NB Power pegs Lepreau cost at $845M

Bruce Bartlett
The Telegraph Journal
February 28, 2002

Lepreau the sequel will not go into cost overruns, like the original project, according to plans released by NB Power Monday.

When Point Lepreau came online in 1984, it cost NB Power $1.2 billion – well over the projected $300-million cost. On Monday the power company filed documents with the province’s Public Utilities Board, stating it wants to spend $845 million to refurbish the plant and add another 30 years to its life. The province has a clear choice to make by 2006: It can keep Lepreau at a cost of at least $1 billion or it can decommission the station for about $455 million. The $845-million upgrade bill does not include the cost of buying replacement power during the proposed 18-month overhaul, which would increase the total price tag of the project by about $300 million.

The nuclear plant has been under study for the past two years and 1,700 recommendations have come forward, said Ken Little, vice-president of regulatory affairs, Monday. “As a part of that we got a firm price from AECL (Atomic Energy Canada Ltd.) for all of the re-tubing work,” he said. Worn tubing has been the cause of many of the problems experienced at the plant over the past few years, which have caused numerous shutdowns. AECL will also act as the general contractor for the project, if it is approved. It will co-ordinate all the work that needs to be carried out.

Before the project can go ahead, the proposal still has to get a positive reception from the Public Utility Board, which will hold hearings in the spring; the Department of Environment and the provincial cabinet. But NB Power has 82 per cent of the proposed project under a firm price commitment at this point, said Mr. Little. At the same time negotiations are underway with labour groups to make sure there will be no strikes. “We have experience in using those agreements at Belledune and Dalhousie, where we had very successful construction projects,” he said. AECL will have the ultimate responsibility to see that the project works.

Tom Adams, executive director of Energy Probe, a national consumer and environmental watchdog in Toronto, said Monday the deal with AECL may protect NB Power but could place the federal taxpayer at risk. Engineers can make estimates about how long a particular job will take but all that can slip away once the work begins and unexpected problems are found, he said. The scope of a job can also change once it begins. “When they get into it, they can discover the regulator changes the rules, or it’s more complicated than they thought,” he said.

A third major unknown can be problems that arise when a plant restarts. Those problems don’t fit into the original budget of the project but can still cost a lot of money. NB Power has already experienced this at Point Lepreau with what Mr. Adams calls “maintenance induced disrepair.”

“What NB Power is proposing here is both technically and financially risky,” he said. A gas-fired power station with a larger output than Point Lepreau could be built for the same money, Mr. Adams contends.

 

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