Janet McFarland
Globe & Mail
July 13, 2000

God knows there’s no defending Ontario Hydro’s safety record managing its nuclear facilities. But British Energy’s track record isn’t spotless either, and Canadians need to carefully monitor the province’s first effort at hiring a private company to manage a nuclear plant.

The British are way ahead of Canada in the privatization game. British Energy, now a publicly traded company, runs eight nuclear sites in Britain and has signed deals with an American partner to buy five nuclear plants in the United States.

On Tuesday, it announced its first Canadian contract, an 18-year lease to operate the Bruce nuclear plant in Ontario. British Energy owns 95 per cent of the new company established to run the plant, while two unions that represent nuclear power workers own the rest.

The British experiment at nuclear power privatization has been rocky. The biggest black eye for British Energy, which was established in 1996, was the leak last August of a confidential report by Britain’s Nuclear Installations Inspectorate (NII) — the government nuclear regulator — that said BE’s relentless quest to cut costs and boost profits had led it to severely cut staff levels in its nuclear plants.

Since 1996, BE has cut 1,500 jobs or 20 per cent of the work force, including many operating positions in the plants. Some have been replaced by outside contractors.

The NII said this was a threat to safety at the nuclear plants. The inspection report said the staff cuts were done on the assumption that there would be less safety work required in a privatized company, but instead the experience has shown no reduction in workload.

In a number of key safety areas, such as fire protection, BE now has just one specialist for eight different nuclear sites, the report says. It said there is no longer anyone working in the area of severe accident analysis.

The report cites a "widespread attitude" that the top priority was on electrical output and that it was acceptable to delay less immediate safety work. It faults management for not fully appreciating the difference between nuclear and conventional utility management.

Since last August, BE has indicated it still plans more layoffs. However, it has been prohibited by the NII from making further major cuts in key staff areas. Meanwhile, the NII says many if not most employees at the plants are working substantial overtime, and said the actual levels of overtime have been underreported by BE.

In Canada, BE has offered jobs to all 3,500 people working at the Bruce plant. The union partnership at Bruce has already ensured that BE has the unions on side, which could indicate we will not have the same cuts here — at least in the short term.

In the United States, there has been strong opposition by environmental groups to the AmerGen Energy Co. partnership (half owned by British Energy and half by Peco Energy Co.) that owns or is buying five nuclear facilities. Four environmental and anti-nuclear groups, for example, have conducted a campaign to prevent AmerGen from buying the Vermont Yankee nuclear station, citing concerns that safety will be compromised by private ownership. They have extensively quoted the NII report to support their safety criticisms about British Energy.

Nuclear watchdog Energy Probe in Toronto says it does not oppose private management by British Energy. Indeed, nuclear research director Norman Rubin says Ontario Hydro did too poor a job to advocate keeping it in charge.

All faith was swept away in 1997 with the release of a damning report commissioned by the hydro utility, which called the nuclear operation a rogue division that shrugged off serious safety problems. In the report’s wake, Ontario Hydro shut down seven of its 19 reactors, while chief executive officer Allan Kupcis resigned after accepting responsibility for the fiasco.

There’s no evidence to suggest British Energy will do a worse safety job than Ontario Hydro. But there must surely be some time spent acknowledging the British problems.

Ontario residents have been shaken by the Walkerton E. coli crisis and the message it sent about poor monitoring of privatized water testing. This is not the best time to sell the safety merits of privatized nuclear plants. The only way for the Ontario government and the federal nuclear regulator to reassure the public is to openly acknowledge the risks and to learn from the safety concerns in other jurisdictions. British Energy has to earn our trust.