Canada’s nuclear nabob’s try to turn green

Posted on May 20, 2000 by energyprbe

Norman Rubin

May 20, 2000

For decades, nuclear power has been a promising industry. First, it promised electricity too cheap to meter, and nuclear-powered cars and airplanes. Later, it promised safe, reliable and economic electricity. Today, those promises are hard to make with a straight face, and even harder to keep: More than one-third of Canada’s billion-dollar Candu reactors have stopped producing any electricity (or income), and the unsupportable debt created by Candu reactors has far surpassed $10-billion, not including the additional nuclear billions in the federal debt.

So today, the nuclear industry has taken to promising environmentally friendly energy, and promising to help Canada meet its commitment to reduce greenhouse gas emissions under the 1997 international Kyoto agreement. As David Torgerson, Atomic Energy of Canada Ltd. (AECL) vice-president, recently told a Senate committee: “We believe quite strongly that Candu is a key to meeting the Kyoto targets.”

That promise has already been adopted by Canada’s reactor sales force — led by Prime Minister Jean Chretien. It has also been spread widely by U.S. officials. Ambassador John B. Ritch III, the U.S. representative to the United Nations Organizations in Vienna, told a conference earlier this year: “Only one technology on our horizon — advanced nuclear reactors — offers a realistic promise of contributing substantially to the world’s burgeoning need for large base-load power production without exacerbating the hazards of environmental contamination and catastrophic climate change.”

To followers of the energy debate, the new emphasis is at its root a plea for continued taxpayer subsidies from an industry that can’t compete. The hope for subsidies arises from a footnote in the Kyoto accord known as the Clean Development Mechanism (CDM). According to the CDM, countries that fail to meet their agreed targets for emissions reductions under the Kyoto accord could get compensating credits by promoting “clean development” in other countries — development that at least theoretically reduces greenhouse gas emissions in a sustainable and “clean” way. Canada’s nuclear industry is basing its hopes for exporting reactors to the Third World on having them qualify for the valuable credits.

As the International Atomic Energy Agency’s Thomas Tisue explained to a Canadian Nuclear Society audience late last year, “The basic idea is easy to grasp: stimulate the use of nuclear power in developing countries through the CDM mechanism to simultaneously generate CO2 offset credits and promote sustainable development.” Because of its higher costs, he said, “nuclear would not be used by most developing countries in the absence of the CDM mechanism.”

Unfortunately for the industry, the promise that nuclear power is either sustainable or clean — or poses a practical or affordable way to lower greenhouse gas emissions — looks as empty as the industry’s earlier broken promises of cheap and reliable power:

– Canada’s nuclear industry has already generated a world-class collection of toxic trash, with virtually no funds set aside for cleaning up the mess. Ontario Hydro estimated recently that its own nuclear clean-up would cost $18.7-billion in today’s dollars. The entire clean-up fund now stands at $420-million. The rest will have to be raised in the future, since the first two decades of Ontario’s nuclear generation (like Quebec’s and New Brunswick’s) left no funds at all.

The totally unfunded radioactive waste mess of the federal Crown corporation, AECL, has been criticized by Canada’s auditor-general since 1995 as a violation of accepted accounting principles, not to mention the principles of sustainable or “clean” development.

– The industry’s waste-disposal plans — for unmonitored, irretrievable burial — have received only two public reviews, and neither supported them. In 1988, an all-party federal committee unanimously recommended a moratorium on reactor construction until the plans were improved. A second look — a nine-year federal review by an independent environmental assessment panel that finished in 1998 — unanimously judged the industry’s plans unacceptable, and produced a “hung jury” on their safety. The panel unanimously recommended that the industry not proceed with its preferred next step: selecting a site for burial.

– Although reactors emit extremely low levels of the greenhouse gases implicated in global climate change, virtually no serious plans to decrease emissions include building new reactors. Greater emissions cuts are available sooner and cheaper from a combination of efficiency gains in generation and consumption, and decentralized generation from natural gas (a low-emission fuel) and renewables. The Canadian government’s claims to CDM credits for exporting Candu reactors have accordingly been met with scorn from foreign governments and environmentalists alike.

