Energy Probe

Mac Trueman
Telegraph Journal
April 1, 2002

“NDP Leader Elizabeth Weir said that by advancing Point Lepreau’s refurbishment date to 2006, NB Power made it hard for the Public Utilities Board to turn the refurbishment project down.” Photo credit: David Nickerson/Telegraph-Journal.

Atomic Energy of Canada Ltd. and NB Power are so financially imperiled that either or both could disappear before they finish refurbishing Point Lepreau, nuclear watchdog Tom Adams warns.

If that happens, New Brunswick could be stuck with a gutted nuclear reactor and piles of replacement machinery that nobody can put back together, Mr. Adams, executive director of the anti-nuclear group Energy Probe, said this week.

“You can’t rule that out.”

Atomic Energy’s future has been brought into question by a review ordered by federal Natural Resources Minister Herb Dhaliwal into whether Ottawa should continue its annual $100-million subsidy of the atomic reactor maker, which has sold only two generating plants since 1995.

“If we’re not making any sales, and there’s no potential,” Mr. Dhaliwal said early this year, “should we continue to invest in these areas or not?”

Mr. Adams contends New Brunswick’s power corporation has its own problems. Its debt equals 16 per cent of this province’s economy.

It owes $9,200 for every working New Brunswicker, he said.

By comparison, Ontario’s power industry owes only $6,400 for every employed citizen.

Even with debt fees taken out, New Brunswick has the highest operating costs per unit of delivered power of any utility in Canada, Mr. Adams said.

The figures cast doubt on the province’s ability to handle the $845-million cost of the nuclear rebuilding project it has placed before the Public Utilities Board, he said.

“NB Power’s track record and its current financial position are so weak that there is real question as to whether it can carry it off.”

The corporation’s financial plan depends on the refurbished Lepreau working so perfectly that even in the year 2031 – one year before it would wear out – it would operate at full power 96.3 per cent of the time, he said.

“They assume in their analysis that after retubing this reactor is going to work like a Swiss watch. But the evidence from other reactors that have been retubed is that they run like fireflies – wink on and wink off.”

Four Candu reactors at Pickering, Ont. suffered so many breakdowns after they were rebuilt that Ontario Hydro mothballed them, he said.

Gordon Dalzell, Saint John Citizens Coalition for Clean Air chairman, is calling on the province to order a health risk impact study similar to those it required for the Irving King of Cats oil refinery expansion and NB Power’s proposed conversion of its Coleson Cove thermal station to Orimulsion.

“The single biggest issue is that the public doesn’t know what are the health impacts from living near a nuclear facility,” he said.

But Sharon Flatt, Saint John chairwoman for the Canadian Unitarians for Social Justice, wants the hearing to consider all the pollution that results from nuclear power – from the uranium mine, to the power station, and to Canada’s not-yet-built storage facility for spent fuel.

“I think on a scale of one to 10, it’s right up there as the most dangerous, the most dirty of options around. Its ecological footprint is vast.”

NDP Leader Elizabeth Weir said that by advancing Point Lepreau’s refurbishment date from 2008 to 2006, NB Power has created an emergency that will make it hard for the Public Utilities Board to turn the project down.

The less time there is to choose and engineer an alternative power source, the harder the utility can argue that there is no choice but the nuclear one, she said.

“That is the political strategy NB Power is employing. And my concern is that the PUB won’t have the fortitude to call their bluff.”

NB Power officials says its Hagler Bailly engineering study done in 1998 recommended refitting Lepreau in 2006, but Ms. Weir said she has read the report and it recommends 2008.

New Brunswick Energy Minister Jeannot Volpé’s endorsement of the refurbishment will make it even harder for the utilities board to say no, Mr. Adams said. It “raises fundamental questions in my mind as to what is the purpose of the public review.”

John Bennett, the Sierra Club of Canada’s director of atmosphere and energy, is predicting the Point Lepreau tab will be double the $845-million Atomic Energy is now estimating.

“That’s based on 25 years of watching them make announcements and then build things and then admit what it actually cost later.”

Jackie Webster
Telegraph Journal
March 25, 2002

“Why doesn’t NB Power come clean and tell the people of the province just how financially precarious that operation is?” That’s Tom Adams, executive director of Energy Probe, the organization that tabled a devastating report on the Crown corporation in Fredericton last week.

