September 9, 2003
The business of inspecting nuclear power plants in Ontario is being sold to the private sector, prompting concerns from industry critics about safety standards.
Ontario Power Generation – formerly the power-producing arm of Ontario Hydro – has reached an agreement to sell its inspection services division, a move that has been on the drawing board for months as a means to cut costs and boost profits.
The buyer is a three-member consortium of federally owned Atomic Energy of Canada Ltd. (AECL), engineering company Babcock & Wilcox Canada Ltd. and NNC Holdings Ltd., according to an internal OPG document obtained by the Star. OPG officials could not be reached for comment.
The deal is expected to close in two or three months, pending approvals from the Canadian Nuclear Safety Commission and the OPG board of directors. It’s also contingent on reaching an agreement to perform inspections at the Bruce Power nuclear plant near Kincardine on Lake Huron.
While NNC Holdings is a respected nuclear inspector in Britain, the Canadian Nuclear Safety Commission is likely to have questions about the participation of AECL, said veteran industry watcher Tom Adams of Energy Probe.
OPG has blamed the crown corporation for delays in restarting Pickering A, with one internal report saying many of AECL’s 400 staff on the project “had no, or limited, current experience” in Candu technology. AECL has said the blame is unfair because it was doing engineering design work on the project in lockstep with OPG staff.
“OPG has expressed serious reservations about AECL,” said Adams, who added he is not opposed to privatization of nuclear inspection services in principle because it has worked well in Britain.
Babcock & Wilcox is a worldwide energy services company whose U.S. parent is operating under protection from creditors because of costly asbestos liability issues, but its Canadian unit is not part of the filing.
The company’s U.S. operations were once cited in a U.S. government report for inadequate training that contributed to the nuclear accident at Three Mile Island in Pennsylvania in 1979, Bloomberg News reported.
“The bottom line is the partners OPG has found … are a real mixed bag,” Adams said. “I am concerned about this.”
On the Ontario election campaign trail yesterday, the Liberal energy critic suggested standards could slide with the 300-member inspection service in the hands of private enterprise.
“Public safety inspectors and Ontario Power Generation are ultimately accountable to the government and the Legislature,” said Toronto MPP Michael Bryant (St. Paul’s).
“I think people need to have confidence that their safety inspections are public and not private. You could create some kind of independent nuclear inspectors from OPG, but you’ve got to keep it public.”
Privatizing inspections contributed to unsafe drinking water in Walkerton and unsafe meat products from Alymer Meat Packers, Bryant added.
A sale price for the division was not mentioned in the OPG document, but it is likely that whatever OPG earns on the sale will be offset by inspection fees it will pay in future.
Information meetings on the sale were held last Friday for inspection division staff, many of them highly trained technical experts, who were asked to “please continue to focus on the work at hand and work safely,” in an e-mail from Pierre Charlebois, nuclear chief operating officer and chief nuclear engineer at OPG.
“Your continued support and patience during the transition period is appreciated.”
With files from John Spears.