. consulting firm Hagler Bailly concludes it will need refurbishment before then.

NB Power president James Hankinson, who made the report public during his appearance yesterday before the legislature’s Crown Corporations Committee, was encouraged by the outlook for the plant, which has had a spate of technical and human-induced problems in recent years.

“If you cast your thoughts back a year ago, there was an awful lot of uncertainty as to whether Lepreau had a future,” Mr. Hankinson said.

“What I’m hearing from the consultant is that we indeed have a good prospect for the next 10 years or so.

“The life is shorter than we originally thought and we may have to do a refurbishment around the year 2008, but in the next 10 years this is certainly the least cost alternative for NB Power.”

In the simplest analysis by the consultant, shutting down Point Lepreau in 1999 would carry a cost of about $3.13-billion over 33 years, with much of that related to the estimated cost of buying replacement power for the 635 megawatts of electricity generated every hour at Lepreau. The estimated cost of shutdown in 2008 would be $2.68-billion while the cost of a shutdown in 2020 is pegged at $2.58-billion. Closing down the plant in 2032 is the most attractive option financially, coming at a cost of $2.35-billion.

Consultant Alan Madian said the idea of refurbishing the plant with new pressure tubes, feeder pipes and a steam generator is very much “an open question.” He puts the refurbishing cost at between $550-million and $650-million, including the cost of substitute power, for a 18-month refurbishment shutdown.

Whether refurbishment is an option won’t be known for several years, as its feasibility could be affected by the price of natural gas and competition brought about by a deregulated power generation industry, when NB Power would no longer have a virtual monopoly to sell electricity in the province.

The consultants don’t recommend refurbishing the plant, only that NB Power plan on refurbishing the plant between 2005 and 2011.

“We think there is a significant possibility that it will be economically desirable to refurbish the plant and to keep it operating,” said consultant Alan Madian.

“We don’t think we know enough now to know whether that is going to be a preferred decision four of five years from now when the decision will have to be made.”

“We can’t make that decision today because there are many things that could happen in the next five to six years which will influence that decision,” Mr. Hankinson said.

“And, let’s be honest…we would have to demonstrate our ability to operate Lepreau [at a consistently high level] well before we would consider any sort of a refurbishment of the facility.”

Thomas Adams of Energy Probe, an NB Power critic and nuclear watchdog, said refurbishing Point Lepreau would be “an extremely high risk venture…You’re very unlikely ever to see that money back again. We’ve been down this road before.”

Mr. Adams said Ontario Hydro refurbished some of its reactors at Pickering between 1983 and 1989 using much the same analytical approach employed by Hagler Bailly.

“It cost us a couple of billion dollars. After the plants went back into service, they performed terribly. They had accidents, a couple of real close calls with the big boom.”

There were “rising costs, falling production and eventually Hydro pulled the plug on the whole thing and those stations are now shut down. Hydro’s hoping they might restart them some day, but that’s just a twinkle in their eye.”

Mr. Adams doubts Lepreau will even last until 2008, citing falling production in recent years as the plant has had to go off-line more and more often for repairs and maintenance.

“Age has eaten the reactors in Ontario. It has just chewed into them and made a mess of them,” Mr. Adams said. “New Brunswick has got basically the same machine. It’s just a little bit younger than the reactors that have been closed [in Ontario], but it’s going the same way.”

Mr. Adams approved of a recommendation by the consultants that NB Power use 2008 as the target date for having the necessary money on hand to shut down the plant. It will cost an estimated $300- to $400-million to decommission Point Lepreau and NB Power is not yet setting aside money for that eventuality.

“I think [the recommendation is] very prudent. It’s something we should be doing in Ontario and aren’t,” Mr. Adams said. “It improves the intergenerational equity so that we’re not passing costs off to future generations of ratepayers.”

Although 2008 comes six years before the expected decommissioning date of the reactor, ratepayers haven’t been short-changed six years worth of production, Mr. Madian told the Crown Corporations Committee. He noted that for much of its early life Point Lepreau exceeded production expectations and was regarded as the top-performing nuclear facility in the world, and that over-production would account for an extra couple of years worth of plant life.

Progressive Conservative committee member Jeannot Volpé questioned whether Point Lepreau’s problems today were a result of “trying to milk the cow without feeding it enough and now we’ve got a cow that’s pretty sick.”

However, Mr. Madian said it wasn’t accurate to depict Point Lepreau’s recent problems as the result of pushing the plant too hard in its early years.

“There is no evidence the plant is not properly maintained,” he said.

However, human error has contributed to the plant’s problems and Mr. Madian said there is certainly a “cultural issue” that may have been at play.

“Point Lepreau, for a number of years, was the best performing nuclear facility in the world,” he said. “If you are the best plant in the world, you may get pretty cocky. There was a culture at the plant that said it’s important to keep the plant up and running,” he told the committee.

“They may have taken some procedural shortcuts and those may have led to some of the incidents,” he said.