It is dishonest to mislead the people on just what awaits them in terms of energy costs, says Mr. Adams, when a dramatic and unprecedented increase in power rates is inevitable. Well, why do they? One wonders.

“Because they are politicans, that’s why,” says Jack Wetmore, a former NB Power employee and long-time critic of the utility. That must be the explanation. Witness Deputy Premier Ray Frenette: “These experts after the fact, they are easy to find, but wouldn’t New Brunswickers have been freezing in the dark last winter if we had not had the Belledune power station to rely on?”

No, of course they would not. There is plenty of power to be had and much cheaper than from Belledune. But that is beside the point. The really interesting feature of Mr. Frenette’s defence of NB Power now, is that he was, in Opposition, its fiercest critic. With his great gift for rhetoric, he predicted over and over the sky was falling; that NB Power’s “high-priced mouthpiece” was fudging the figures; that disaster lurked around every corner. And those Cassandra-like prophecies of the Opposition days, have emerged full-blown in the Energy Probe presentation of Oct. 9, 1996.

Tom Adams, who wrote the report, was unequivocal. “NB Coal is a gaping wound that must be staunched if the utility is to survive.

“NB Power’s capital spending in the l990s – in excess of $2-billion so far – has been almost entirely wasted. . . . Building the $2-billion Belledune generating plant is probably the worst mistake ever made in New Brunswick’s history.”

Belledune cannot be blamed on previous administrations as can Point Lepreau. The latter white elephant was inherited; the former, announced with great fanfare by this administration within a year of it taking office. Then there was the overhaul of the generating station at Dalhousie. Another colossal mistake, according to Mr. Adams. And yet no admission that NB Power – and by extension, the government and the taxpayers of New Brunswick – are in dire straits.

On the contrary, the utility’s annual report is upbeat and positive. Satisfaction is mentioned often. Recently, when a young reporter spoke of New Brunswick’s “staggering” debt, he was called on the carpet by Premier Frank McKenna and chastised. New Brunswick debt is not staggering, said the Premier, and to say otherwise is irresponsible.

The Premier chose to separate the province from the Crown corportion in terms of debt. Which is absurd. The province guarantees NB Power’s debt, and charges in excess of $2l-million as a fee for that guarantee. The ironic twist to this whole financial boondoggle is that much of that debt was politically motivated.

Belledune and Dalhousie were both a sop to Northern New Brunswick, miffed that the highly touted nuclear plant was located at Point Lepreau in the south of the province. The decision to use NB Coal for its coal-fired plants, a decision both economically and environmentally disastrous, was to provide employment in the Minto area; a political decision. In l99l, after a series of misfortunes and adverse publicity, Premier McKenna announced plans to rein in the utility.

NB Power has been “a kingdom unto itself for many, many years,” but will have to start paying obeisance to the same rules as general government, he said. The new sovereign was three years too late; the $2-billion Belledune boondoggle, commissioned on his watch, was already under way. This must be a time of great frustration, combined with an overwhelming tendency to say “I told you so” from long-time critics like Janice Harvey, who addressed the matter in a column earlier this week, and Jack Wetmore, a regular at the Standing Committee hearings; his last appearance being on Oct. 9.

The Energy Probe report was given good media coverage and rightly so. On the same occasion, Mr. Wetmore made many of the points he has long been making, but without the media spotlight that focused on Tom Adams of Energy Probe. His comments have been applauded by a former senior writer with NB Power who says Mr. Wetmore’s observations are right on the mark.

Here are some highlights: The high cost of temporary help: The use of consultant firms to supply administrative personnel may have cost $45-million more than necessary over the past five to six years. According to NB Power’s own figures, consulting fees were from one-and-a-half to three times the salary paid to the individuals previously in that post. This markup structure is standard practice, but it is expensive.

It looks good to show a reduction of 200 staff in the annnual report, writes Mr. Wetmore, but when this staff is replaced by temporary consultants at perhaps twice the cost, it raises serious questions. Many competent employees were offered retirement packages to move off the payroll, but the expertise they provided was still required, so their place was taken by consultants.