– To the surprise of many non-experts, most major producers of nuclear power — including Ontario Power Generation (the new-generation successor to Ontario Hydro) and New Brunswick Electric Power, as well as generators in the United States, China, Eastern Europe and elsewhere — are also major coal burners and greenhouse gas emitters. Although they look like alternatives, coal power and nuclear power are really natural partners: Reactors produce constant or “base-load” power when they can run, while coal-fired stations can fire up to meet “peak” loads and keep the lights on whenever the reactors go down.

With all these developments sullying its latest repositioning as an environmental saviour, the nuclear industry should find its plea for ongoing subsidies a hard sell. But with the decision in the hands of a federal government that continues to spout the rhetoric of the nuclear industry all the way up to the prime minister, nothing can be ruled out.

Posted in Nuclear Economics, Nuclear Plant Security | Tagged | Leave a comment

Canada’s nuclear nabobs try to turn green

Posted on May 20, 2000 by energyprbe

Norman Rubin
National Post
May 20, 2000

For decades, nuclear power has been a promising industry. First, it promised electricity too cheap to meter, and nuclear-powered cars and airplanes. Later, it promised safe, reliable and economic electricity. Today, those promises are hard to make with a straight face, and even harder to keep: More than one-third of Canada’s billion-dollar Candu reactors have stopped producing any electricity (or income), and the unsupportable debt created by Candu reactors has far surpassed $10-billion, not including the additional nuclear billions in the federal debt.

So today, the nuclear industry has taken to promising environmentally friendly energy, and promising to help Canada meet its commitment to reduce greenhouse gas emissions under the 1997 international Kyoto agreement. As David Torgerson, Atomic Energy of Canada Ltd. (AECL) vice-president, recently told a Senate committee: “We believe quite strongly that Candu is a key to meeting the Kyoto targets.”

That promise has already been adopted by Canada’s reactor sales force — led by Prime Minister Jean Chretien. It has also been spread widely by U.S. officials. Ambassador John B. Ritch III, the U.S. representative to the United Nations Organizations in Vienna, told a conference earlier this year: “Only one technology on our horizon — advanced nuclear reactors — offers a realistic promise of contributing substantially to the world’s burgeoning need for large base-load power production without exacerbating the hazards of environmental contamination and catastrophic climate change.”

To followers of the energy debate, the new emphasis is at its root a plea for continued taxpayer subsidies from an industry that can’t compete. The hope for subsidies arises from a footnote in the Kyoto accord known as the Clean Development Mechanism (CDM). According to the CDM, countries that fail to meet their agreed targets for emissions reductions under the Kyoto accord could get compensating credits by promoting “clean development” in other countries — development that at least theoretically reduces greenhouse gas emissions in a sustainable and “clean” way. Canada’s nuclear industry is basing its hopes for exporting reactors to the Third World on having them qualify for the valuable credits.

As the International Atomic Energy Agency’s Thomas Tisue explained to a Canadian Nuclear Society audience late last year, “The basic idea is easy to grasp: stimulate the use of nuclear power in developing countries through the CDM mechanism to simultaneously generate CO2 offset credits and promote sustainable development.” Because of its higher costs, he said, “nuclear would not be used by most developing countries in the absence of the CDM mechanism.”

Unfortunately for the industry, the promise that nuclear power is either sustainable or clean — or poses a practical or affordable way to lower greenhouse gas emissions — looks as empty as the industry’s earlier broken promises of cheap and reliable power:

– Canada’s nuclear industry has already generated a world-class collection of toxic trash, with virtually no funds set aside for cleaning up the mess. Ontario Hydro estimated recently that its own nuclear clean-up would cost $18.7-billion in today’s dollars. The entire clean-up fund now stands at $420-million. The rest will have to be raised in the future, since the first two decades of Ontario’s nuclear generation (like Quebec’s and New Brunswick’s) left no funds at all.

The totally unfunded radioactive waste mess of the federal Crown corporation, AECL, has been criticized by Canada’s auditor-general since 1995 as a violation of accepted accounting principles, not to mention the principles of sustainable or “clean” development.

– The industry’s waste-disposal plans — for unmonitored, irretrievable burial — have received only two public reviews, and neither supported them. In 1988, an all-party federal committee unanimously recommended a moratorium on reactor construction until the plans were improved. A second look — a nine-year federal review by an independent environmental assessment panel that finished in 1998 — unanimously judged the industry’s plans unacceptable, and produced a “hung jury” on their safety. The panel unanimously recommended that the industry not proceed with its preferred next step: selecting a site for burial.

