Michael Petrou
National Post
July 12, 2000

British Energy PLC, Britain’s biggest electricity producer, is taking over Ontario’s Bruce nuclear power station in a lease arrangement with Ontario Power Generation Inc. in a deal worth as much as $3.5-billion over 43 years.

The Bruce Power Partnership, which is 95% owned by British Energy, will make an initial payment of $625-million, to be made in three installments of $400-million, $112.5-million and $112.5-million.

Annual payments, estimated to begin at $150-million in 2002, will continue until 2018, with an option to extend for 25 more years.

The deal is part of an agreement by Ontario Power Generation to reduce its generating capacity to no more than 35% of that available to the province 10 years after the market is privatized.

“We’re delighted,” David Gilchrist, executive vice-president of finance at Bruce Power, said yesterday. “We think it’s a significant milestone in the liberalization of the electricity market, which is going to be of enormous benefit to the Ontario energy consumer.”

Ron Osborne, president and chief executive officer of Ontario Power Generation, said the arrangement will result in more choice and lower prices for energy consumers.

“It’s a good (deal) for the customers because of the acceleration of the introduction of competition,” he said. “It’s important to the shareholder, to the province.”

The Association of Major Power Consumers in Ontario, an organization representing resource, manufacturing and processing industries, supports the deal.

“It will inject new thinking and efficiencies into the Bruce nuclear fleet, and introduce an important new competitor to Ontario Power Generation,” Arthur Dickinson, president of AMPCO, said in a statement.

But yesterday’s announcement prompted harsh criticism from environmental groups and Ontario’s Liberal opposition.

Under terms of the agreement, the British company will not be responsible for future liabilities, including waste storage and disposal, and decommissioning of the station.

These costs will be absorbed by Ontario Power Generation and will be paid for through the yearly lease. Norman Rubin, director of nuclear research at Energy Probe, an environmental advocacy group, said Bruce Power is leasing the plant to avoid future responsibility for cleanup and decommissioning costs.

“When it’s over, they can say, ‘Here, it’s toxic, it’s carcinogenic, it costs millions of dollars to clean up, and it’s yours,’ ” Mr. Rubin said. “We get to keep the garbage.”

Dominic Agostino, chief party whip for the provincial Liberal Party, said future liabilities “could ultimately be disastrous for people in this province.”

But president Ron Osborne remains confident Ontario Power Generation has struck a safe deal.

“We believe our estimates are more than conservative,” he said. “There’s more than enough funds to cover this.”