“The use of consultant firms for a supply of temporary help is a very expensive process,” writes Mr. Wetmore. “With fees ranging from 156 per cent to over 300 per cent of the base salary paid to the firms supplying the staff, over the past five or six years, this practice has cost as much as $45-million above the costs of these same people as casual or term employees.

Mr. Wetmore questions maintenance planning. Last fall’s incident when a piece of wood jammed inside Point Lepreau and “which came within an ace of destroying the plant, was a repeat of a similar incident during construction, when contaminants were left in the system.

Some of the key personnel involved in that incident were still at NB Power last fall. “The corrosion problem which caused the most recent shutdown has been evident for some years. I question why it was not corrected during last fall’s prolonged outage. NB Power has a responsibility to maintain a high level of operational reliability. We have a right to expect a better performance in this area than we are receiving.”

It is a comprehensive report. The areas of waste, inefficiency and mismanagement it highlights are reflected in the power bills that reach us every month. Each of us has a vested interest, as have the politicians, in just how well that utility is run. The newest rate hike will come into effect only after the next provincial election. Surprised anyone?

Norman Rubin

March 18, 2002

Larry Chamney, Head
Program Management and Environmental Assessment Section
Canadian Nuclear Safety Commission
P.O. Box 1046, Station B
Ottawa, ON K1P 5S9

Dear Mr. Chamney:

Energy Probe’s comments on the Draft Environmental Assessment Guidelines for the proposed Point Lepreau Solid Radioactive Waste Modifications

Energy Probe has by no means examined these draft guidelines thoroughly in the twenty-eight days that they were available for public comment. We are concerned that Environmental Assessment in Canada — and apparently in New Brunswick, too — is generally characterized by long periods of preparation of assessment documents by well-funded government and industry organizations, punctuated by incredibly short periods for the assessment of those documents by citizens and citizens groups. This is not rocket science, or nuclear physics, it is just poor regulatory practice. We will comment on a few select passages in the draft scope document. Please do not infer our support for passages not mentioned in this quick review. We hope that there will be a more expansive opportunity for us to comment on the substance of the assessment.

Energy Probe is also concerned that the proposed Environmental Assessment for this undertaking will be accomplished through “self-assessment” by CNSC⁽¹⁾, NBPower⁽²⁾, and NBDELG⁽³⁾, rather than under the scrutiny of an independent review body along the lines of an EA review panel. In our extensive experience in the assessment of the impacts of nuclear undertakings, including those involving nuclear wastes, independent panels and the public as a whole consistently take a rather different view of these impacts than officials of CNSC, governments, and nuclear utility companies. Indeed, our most recent experience with an independent panel review of a nuclear undertaking — the so-called “Seaborn Panel” review of the federal government’s concept for deep geological disposal of high-level radioactive waste — showed that such panel reviews have the potential to make rather large steps away from nuclear-establishment “business as usual” and toward the kind of wisdom that we must develop to deal properly with nuclear materials. Indeed, one of the findings of that review was that the federal concept was not acceptable on all six criteria for acceptability, one of which was that it “be advanced by a stable and trustworthy proponent and overseen by a trustworthy regulator.” (Report, Feb. 1998, p. 41) According to our cursory review of that Panel’s recommendations to help CNSC become such a “trustworthy regulator”, none have been implemented.

Increasingly, such independent reviews of nuclear waste matters have suggested that acceptable nuclear waste disposal may not be achievable in Canada, for low-level or high-level radioactive wastes. Indeed, the federal government has apparently – finally – conceded this point in the case of low-level wastes, as it is currently proceeding with plans to place the “historic” radioactive wastes from the town of Port Hope in monitorable, retrievable storage rather than in a permanent disposal facility as was actively planned for the past several decades. Ironically, this same federal government still harbours the hope that a willing host community will be found for the far more radioactive and toxic high-level nuclear wastes created by Canada’s nuclear reactors, including those from Point Lepreau and these facilities.

Indeed, this Draft Environmental Assessment Guidelines refer several times to the plan for the wastes in question to move off-site to a national radioactive waste repository — one which we believe may well never exist. We believe this assessment must include due consideration of that possibility. For example:

Decommissioning Plan:

A conceptual decommissioning plan for the SRWMF will be included in the assessment. The plan will document, as appropriate, the preferred decommissioning strategy and end-state objectives, and an overview of the principal hazards and protection measures envisioned for decommissioning.

