Financial Times – U.K.
September 10, 2002
The financial crisis at British Energy, the U.K. nuclear generator, has raised concerns over the long-term safety of the Bruce Power nuclear facilities in Ontario and over a possible supply crunch in the province’s energy market, according to Toronto analysts.
British Energy owns just more than 82 per cent of Bruce Power, which operates four nuclear generators under licence in Ontario, and is working to bring two mothballed nuclear generators back on stream. Canadian uranium miner Cameco owns 15 per cent of Bruce.
The concerns come as the Canadian Nuclear Energy Commission, which regulates the industry, was on Tuesday reviewing Bruce Power’s ability to meet financial guarantees that cover its obligations in the event of a shutdown for safety reasons.
The commission wrote to Bruce Power last month expressing concerns over the C$222m (U$144m) safety guarantee in the light of British Energy’s problems. The commission is also due to conduct its mid-term review of Bruce Power’s overall compliance with its two-year licence this week.
The Canadian regulators appear unlikely to revoke the licence any time soon. “There does not appear to be any urgency. Bruce Power is operating safely,” said Michel Cleroux, commission spokesman.
However, Toronto-based energy think-tank Energy Probe has written to the commission urging it to tighten safety inspections at Bruce Power.
“We are concerned that British Energy’s financial problems might put pressure on safety spending at the Bruce installations over the long term,” said Tom Adams, executive director of Energy Probe.
Bruce Power has assured the Ontario government that it “will continue to meet all its regulatory and financial commitments,” according to John Baird, provincial energy minister.
Under the terms of its lease, Bruce Power must make annual payments to the province rising from C$62m in 2001 to C$92m in 2018. It also faces debt repayments of C$112.5 million plus interest in both 2005 and 2007.
While Bruce Power appears to be in no danger of not meeting current financial commitments, efforts to bring two mothballed reactors back into service could be delayed by the crisis at its parent. Costs of the restart have already escalated this summer from an estimated C$340 million to C$400 million.
“Those expenditures represent an additional cost drain on the parent and I would not be surprised to see some delay in restarting those units,” said Mr Adams.
Any delay in restarting the reactors, due to take place in April and in the summer of 2003, would deprive the already over-stretched Ontario system of much-needed power. This July and August saw record-breaking demand for power.
To read the letter Energy Probe wrote to the Canadian Nuclear Energy Commission, please see: http://www.energyprobe.org/energyprobe/index.cfm?DSP=content&ContentID=5363.