– Although reactors emit extremely low levels of the greenhouse gases implicated in global climate change, virtually no serious plans to decrease emissions include building new reactors. Greater emissions cuts are available sooner and cheaper from a combination of efficiency gains in generation and consumption, and decentralized generation from natural gas (a low-emission fuel) and renewables. The Canadian government’s claims to CDM credits for exporting Candu reactors have accordingly been met with scorn from foreign governments and environmentalists alike.

– To the surprise of many non-experts, most major producers of nuclear power — including Ontario Power Generation (the new-generation successor to Ontario Hydro) and New Brunswick Electric Power, as well as generators in the United States, China, Eastern Europe and elsewhere — are also major coal burners and greenhouse gas emitters. Although they look like alternatives, coal power and nuclear power are really natural partners: Reactors produce constant or “base-load” power when they can run, while coal-fired stations can fire up to meet “peak” loads and keep the lights on whenever the reactors go down.

With all these developments sullying its latest repositioning as an environmental saviour, the nuclear industry should find its plea for ongoing subsidies a hard sell. But with the decision in the hands of a federal government that continues to spout the rhetoric of the nuclear industry all the way up to the prime minister, nothing can be ruled out.

 

Posted in Nuclear Economics | Tagged | Leave a comment

Energy Probe opposes rate cushioning

Posted on April 12, 2000 by energyprbe

John Spears
Toronto Star
April 12, 2000

Energy board told phase-in hides effects of hikes.

Regulators shouldn’t cushion consumers from electricity rate increases triggered by Ontario’s new market-driven electricity system, says Energy Probe.

Tom Adams, executive director of the non-profit environment advocate, told the Ontario Energy Board yesterday that his group opposes phasing in new, higher electricity rates proposed by local utilities.

Phasing in higher rates, or deferring them for several years, isn’t a measure to protect consumers from “rate shock,” Adams argued.

Instead, it’s a way for the people who designed the new system to conceal the effects of their actions.

Adams argued that part of the rate increase sought by local utilities is unjustified. But he said if they’re going to charge unreasonable rates, the public should know.

“If you’re going to scam people, you’ve got to show them, clear and simple,” he said. “At least tell the customers what you’re doing.”

The energy board is holding hearings to consider a directive from Energy Minister Jim Wilson, in which he told the board to give priority to the interests of consumers when setting rates.

Wilson’s Conservative government promised that rates would fall as they threw open Ontario’s electricity market to competition.

But electric generation is still dominated by Ontario Power Generation, one of the units of the former Ontario Hydro, so its rates haven’t fallen.

Meanwhile, local utilities have been restructured on the province’s orders.

For the first time they must pay dividends to their municipal government shareholders, plus provincial taxes.

Because of the new costs, many local utilities say they’ll have to raise distribution rates.

Adams was challenged by Sheila Halladay, one of the four-member panel considering how to apply Wilson’s directive.

Halladay asked Adams why consumers would not be able to understand what was going on if the energy board and their local utilities clearly told them that higher rates would be phased in over, say, three years.

Her own parents are seniors on fixed income, Halladay said. She would have trouble explaining to them why they should pay higher rates right away when the payments could be deferred, she said.

“They would not say that I was acting in the public interest,” she told Adams.

Meanwhile, Oakville Mayor Ann Mulvale and Toronto Councillor Jack Layton complained that municipal utilities are paying more for electricity than Hydro One, the corporation that runs Ontario’s main transmission grid but has been buying up local utilities.

Hydro One spokesperson Terry Young said the comparison isn’t exact.

Hydro One is liable for tax payments that are not yet applied to the municipal utilities, he said, and that’s part of the reason Hydro One is charged less for power.

 

Posted in Reforming Ontario's Local Electrical Distribution Sector | Leave a comment

Why high oil prices won’t save our planet

Posted on March 28, 2000 by energyprbe

Tom Adams
National Post
March 28, 2000

Oil prices are sky high but the sky is not falling. Improvements in efficiency since the oil price shocks in the 1970s mean that high prices won’t cause a repeat of the nasty economic indigestion we suffered then.