The long-term management of radioactive waste, including irradiated nuclear fuel, is being developed through separate federal policy and legislation. No final options or sites have been defined or approved as yet. Provision of national long-term waste disposal facilities is not within the scope of the Point Lepreau SRWMF environmental assessment, and is not part of the decommissioning planning information. (Draft EA Guidelines, pp. 8-9)

Rather than including an assessment of “national long-term waste disposal facilities”, this decommissioning plan must assess the impacts on this facility should such facilities never materialize. Without this consideration, it is simply far too easy to justify the creation of intractable and long-lived toxic wastes while hoping that they will just go away, to some future facility. There is no such facility, and this assessment must not assume there is, or ever will be.

Similarly, the consideration of the Spatial and Temporal Boundaries of the Assessment must not be restricted to a “Long-term” temporal period that only includes the operational period of the SRWMF. (S. 11.2.2, p. 10) These toxic, hazardous materials will be toxic and hazardous for a long term, which is not limited to the operational period of these facilities, or of the Point Lepreau Nuclear Generating Station. The assessment must discuss the provisions – technical and financial – for perpetual care of these wastes throughout their toxic lifetime. We also believe that these financial provisions must adopt the principles of the Report of the Environmental Assessment Panel on the Second Nuclear Reactor, Point Lepreau, New Brunswick (1985), which recommended prudently that “The annual decommissioning levy be scaled so that contributions are higher during the first years of operation.” (Rec. 38 (a)) We note that neither NBPower nor CNSC, the federal “Responsible Authority”, has followed this principle in the funding of decommissioning and radioactive waste disposal at Point Lepreau to date, despite this prudent recommendation. If the assessment does not establish adequate funding for “perpetual care” of these materials, then the spatial boundaries of the assessment must be adjusted to reflect the region of their dispersal without such care.

We are pleased that this review must assess the incremental environmental effects of continued operation of the Point Lepreau NGS following refurbishment. But we are puzzled that the review focusses — starting with its title — on the “Proposed Modifications to the Point Lepreau Solid Radioactive Waste Management Facility”. Indeed, we would not be surprised to find that those effects exceed those of the proposed waste management facility modifications. As a result, we find the presentation of this scope document misleading. We wonder how many potential respondents were lulled into not responding, thinking that only waste facility modifications were at issue.

Further to this point, the discussion of Malfunctions and Accidents (p. 8) seems to be artificially constrained by not including the incremental environmental risk of malfunctions and accidents from the continued operation of the Point Lepreau NGS following refurbishment. Yet this risk is almost surely the most important risk of malfunctions and accidents associated with the undertaking. And section 11.2.4.3 on Assessment of Incremental Environmental Effects of Continued Operation of the Point Lepreau NGS Following Refurbishment seems to go equally far out of its way to avoid discussing the same obvious risk — of malfunctions and accidents during the continued operation of the Point Lepreau NGS following refurbishment. Whether or not there is some arcane legal justification for omitting this obvious and considerable environmental impact, it is unseemly for responsible government and utility officials to go to such extreme lengths to avoid discussing items of such widespread justified concern. Such a discussion must not simply be based on empty “so far, so good” assurances, but must consider the accident risks of an as-designed Point Lepreau NGS, compounded by both the (known and unknown) physical effects of aging and the effects of the increasing design obsolescence of this reactor. Some of those obsolescence effects, though not all, are captured in the CNSC’s list of outstanding Generic Safety concerns.

Finally, the environmental impacts, including risks, of the increased quantity of spent fuel and other reactor wastes from the continued operation of the Point Lepreau NGS following refurbishment must be assessed, without recourse to deus ex machina rescues by non-existent federal waste repositories.

We hope that these comments are helpful, and that you will produce some form of reasons for decision that will paraphrase our concerns and respond to them, whether affirmatively or negatively. And we would like to continue to be involved in this assessment, both as an NGO in the stakeholder consultation program and as an intervenor in the EA process.

1. Canadian Nuclear Safety Commission (formerly the Atomic Energy Control Board) is the federal “Responsible Authority” as the regulator of the facility and the undertaking.

