Submission by Norman Rubin on behalf of Energy Probe before the Ontario Energy Board’s Integrated Power System Plan (IPSP)
Excerpt from Transcript January 18, 2008, EB-2007-0707 IPSP Issues Proceeding, Metro Toronto Convention Centre, Volume 5 Pages 2 – 14
January 18, 2008

MR.RUBIN: Madam Chair, my comments deal with issues
concerning nuclear power, and we offer them to urge this Board to do two
things: To stipulate and construe the
nuclear issues as broadly as possible; and, in particular, to seek mechanisms
to ensure that Ontario ratepayers and taxpayers are protected from the peculiar
risks presented by nuclear power.

In our submission, most people and many documents, including even some of the IPSP
documents, are either confused or misleading on the definition of base load
power, and we believe this has important ramifications for your decisions.

Specifically,there is a notion abroad that base load means 24/7 and, therefore, that base
load stations are and must be unusually reliable stations.If anything, the contrary is closer to the truth.

Nuclear generators, indeed, produce base load power.They are subject to both planned and unplanned or forced outages, whichoccasionally last for years, and they are both technically and financially
resistant to being dispatched for the grid’s convenience.

As a result, their output, like base load power in general, is clearly much less
valuable to the electricity grid and its customers than power from more
reliable and more dispatchable sources, including, for example, coal, natural
gas and peaking hydroelectricity.

A grid can in fact easily operate reliably with 100 percent flexible, reliable
and dispatchable capacity, the kind of capacity we might call peaking
capacity. But it is unlikely to survive for long with 100 percent inflexible, less reliable and non-dispatchable capacity, the capacity we generally call base load capacity.

By the same token, a grid can accommodate a fair share of unreliable or
intermittent base load capacity, provided that it has enough reliable and
dispatchable capacity to fill in when the wind won’t blow or the sun won’t
shine, or the uranium won’t fission or won’t fission safely.

In fact, the only rational reason to build even a single base load station, a less
reliable non-dispatchable generating station, is to save money, to lower the
total cost of the system, by which we mean financial and non-financial costs.

OPG and Bruce Power are currently receiving more per kilowatt-hour for their base
load nuclear power than OPG receives for its more reliable dispatchable and
clearly more valuable coal-fired power.

This is true even after a very significant portion of the costs of building those
nuclear plants has been excluded from electricity rates and is handled by a
separate fee on our bills.

Clearly, the past decisions to build Ontario’s existing nuclear plants, decisions that were all made without the benefit of a single reference to the Ontario Energy Board, did not lower the
total financial costs of our electricity system, despite promises from all
official participants to the contrary.

These decisions raised costs, and continue to raise costs, as only a very few
independent parties predicted at the time, including of course Energy Probe.

Incidentally we expect that the management of nuclear waste will continue to produce further
cost overruns for a very long time in the future.

Two main factors account for almost all of the excess costs of today’s nuclear
power.A great deal came in the form of cost overruns in the difference between low estimated or promised capital costs and the much higher actual as-delivered costs, and much of the rest came and continues to come in disappointing performance.

Reactor and reactor component reliability and durability, the cost of maintenance and
refurbishment, these have all been very significantly worse than their forecast
or promised values. Predictions that have now been revealed as wildly optimistic were clearly responsible for convincing Ontario Hydro and the government to commit to a supposedly cost-lowering, supposedly inflation-proof investment, that actually raised costs by many billions of dollars, and continues to do so.

Even our most recent experiences with the refurbishment of a number of nuclear
plants that were fully constructed and paid for many years ago have led to
another series of broken promises and further cost increases for ratepayers.

In another hearing before this Ontario Energy Board, OPG is currently applying for
another substantial increase to its compensation for nuclear generation and for
a 25 percent off-loading of the financial risk of further broken nuclear
promises.

They say they are just responding to their real world nuclear costs and to the risks
posed by their nuclear capacity.

In addition to the multi-billion dollar rate impacts of all of these broken
promises, they have also presented very serious challenges to the reliability
of Ontario’s grid, challenges which have been bearable, in part, because of
some lucky weather timing, and, in the main, because of Ontario’s large surplus
of coal-fired generating capacity, an insurance policy that we are told will
definitely not be available during the operating lifetime of the next round of
new or refurbished nuclear plants.

And I note, as a sidebar, that Ontario’s unfortunate decision to let most of Ontario’s
coal-fired stations continue to operate using outmoded and highly polluting
technology can also, in our submission, be attributed to false promises of high
nuclear reliability.

In these proceedings, OPA is before this Board promising the sort of nuclear
plants that Ontario has frequently seen on the drawing board but has never once
seen in real life, low cost, high reliability, long lifetime, easy-to-maintain
nuclear plants, plants which we are now assured will actually lower the cost of
power compared to all of the available alternatives.This time we are assured will be different.

Given this consistently painful and embarrassing pattern of false nuclear promises
swallowed whole, given the remarkable similarity of today’s nuclear promises to
those from decades past that have now proven so baseless, and given the fact
that the Ontario Energy Board now has its first chance, ever, to apply this
Board’s independent, transparent, multi-stakeholder, and technically deep
process to this enormously important matter, this proceeding, in our
submission, must provide assurances, ironclad assurances, that if the Ontario
grid is to be committed to the construction of new or refurbished nuclear
capacity, then the real world, as-delivered cost of that nuclear power to
Ontario ratepayers must actually lower the total costs of the system, and the
financial and grid-security risks of it failing to do so, whether from biased
forecasting, misleading bait-and-switch claims, predictable surprises,
technological obsolescence, broken promises, abbreviated lifetimes or
disappointing reliability, or whatever, those risks must be borne in their
entirety by private investors, and not by Ontario ratepayers or taxpayers.

We are long past the point, in our submission, where the enormous risks of broken
nuclear promises can be considered theoretical or even unlikely.

As another sidebar, Madam Chair, because Ontario provides close to a third of Canada’s federal tax revenue, any guarantees from Atomic Energy of Canada Limited which simply shift risks to Canadian taxpayers do not, in our submission, provide an adequate or just solution to this problem.

The failure of this Board to deal with these issues in depth and to deliver those
essential assurances or to compel OPA to do so, in our submission, would risk
dwarfing and subverting the potentially enormous positive impact of all the
remaining decisions made in this proceeding.

We believe it is vital that this Board and this process have the ability to ensure
that essential outcome, and we urge you to include that consideration in your
decisions about issues.Thank you.