Some environmentalists, focused only on the increased incentive to conserve energy, welcome these high prices. They forget that high prices encourage expansion of our most polluting and environmentally risky oil sources — tar sands, heavy oil and Hibernia.

Low oil prices in recent years had forced tar sand and heavy oil producers to slash output, but now they are back and belching at full output. Plans are afoot to boost Hibernia’s output, increasing the potential risk of blowouts and leaks on the sensitive Grand Banks. High oil prices aren’t helping the environment.

People are prone to believe the myth that, with these high prices, all the oil companies are making out like bandits. The truth is that margins on refined products such as gasoline and heating oil are down. Although oil producers are hauling in cash, dedicated refiners and marketers are being squeezed.

People are also prone to believe that our politicians should “do something” about high oil prices. The more demagogic the politicians, the greater their tendency to jump onto that bandwagon.

Before we let them, we should remember what happened the last time they “did something” about high oil prices. Government “Off Oil” programs in the 1980s precipitated such magnificent errors as the urea formaldehyde contamination of thousands of homes and the Darlington nuclear boondoggle. Our “made in Canada” oil price thwarted energy conservation efforts.

New Brunswick Power proposed subsidized oil-fired power exports to New England. That scheme — which, fortunately, was not fully implemented — would have seen Canadian taxpayers subsidize U.S. power consumers. From an environmental perspective, it would have made more sense for the Canadian government to send cheques directly to the U.S. consumers.

Despite intense pressure from trucking interests and others, the federal government deserves some praise for managing to not manage the issue. John Manley, the Industry Minister, announced in the Commons last week that the Conference Board of Canada has been commissioned to do another ultimately pointless study examining why gasoline prices have increased in the past year. Fortunately, the federal Competition Bureau hasn’t been dragged into wasting further time on this dead end.

The bottom line is that we shouldn’t spend too much time worrying about oil prices — OPEC has proven that it can’t keep internal discipline for long, as demonstrated by the declining prices of the past two weeks.

For all its faults, the market is still the best protection for consumers. Of course, oil is an example where the market is not the best protection for the environment. There is a role for government, not in trying to protect consumers — because such efforts almost invariably boomerang — but in actually protecting our air quality, since high prices won’t do it.

Posted in Fossil Fuels, Oil | 1 Comment

The CANDU reactor bankrupted Ontario Hydro

Posted on March 1, 2000 by energyprbe

Norman Rubin

March 1, 2000

Like me, you can probably remember when the economics of the CANDU nuclear reactor were debatable – when many intelligent, honest people believed that nuclear power was cheap, or at least affordable. Those times are long gone.

Consider Ontario Hydro, the world’s largest customer of CANDU reactors with 20. It amassed an unrepayable or “stranded” debt of $23.3 billion by the time it was broken into smaller companies a few months ago. The CANDU is responsible for most, if not all, of this enormous shortfall.

Even before then, the financial ledgers of this once proud company showed that the company had no value – in fact, it had a negative net value of $6 billion – primarily because the CANDU reactors, plagued with poor reliability and premature shutdowns, were worth less than they cost to build, even after depreciation.

Recent losses from the CANDU reactor at Point Lepreau have also destroyed the net asset value of NB Power.

As if these dismal operating losses weren’t enough, this failed technology has also left an enormous legacy of long-lived cancer- and mutation-causing radioactive wastes. Cleaning up after this failed experiment will cost us all a fortune: For example, Ontario Hydro recently estimated the cost at $18.7 billion in today’s dollars – more than twice the value of all the company’s generating stations!

Fortunately for us, Canada is a wealthy country, and we can afford to cover these bad debts and toxic cleanup costs without spending our food money. But with a track record like that, it’s not surprising that Ottawa’s reactor salesmen have no hope of selling any more CANDU reactors to Ontario Hydro, NB Power, or any other utility company in Canada, the United States, the European Union, or most other regions of the world.

Instead, like a desperate drug dealer, Ottawa is cynically focusing its sales pitch on the few customers that might still be interested: poor countries, especially human rights violators with military ambitions and high levels of corruption. Our officials either don’t know or don’t care that this technology will create multibillion-dollar losses and toxic cleanup costs, which in poor countries will almost surely be paid for from funds earmarked for the essentials of life.

