Tom Spears
The Ottawa Citizen
August 30, 1997

Way back in 1981, a tiny research outfit in Toronto wrote to the chairman of Ontario Hydro, warning that nuclear megaprojects would cost Ontario dearly. Energy Probe warned of cost overruns in building nuclear plants, uncertain future demand, growing debt, competition from cheaper power sources, and reactors that might not run as perfectly as the glowing forecasts claimed. It’s been proven right on all counts, bearing out two decades of warnings that nuclear stations were financial messes.

Hydro announced this month the shutdowns of eight reactors and publicly attacked its own nuclear cult.

And costs did balloon, as Energy Probe forecast. Darlington was supposed to cost $3.5 billion to build; the actual cost was $14.3 billion all of it added to Hydro’s long-term debt.

But back in 1981, Hydro chairman Hugh Macaulay was in no mood to listen. He accused Energy Probe of scare tactics, and claimed that high inflation would cover the expense of building Darlington. To put it in perspective, he wrote, someone currently earning $25,000 a year will be making nearly $100,000 a year in the year 2000 just through inflation.

Well, maybe not.

Through Ontario’s age of nuclear expansion, with 20 nuclear reactors producing two-thirds of our electricity, Energy Probe has been the only constant voice of opposition.

The organization is mainly two people (plus one part-timer and some volunteers). Norm Rubin, 52, is the one who wrote to Mr. Macaulay. He’s a transplanted Bostonian with a mixed background in physics and music from MIT. Tom Adams, 36, is the other half, a Nepean native with a BSc in agriculture and a master’s in environmental science.

That’s all there is to Energy Probe. "It’s the Norm and Tom Show," Mr. Adams says.

The two of them have ignored the easy, sky-is-falling anti-nuclear warnings and produced analyses that have accurately found nuclear weak spots time and again.

Mainly those are based on money. For instance, they dug through Hydro data as Darlington was delayed in the early 1990s, and found that the delay was costing $27 million per month in interest charges alone for each of Darlington’s four reactors.

Ontario has now seen an unlikely shift of views, with the mainstream edging towards Probe’s views as nuclear troubles keep driving the price of power up and dependability down.

"In a lot of ways we’ve always been close to heartland values," said Mr. Rubin.

The public never felt comfortable with nuclear power, he believes, but people didn’t really criticize as long as no problems were apparent at the nuclear plants.

Hydro now acknowledges it mismanaged its nuclear plants in the early 1980s, making them look artificially good. It kept them running at high power without stopping to do maintenance that the reactors needed, like a taxi driver who never changes the oil because he might miss a fare.

"They bet the farm on nuclear," Mr. Rubin says.

By the early 1990s, the nuclear stations were having a lot of down time. On average, they were lucky to run at 70 per cent of full output. And as costs rose, these were passed on to the customers. Hydro’s prices rose by 19 percentage points more than the rate of inflation in the first three years of this decade.

Hydro’s debt soared from $14 billion before building Darlington to $36 billion afterwards.

That’s when Probe started to attract unlikely fans economists and investors. One of the most visible was an influential Wall Street investment newsletter called Grant’s Interest Rate Observer. It sent a researcher to Ontario late in 1992 to review Ontario Hydro’s double-A bond rating, and interviewed Mr. Adams along the way.

"Ontario Hydro is going bankrupt," he told Grant’s. "They’re backstopped by the (electrical) monopoly, which gives them the right to screw the taxpayer." He argued that lack of accountability to shareholders and unlimited loan guarantees by the province of Ontario had made Hydro reckless with money. In an article called The Ugliest Double-A, Grant’s concluded: We are with Adams.

The newsletter warned investors not to buy Hydro bonds. What is the best thing to happen to a bondholder? As always, the payment of interest and principal. And the worst thing? Don’t ask, it said.

That publication was one of the early signs that Mr. Rubin and Mr. Adams, with a combined salary of less than $75,000, had their fingers closer to the pulse than all the people in Hydro’s headquarters.

The Grant’s piece was part of the process of making Energy Probe appear credible to a group of people who had never considered an environment group credible, says Mr. Adams.

He followed up by addressing economists at the Chateau Laurier in mid-1993, telling them Hydro had run up its debt unwisely.

If he had said that 10 years earlier, one economist told him, people would have thrown food at you.

Later that year the Canadian Journal of Business Economics published his analysis of the trouble at Hydro.

Though it’s within walking distance of Hydro’s monolithic glass tower, Energy Probe’s office is in another world.

The 1920s brick building was first a parish hall, then a church, then a temple for two successive Jewish congregations, then an art school.

Nestled on Toronto’s Brunswick Avenue, a block from the coffee houses and used clothing stores of Bloor Street West, the office is shared with the union representing Toronto’s library staff.

Shade trees are all around; even a sundial is in the shade. Conserving solar energy?

Inside, boxes of papers and shelves of files are Probe’s long-term memory. They show fascinating changes in the nuclear business.

Then there’s Hydro’s secret proposal to cause intentional power blackouts in the late 1980s, to persuade the public that Ontario needed more nuclear stations. (Probe made that proposal public, and Hydro hustled to reply that it came from an outside consultant, not Hydro staff.)

There are also forecasts by Hydro showing that show electrical demand rising by seven per cent every year. It didn t; in fact it fell slightly in the recession.

And there’s Mr. Macaulay’s 1981 letter.

"He was in a position to see and saw none of it," says Mr. Rubin.

"And ran right into the brick wall," says Mr. Adams.

There are also revised costs analyses from Hydro. Oddly, as the actual cost of providing electricity has risen, the theoretical costs in these analysis is shown to fall. That makes more nuclear stations look good on paper.

"And you ask yourself, What’s wrong with this picture?" Mr. Rubin says. Now Ontario has launched a select committee of the legislature to examine what went wrong in the nuclear stations.

"I’m nervous it will detract from the urgent task at home (by creating) more research and less action," Mr. Rubin says.

He wants to see greater competition in place of Hydro’s monopoly right to sell electricity in Ontario. That, he says, will bring smaller cogeneration plants, where steam that powers a factory also runs a turbine generator and makes electricity. One fuel does two jobs at once.

He also warns Ontario shouldn’t let Hydro spend a further $2 billion to upgrade its remaining reactors at Bruce and Pickering after its closes the first eight.

If it’s such a terrific investment, he argues, then the Hydro employees pension funds should be investing heavily in it.

Suddenly, with the shockwaves that flattened eight reactors still rumbling, everyone is calling Probe. Mr. Rubin has been in front of a lot of TV cameras, on CBC’s Cross-Country Checkup, and in newspapers from all over. And everyone’s wondering whether the latest nuclear troubles make him happy.

"Yes and no," he says. "You have to fight yourself to keep from feeling good, because it’s bad news."