Lepreau deal will be safe: minister

Alan White
Saint John Telegraph Journal
March 5, 2002

Natural Resources Minister Jeannot Volpé expects NB Power to learn from Ontario Hydro’s experience, should it be given approval to refit the Point Lepreau nuclear generating station.

Atomic Energy of Canada Ltd. is offering to team up with NB Power to extend the life of the nuclear station beyond 2006. The $845-million refurbishment project, which doesn’t include having to spend $300 million on buying replacement power when Lepreau is offline for upgrading, would extend the life of the plant for 30 years.

However, nuclear watchdog Tom Adams of Energy Probe is warning the deal proposed to NB Power by AECL is “virtually identical” to one that saw Ontario Hydro have to write off $410 million that it couldn’t collect from AECL in promised performance guarantees in 1993.

Mr. Volpé said he doesn’t know how similar the Ontario Hydro contract is to the one being proposed to NB Power, but said he expects that “due diligence” by NB Power would protect the utility from the Ontario Hydro experience.

“I would imagine they won’t sign the same contract to get the same experience,” said Mr. Volpé. “I would imagine that once you’ve been through an experience where the contract wasn’t fully respected, the next one you try to put some clauses in there to make sure that this one will be respected.

“I don’t know the reason why AECL decided not to pay (in Ontario), but I would hope that NB Power, if they have permission to go ahead with the refurbishment, I would imagine they will make due diligence on it to make sure that their contract will be fully respected.”

Under the proposed agreement, government-owned NB Power and Atomic Energy would share the risks and benefits over the extended life of Lepreau.

The deal would see Atomic Energy pay penalties to NB Power when it fails to generate 80 per cent or more of its capacity. When the plant exceeds 80 per cent capacity, the parties would share the extra profits.

NB Power’s application to refurbish Point Lepreau goes before the Public Utilities Board in a hearing in May. The board will then forward its recommendation to the government, which will ultimately decide if the mega-project goes ahead.

“The question that was asked by Mr. Adams will probably be asked around the table when NB Power comes back to us,” said Mr. Volpé. “If we’ve got a contract out there, we would like to have a contract that will be respected by those who sign it.

“That is a good question and we’ll make sure we get all the necessary safety behind the agreement before we sign it.”

 

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