2. New Brunswick Power, as the owner of the facility and the proponent of the undertaking, is delegated by CNSC the job of assessing its environmental impacts, and their acceptability.

3. The Minister of New Brunswick’s Department of Environment and Local Government is charged with assessing this project under the Environmental Impact Assessment Regulation of New Brunswick’s Clean Environment Act.

Eric Reguly
Globe and Mail
March 14, 2002

The old Ontario Hydro was an epic disaster. Electricity bills in the province are about 35 per cent higher than they should be because consumers were forced to pick up the tab for $21-billion in liabilities that the Crown-owned utility could not pay off. The good news is that Ontario is unlikely to see a repeat of the financial horror story.

For its sins, Ontario Hydro has been dismantled and one of its two offspring, Hydro One, is being privatized. The other, Ontario Power Generation, will probably go the same route. The electricity markets themselves are being opened in May. In the future, private shareholders, not taxpayers, will bear the risks of bad management and bad spending decisions. The overhaul should have happened years ago.

You wonder whether other provinces are paying attention to Ontario’s cautionary tale. New Brunswick is evidently not. With a fall election looming, talk of privatizing NB Power, the province’s electricity company, has all but vanished as politicians make their mealy-mouthed speeches. Instead, the debate, such as it is, centres on how many hundreds of millions of dollars should be spent to satisfy NB Power’s voracious financial appetite. What we’re dealing with here, it appears, is an Atlantic version of Ontario Hydro. Taxpayers and ratepayers beware.

Not long ago, NB Power was among the proudest achievements in a province that needed something to brag about (remember the failed Bricklin car?). The utility’s showpiece was the Point Lepreau nuclear generator, which was designed by Atomic Energy of Canada Ltd. and delivered its first juice in 1983. Point Lepreau worked rather well and AECL used it to market its nuclear technology around the world.

NB Power pushed Point Lepreau hard. It operated at near full capacity and supplied about 30 per cent of the province’s electricity needs. But like a car with too many miles on it, it started to show signs of early stress. In 1996, experts said the plant would last until 2014. Three years later, they reduced its service life to 2008. As a result, NB Power took a $450-million charge to reflect the shortened recovery period for the investment made in Point Lepreau. Now, NB Power is predicting the plant won’t last beyond 2006.

As Point Lepreau gasped and wheezed, it couldn’t produce as much electricity as it once did. The lost generation pushed NB Power into the red in the last fiscal year. The losses couldn’t have come at a worse time: NB Power’s debt was rising — it stands about $3.5-billion — because the ailing dollar boosted the expense of its U.S.-dollar debt.

When a nuclear plant gets clapped out, two options generally present themselves. The first is decommissioning the plant. The second is giving it a tune-up job to extend its life. Both options are hideously expensive, and Point Lepreau will prove no exception. NB Power estimates the decommissioning costs at $843-million, which includes $389-million for the disposal of irradiated fuel. Too bad NB Power has charged its income statement only $205-million for these costs. The decommissioning money, in other words, is inadequate. Furthermore, it doesn’t really exist — the $205-million is not actually sitting in a separate account waiting to be spent.

Since that option doesn’t look very attractive, NB Power is now seriously considering Plan B — a $845-million project to overhaul the reactor. On paper, it’s not a bad idea. The fix-up job would extend Point Lepreau’s life to 2032. The problems are that nuclear overhauls rarely come in on budget, as the horrendous cost overruns in the refurbishment of Ontario’s Pickering plant show, and whatever the final bill comes to, someone has to pay for it. This means rate hikes. But jacking up electricity prices by 20 per cent or 30 per cent to pay for Lepreau would scare away industry.

The politically safe thing to do, then, is to raise rates just a little and worry about paying the overhaul bill some time down the road. That’s called mortgaging your future, and that’s precisely what Ontario Hydro did when it went on spending spree it couldn’t afford. Any mess created by Point Lepreau will have to be cleaned up by the next generation.

A proper debate about privatizing NB Power would be the politically bold thing to do. If NB Power were held by private shareholders instead of the government, the taxpayer wouldn’t be on the hook for a spending decision that could potentially cripple the utility. For NB Power, the future doesn’t look bright.