Canadian Press
CTV News
June 7, 2006

A team of companies lobbying to build new nuclear plants in Ontario say they’re willing to ensure any new reactors will be built on budget, though critics say it’s a misleading pledge that can’t be guaranteed.

Representatives of so-called "Team Candu," a group of five Canadian firms that includes federal Crown corporation Atomic Energy of Canada Ltd., say government officials have asked for price guarantees for new nuclear projects in an effort to avoid cost overruns under an energy strategy slated to be unveiled within the next week.

It’s expected the government will set the stage for a massive expansion of the Darlington nuclear site east of Toronto.

The initial cost to build the plant nearly tripled to $14 billion by the time construction was completed in 1993.

"The province wants a guarantee – a schedule and a fixed price," said Ken Petrunik, AECL’s chief operating officer who spent the last six years working on nuclear projects in China.

"We recognize that we need to step up and deliver and meet the requirements of the province, which is to transfer risk and be able to give a fixed price."

Energy Minister Dwight Duncan said Wednesday he will "very, very soon” announce a long-awaited government response to a report released in December by the Ontario Power Authority.

The report included recommendations for $70 billion in electricity generation spending over the next 20 years, more than half of it on nuclear projects.

Critics say cost guarantees by the nuclear industry are meaningless, pointing to past cost overruns at Darlington and the impact of future changes in government and political will.

"They’re not commercial guarantees, they are political guarantees," said Tom Adams of Energy Probe, an electricity sector watchdog.

"Because the nuclear industry is so highly dependent on political favours . . . changes in political favours could cause drastic changes in the outcome."

Petrunik said officials from AECL and four private firms, Babcock & Wilcox Canada, General Electric Canada, Hitachi Canada Ltd. and SNC-Lavalin Nuclear Inc., plan to meet with Duncan over the next two weeks to outline their fixed-price promise.

Candu will be competing with foreign companies for any government projects.

"We’ll take the load off the taxpayers,"said Martyn Wash, general manager of the Organization of Candu Industries.

"That’s a big difference between where we are right now, and when Darlington was first started back in the late ’80s."

But New Democrat Leader Howard Hampton said while the province might negotiate price guarantees, the federal government would have to cover cost overruns.

Ultimately, taxpayers would have to foot that bill, he said.

"At the end of the day, the people who live in Ontario will end up paying for this, either on their hydro bill through some kind of fee, or some other tax," Hampton said.

Observers widely expect Duncan will position the province to build up to 12,400 megawatts of new nuclear capacity by 2025. Much of that could involve refurbishments of existing reactors, but additional new capacity will most likely be required.

The amount of Ontario’s electricity generation supplied by nuclear power, however, would remain at about 50 per cent.

Darlington, with four reactors, was built to contemplate a Darlington "B” set of four more reactors.

The mayor of Clarington, which is near the Darlington station east of Toronto, has been lobbying for the project that would create thousands of jobs in his community.

"This whole discussion is all about Darlington B," said Adams.

Adams suspects the province has known that it wanted to expand the site for more than a year and that talk of public debate about the issue is mere "window dressing."

Duncan hasn’t said how much public input will be allowed after he responds to the OPA report, beyond voters casting ballots on that and other matters in the October 2007 election.

"Once we reveal our plan, it will be incumbent of me to go out and sell it," Duncan said, adding that "at the end of the day, an election will be a pretty important public consultation I would think."