National Post
December 5, 2003

 Toronto: The Liberal government is looking into lucrative bonuses paid to three top executives at Ontario Power Generation who were fired Thursday after a report blamed them for massive cost overruns in rebuilding Canada’s largest and oldest nuclear plant.

"We’re going to do something about it," Energy Minister Dwight Duncan said Friday, the day after the government fired chief executive Ron Osborne, chief operating officer Graham Brown and chairman William Farlinger.

Osborne received $100,000 in 2002 on top of his $850,000 salary, while Brown collected $865,000 in addition to a salary of $750,000, The Globe and Mail reported Friday.

Farlinger earned a $250,000 salary but his bonus was not revealed.

Duncan said he was "astounded at the bonuses and so on that have gone on."

The province moved swiftly Thursday to take control of the province’s giant electricity generating utility after a scathing report into the refit project at Ontario’s Pickering nuclear generating station.

The report blamed poor management for the cost overruns at Pickering, the restoration of which it said could end up costing $4 billion and take another five years.

The compensation packages are not subject to Ontario’s freedom of information laws, but Duncan said he plans to change that with an amendment next week.

"I can’t understand for the life of me how you get paid bonuses when a project of this magnitude and importance has been so poorly handled," Duncan said.

"I don’t get that, nor do the people who sent me here. That’s what we’re trying to fix."

In 1997, four units at Pickering A just east of Toronto were taken offline for safety reasons. Work to get them running again began in 1999.

Only one of the four units has returned to full service and that happened only in the last couple of months – more than two years late.

The cost to restore that unit was $1.25 billion – almost triple the original estimate of $457 million.

Brown’s and Osborne’s contracts stipulate they are owed one year’s salary and an amount equal to the previous year’s bonus if they are terminated without cause.

However, Duncan said he was leaving the problems of bonuses and severance up to government lawyers to negotiate, and wouldn’t say whether the government will claw some of the money back.

"We’re looking at a number of options," he said.

During a luncheon speech to the Toronto Board of Trade, Duncan said Ontario will have to rebuild virtually its entire electricity generating capacity over the next 20 years.

He said his top three priorities are "supply, supply and supply," but he didn’t offer any detailed plans.

Tom Adams, director of power watchdog Energy Probe, said Duncan’s speech exposed the fact the new government still doesn’t know where it’s going to get all that extra power.

"I think what they’re signalling is they’re not quite sure where the solutions are, but they’ve covered the waterfront: conservation, pricing, new supply and private sector (participation)," Adams said.

"There’s all the elements of a plan, without a plan."

The time is now to plan upgrades in order to meet future demand, Duncan said.

"We’re dependent on the hottest and coldest days of the year on power from outside of Ontario," he said.

The province’s nuclear plants are unreliable and there aren’t enough alternative sources to guarantee supply, he added.

There’s still no decision on whether the province will press ahead with efforts to get Pickering fully back in service.

Duncan promised more announcements next week on the future of Pickering’s three other reactors and a new interim board of directors at the utility.