Howard
The Washington Post
August 14, 1997

TORONTO — Ontario Hydro, North America’s largest electric utility and a major investor in nuclear power, is shutting down a third of its reactors after an internal study documented widespread management problems, years of inadequate maintenance and safety practices that were only marginally acceptable.

Allan Kupcis, president and chief executive officer of the company, resigned Tuesday night, on the eve of the public release of the highly critical study by a team of U.S. nuclear power experts.

The study concludes that while public safety was never directly threatened, operators of the province’s 19 nuclear reactors routinely ignored maintenance schedules and pushed the operating capacity of the plants to their limit without regard to leaky tubes and valves and other deteriorating conditions. The release of water contaminated with heavy metals into Lake Ontario was discovered at one plant in the early 1980s, but provincial environmental authorities were never notified.

Another, earlier investigation found management so lax that employees were sleeping on the job and playing video games on control room computers.

In response to the report’s findings, seven of Ontario Hydro’s 19 reactors will be "laid up" over the next year and will only be brought back on line after an estimated $1.2 billion is spent on repairs and billions more in increased fossil-fuel costs — if even then.

The Ontario government is studying whether to eliminate Ontario Hydro’s monopoly and open the province’s large, but still centrally planned, electricity industry to competition. If it does, the utility may find, as have several of its U.S. counterparts, that the repair bill for aging nuclear plants is too high to keep them competitive.

Until that decision is made, Ontario Hydro plans to increase power production at existing coal and other stations and reopen some retired facilities, a step environmentalists say will add to Canada’s already high level of greenhouse gas emissions. Hydro officials say there is no alternative in a province that relies on nuclear power for 60 percent of its electricity and is about to lose a large percentage of it.

"The people of Ontario probably thought our nuclear industry was better than we now know it is," said Ontario Hydro Chairman William Farlinger, who was appointed interim CEO after Kupcis resigned. "The nuclear unit was operated as though there was some special nuclear cult" of technicians and engineers who alone understood how to run the nuclear facilities, he said. "Senior management didn’t dig into what was going on."

When they did, they found that "cult" run by many of the same people who in the 1960s and ’70s helped build what was then considered a state-of-the-art nuclear power system in Ontario. But, relying on Canadian-developed Candu reactors that were felt to be sturdier than other designs, those engineers and builders proved inept as managers and ignored basic operating principles for years.

Staffing levels were thousands of employees short of what was needed to run and maintain the plants, said Carl Andognini, Ontario Hydro’s chief nuclear officer, and senior nuclear managers created an atmosphere that encouraged workers to avoid blame for problems rather than solve them. Most of those senior executives have been replaced over the last year, and Farlinger said more firings are likely.

Farlinger said that despite the increased costs, the utility will avoid raising power rates by extending repayment of billions of dollars of debt accumulated to build the nuclear plants.

Ontario Hydro was still involved in nuclear construction in the late 1980s, when U.S. utilities had largely stopped building new nuclear plants as too expensive. Hydro’s last nuclear station cost $14 billion, more than double the original projections.

Provincial Energy Minister Norman Sterling said that while Ontario wants to open its electricity market to competition, any plan for that will have to ensure that Ontario Hydro can repay this "stranded debt" — all of which is guaranteed by Ontario taxpayers.

"The dynamics are changed somewhat" by the utility’s problems, Sterling said. "If their costs go up, we may have to postpone the date for open competition."

That, said Norm Rubin, nuclear policy director for the local advocacy group Energy Probe, is all the more reason for the utility to do what he feels it should have done years ago: abandon a commitment to nuclear power that continued long after other North American utilities concluded it cost too much.

"They should shut down the [nuclear] stations, and they should open the market as fast as possible so we don’t have to run those dirty, inefficient coal stations," Rubin said. "I don’t think any more money should go into those plants guaranteed by the province."