With a few unaccountable officials making multibillion-dollar reactor deals behind closed doors, the corruption is not surprising. Canada’s last two sales to South Korea – reminiscent of earlier sales to South Korea and Argentina – were made with the help of a bribe paid by an agent of Atomic Energy of Canada Limited (AECL), a federal government Crown corporation, to AECL’s customer, the utility company president. Both were finally convicted of bribery in South Korea, but the Canadian government refused to investigate the participation of its own nuclear sales force. South Korea is still one of AECL’s best prospects.

Since the CANDU is a prime source of plutonium and tritium, military ambitions are also not surprising among Ottawa’s reactor customers. Just over a year ago, our early reactor sales to India and Pakistan led to the testing of nuclear weapons. To make matters worse, the physical deterioration of those countries’ reactors has compromised Canada’s stand against nuclear weapons proliferation: Either we idly watch their CANDU reactors become more decrepit and risky or we share our technical information, providing them with more opportunities to misuse our technology and materials for military purposes. Either way, Canadians face embarrassment for having made the world less safe.

But the cost of CANDU exports is more than Canada’s good name. Ottawa continues to sustain this sales effort with taxpayer funds for CANDU development, and for billion-dollar below-market loans to poor countries like China and Turkey. Without these taxpayer funds, the exports would stop. And 10 or 20 years from now, facing huge losses and cleanup liabilities like ours, our foreign reactor customers may well renege on repaying their loans to Canada.

When Ottawa sold the CANDU reactors to Ontario Hydro and NB Power in the 1960s and 1970s, all parties no doubt honestly believed that the investment would pay off. But today, no one realistically believes that China, Romania, Thailand, or Turkey will succeed where Ontario Hydro and NB Power so thoroughly failed.

If you find this whole situation outrageous, as I do, please support us, and join us in spreading the word and the outrage. Together, we must help make this “accepted” activity socially unacceptable, like drunk driving, or planting land mines, or blowing smoke in somebody’s face. Tell your federal representatives, your neighbours, and your newspapers that selling reactors to poor countries has got to stop.

Sincerely,

Norman Rubin
Director, Nuclear Research

 

Posted in Nuclear Economics | Tagged | Leave a comment

Backgrounder

Posted on March 1, 2000 by energyprbe

March 1, 2000

In a 1978 joint statement, the governments of Canada and Ontario directed Atomic Energy of Canada Limited (AECL) to develop the concept of deep geological disposal of nuclear fuel wastes. A subsequent joint statement in 1981 established that disposal site selection would not begin until after a full federal public hearing and approval of the concept by both governments.

In September 1988, the federal Minister of Energy, Mines and Resources referred the concept, along with a broad range of nuclear fuel waste management issues, for public review. He made this referral under the federal Environmental Assessment and Review Process Guide-lines Order. On October 4, 1989, the federal Minister of the Environment appointed an independent environmental assessment panel to conduct the review.

The panel’s mandate was unusual compared to that of any other federal environmental assessment panel in that it was asked:

• to review a concept rather than a specific project at a specific site;

• to review a proposal for which the implementing agency was not identified;

• to establish a scientific review group of distinguished independent experts to examine the safety and scientific acceptability of the proposal;

• to review a broad range of policy issues; and

• to conduct the review in five provinces.

AECL describes its concept as a method for geological disposal of nuclear fuel wastes in which

• the waste form is either used Canada Deuterium Uranium (CANDU) fuel or the solidified high-level wastes from reprocessing;

• the waste form is sealed in a container designed to last at least 500 years and possibly much longer;

• the containers of waste are emplaced in rooms in a disposal vault or in boreholes drilled from the rooms;

• the disposal rooms are between 500 and 1000 metres below the surface;

the geological medium is plutonic rock of the Canadian Shield;

• each container of waste is surrounded by a buffer;

• each room is sealed with backfill and other vault seals; and

• all tunnels, shafts and exploration boreholes are ultimately sealed in such a way that a disposal facility would be passively safe—that is, long-term safety would not depend on institutional controls.

Such a facility would cost an estimated $8.7 billion to $13.3 billion in 1991 dollars, depending on the amount of waste to be disposed of.

