February 4, 1999

Earlier this week, Ontario Hydro’s "Nuclear Report Card" reported nuclear production 6.4% ahead of target for 1998. In fact, actual nuclear production for the year fell 3.4% short of Hydro’s official "Nuclear Asset Optimization Plan", as it was presented to the Ontario Parliamentary Select Committee on Ontario Hydro Nuclear Affairs in October 1997.

Faced with nuclear output below its official forecast, Ontario Hydro quietly and retroactively lowered its 1998 production forecast by about 10.1%, to a figure below its disappointing production. The original, official forecast formed the basis of the Plan’s approval by Ontario Hydro’s Board of Directors and the Ontario government.

Energy Probe estimates that the financial implications of the 3.4% production shortfall represents a new loss to Ontario Hydro’s "bottom line" of approximately $60 million. That loss is not created because nuclear power is less expensive than alternatives, which it is not. Rather, nuclear costs are dominated by fixed costs like capital and staff benefits, which have to be paid whether or not the plants run. The costs of short-term alternatives (fossil-fired generation, imports, and lost exports) are dominated by variable costs. The variable costs of replacement power are all that is counted in the $60 million estimate.

The Nuclear Asset Optimization Plan as approved represented an $8.8 billion hit to the utility’s bottom line. The recently announced $800 million recovery plan for Pickering A was not included in the $8.8 billion estimate nor was the effect of production shortfalls like that occurring in 1998.

The year end "Nuclear Report Card" also indicates that Ontario Hydro’s nuclear program continues to fail to meet its internal nuclear improvement plan milestones and public safety event targets although other performance objectives are met.

Energy Probe estimates that nuclear power provided 41% or less of Ontario Hydro’s electrical energy in 1998, down from a peak of 62% in 1994.