Michael Woloschuk
The Ottawa Citizen
August 14, 1997

Energy-industry expert predicts end of atomic power in Canada

Ontario Hydro’s dramatic decision to shut down seven atomic reactors signifies the end of the nuclear era in Canada, says one of the country’s leading energy industry critics.

"It looks like the nuclear option is dead in Canada," said Tom Adams, the executive director of Energy Probe, a Toronto-based industry watchdog that is opposed to atomic power.

"This probably signals the early shut-down of reactors in New Brunswick and Quebec as well, and the beginning of a transition towards a non-nuclear Ontario."

Ontario Hydro’s board of directors said they will close four units at the Pickering generating station near Toronto and three at Bruce near Owen Sound.

The closings come on the heels of a damning internal probe on the public utility’s nuclear power system, which was described in the investigation’s report as being among the worst in North America.

Energy Minister Norm Sterling, who received the report, said he accepted the closings because he was concerned about the ability of management and employees to operate the plants safely.

Ontario Hydro’s president and chief executive officer, Allan Kupcis, said he would take full responsibility for the failings raised by the investigation, and resigned.

The utility’s board of directors said the seven reactors were scheduled to remain shut for only one year while overhauls to the nuclear facilities are completed. But Mr. Adams said there was "virtually no chance" of that happening.

"The utility is trying to put a brave face on the closure by saying they may restart some of the seven units," he said. "Basically, Ontario Hydro’s finances are in meltdown here."

Indeed, the utility’s economic problems — especially those relating to the company’s nuclear facilities — have long been a concern of government and financial analysts.

Ontario Hydro, carrying a debt of more than $33 billion, is one of the most heavily leveraged companies in the world. Earlier this year, the company was warned by senior management that its nuclear plants accounted for $25 billion of that debt.

While unloading the financially troubled utility remains a priority for the Conservative government, potential investors might be scared off by the possibility of a multi-billion-dollar lawsuit resulting from a nuclear accident.

By closing the nuclear plants, explained Mr. Adams, the Ontario government would have an easier time shopping Ontario Hydro around to potential buyers.

"The nuclear plants don’t look very privatizable right now," he said. "You’d have to be an absolute moron to buy a Candu reactor."

Although financial experts did not share Mr. Adam’s zeal in describing the unsalability of the utility’s nuclear facilities, they agreed with the industry watchdog that Ontario Hydro would stand a better chance at privatization if its atomic plants were scrapped.

"Nuclear assets are difficult — certainly that’s where the problem lies right now," said Michael Rao, a senior analyst with the Dominion Bond Rating Service. "With all these extra costs coming in — Ontario Hydro was supposed to be reducing its debt by $1.5 billion to $2 billion a year for the next four years. All that cash flow that they were supposed to be generating is now going to go toward the additional costs of overhauling these facilities."

And while Ontario Hydro may be experiencing management and debt problems with its nuclear facilities, that doesn’t necessarily signal the death of atomic power, said a senior official with Atomic Energy of Canada Limited, the Crown corporation that built the Candu reactors at the seven troubled Ontario sites.

"If anything, we see the next century embracing nuclear technology to a greater extent than has been the case," said Gary Kugler, who is the AECL’s vice president of commercial operations. "There will be relatively few environmental options for producing electricity in the next century, and nuclear will be one of them."

Mr. Kugler said the closings at the Pickering and Bruce facilities were due to management and personnel problems and should not reflect on the reliability of Candu reactors.

"Any time a utility that’s as important as Ontario Hydro — and is operating Candu reactors — experiences performance problems, this is not good news for us," he said. "We understand, however, that they see this largely as an internal Hydro problem, a management and work-culture problem. As such, they’re taking the necessary steps to recover. They do stress in the report that they find the Candu technology sound and robust.

"What Hydro will do will address the management and cultural problems. There will be relatively little needed in the way of major repairs. Those reactors have operated for a number of years and most components do wear with time. There has been neglect and Hydro admits to that — that’s the whole point of the report. It’s simply a question of doing proper maintenance — and ideally preventative maintenance — so these equipment problems don’t get out of hand."

If Mr. Adams of Energy Probe had his way, the nuclear plants will never be restarted again.

And he applauded the timing of the shutdowns because they forces the province to consider future electricity sources as well as the privatization of the industry.

Energy Probe, he said, is pushing for a much more decentralized, consumer-driven electricity industry wherein customers choose the company with whom they want to deal — and where most of Ontario Hydro’s assets get sold off.

But the bottom line, he added, is that electrical generation become nuclear free.

"The risk to Ontarians has been meaningfully reduced by closing the crotchetiest, oldest, creakiest reactors," he said. "We’re very pleased that the utility came to its senses about its nuclear problems before they had a big accident with one of these reactors. That’s the good news — they could have waited until after and that would have been a terrible tragedy. As it is, the only damage here is financial."