The Panel conducted its review in Saskatchewan, Manitoba, Ontario, Quebec and New Brunswick. To develop guidelines to help AECL prepare an environmental impact statement (EIS), the Panel held scoping meetings in autumn 1990 in 14 communities. It also held a workshop on Aboriginal issues and met with members of Canadian Student Pugwash. The Panel then prepared draft guidelines, released them for public comment in June 1991, and issued them in final form on March 18, 1992. On October 26, 1994, AECL submitted an EIS, supported by nine primary reference documents. The period for public review of the EIS began on November 8, 1994, and ended on August 8, 1995.

Public hearings were held in 16 communities over three phases beginning March 11, 1996 and ending March 27, 1997. Phase I focused on broad societal issues related to managing nuclear fuel wastes; Phase II focused on the safety of the AECL concept from a technical viewpoint; and Phase III focused on the public’s opinions of the safety and acceptability of the concept. During all three phases, the Panel heard from a total of 531 registered speakers and received 536 written submissions, as listed in Appendix F. Participants were also allowed to submit brief closing statements in writing by April 18, 1997. The Panel considered all written and oral information received in the period from its appointment to the end of the hearings, as well as the closing statements, in preparing this report.

Among other activities, the Terms of Reference directed the Panel

• to examine the criteria by which the safety and acceptability of a concept for long-term waste management and disposal should be evaluated; and

• to prepare a final report addressing whether AECL’s concept is safe and acceptable or should be modified, and the future steps to be taken in managing nuclear fuel wastes in Canada.

CRITERIA FOR SAFETY AND ACCEPTABILITY

The Panel examined the criteria by which the safety and acceptability of any concept for long-term waste management should be evaluated (Chapter 4 of the report). In doing so, it came to the following key conclusions.

Key Panel Conclusions

• Broad public support is necessary in Canada to ensure the acceptability of a concept for managing nuclear fuel wastes.

• Safety is a key part, but only one part, of acceptability. Safety must be viewed from two complementary perspectives: technical and social.

On this basis, the Panel defined the safety and acceptability criteria as follows:

To be considered acceptable, a concept for managing nuclear fuel wastes must

• have broad public support;

• be safe from both a technical and a social perspective;

• have been developed within a sound ethical and social assessment framework;

• have the support of Aboriginal people;

• be selected after comparison with the risks, costs and benefits of other options; and

• be advanced by a stable and trustworthy proponent and overseen by a trustworthy regulator.

To be considered safe, a concept for managing nuclear fuel wastes must be judged, on balance, to

• demonstrate robustness in meeting appropriate regulatory requirements;

• be based on thorough and participatory scenario analyses;

• use realistic data, modelling and natural analogues;

• incorporate sound science and good practices;

• demonstrate flexibility;

• demonstrate that implementation is feasible; and

• integrate peer review and international expertise.

SAFETY AND ACCEPTABILITY OF THE AECL CONCEPT

After applying these criteria to the AECL disposal concept, the Panel arrived at the key conclusions listed below. The rationale for them, and an elaboration on the technical and social perspectives of safety, are documented in Chapter 5 of the report.

Key Panel Conclusions

• From a technical perspective, safety of the AECL concept has been on balance adequately demonstrated for a conceptual stage of development, but from a social perspective, it has not.

• As it stands, the AECL concept for deep geological disposal has not been demonstrated to have broad public support. The concept in its current form does not have the required level of acceptability to be adopted as Canada’s approach for managing nuclear fuel wastes.

FUTURE STEPS

The Panel considered the steps that must be taken to ensure the safe and acceptable long-term management of nuclear fuel wastes in Canada (in Chapter 6 of the report). It arrived at the following key recommendations.

Key Panel Recommendations

A number of additional steps are required to develop an approach for managing nuclear fuel wastes in a way that could achieve broad public support. These include

• issuing a policy statement on managing nuclear fuel wastes;

• initiating an Aboriginal participation process;

• creating a nuclear fuel waste management agency (NFWMA);

• conducting a public review of AECB regulatory documents using a more effective consultation process;

• developing a comprehensive public participation plan;

• developing an ethical and social assessment framework; and

• developing and comparing options for managing nuclear fuel wastes.

Taking into account the views of participants in our public hearings and our own analysis, we have developed the following basic recommendations to governments with respect to a management agency:

• that an NFWMA as described in Chapter 6 of the report be established quickly, at arm’s length from the utilities and AECL, with the sole purpose of managing and co-ordinating the full range of activities relating to the long-term management of nuclear fuel wastes;

• that it be fully funded in all its operations from a segregated fund to which only the producers and owners of nuclear fuel wastes would contribute;

• that its board of directors, appointed by the federal government, be representative of key stakeholders;

• that it have a strong and active advisory council representative of a wide variety of interested parties;

• that its purposes, responsibilities and accountability, particularly in relation to the ownership of the wastes, be clearly and explicitly spelled out, preferably in legislation or in its charter of incorporation; and

• that it be subject to multiple oversight mechanisms, including federal regulatory control with respect to its scientific–technical work and the adequacy of its financial guarantees; to policy direction from the federal government; and to regular public review, preferably by Parliament.

Until the foregoing steps have been completed and broad public acceptance of a nuclear fuel waste management approach has been achieved, the search for a specific site should not proceed.

If the AECL concept is chosen as the most acceptable option after implementation of the steps recom-mended above, governments should direct the NFWMA, together with Natural Resources Canada and the AECB or its successor, to undertake the following: review all the social and technical shortcomings identified by the Scientific Review Group and other review participants; establish their priority; and generate a plan to address them. The NFWMA should make this plan publicly available, invite public input, then implement the plan.

 

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Hydro bills set to jump nearly 10%

Posted on February 3, 2000 by energyprbe

The Toronto Star
February 3, 2000

Urban homeowners can expect an average hike of about 6 per cent in electricity costs this fall.

The Ontario Energy Board has given the go-ahead to Ontario’s 255 municipal utilities to boost rates for industrial and residential customers Nov. 1.

The increases come despite repeated promises by Energy Minister Jim Wilson that deregulation of the electricity industry – both at the generation and delivery ends – would result in lower costs to consumers.

Wilson wasn’t available for comment yesterday.

The increase will be as low as 3 per cent for high-use customers and 10 per cent for low-use customers. There are a total of about 4 million electricity customers in the province.

Each utility will still have to appear before the energy board by May 1 to get its individual rate increases approved.

Toronto Hydro has not yet established a rate, a spokesperson said.

Energy Probe, an activist organization devoted to energy issues, has estimated the average residential bill could jump by $100 a year.

Meanwhile, about 1 million rural customers served by the Ontario Hydro Services Company – one of the five units created when Ontario Hydro was broken up on April 1 – are not affected by the energy board decision.

Municipal utilities are busy incorporating and looking to make a profit for their cash-starved municipal owners. Some municipalities, however, including Toronto, are talking about selling off theirs to private operators.

Critics say the rate increases will be a nightmare for Wilson because he promised that deregulation was the road to lower energy costs.

Michael Krizanc, a spokesperson for Wilson, said electricity is expected to cost less in the long run, not right away. He also said the municipal utilities will raise prices at their peril.

“They will be answerable to their ratepayers if they do that . . . every other place where they have done this (deregulation) rates have come down,” he said.

Liberal energy critic MPP Sean Conway (Renfrew-Nipissing-Pembroke) said a legislative committee looking into power deregulation was told 18 months ago rates would go up.

“Sad to say I’m not surprised because some very thoughtful witnesses warned the legislative committee that in the short and intermediate term . . . consumers can expect electricity rates to go up and quite dramatically,” Conway said.

Tom Adams, executive director of Energy Probe, said the hike is “totally unnecessary.”

“The distribution rate being charged now is more than enough to meet the cost of the distribution system,” Adams said. “Whether these utilities remain in public hands or whether they are privatized, rates should be going down.”

The Municipal Electric Association said its members warned from the outset that rates were bound to go up because of deregulation costs and the need to generate a profit.

“Certainly in the short term one cannot expect that rates will go down,” said Bob Kanduth, a spokesperson for the association.

Kanduth said the utilities are expecting consumer outrage mainly because Wilson was telling anyone who would listen the cost of electricity was going to go down.

Ken MacDonald, of Hydro Mississauga, said the cost of power in Mississauga is expected to go up by at least 5 per cent, in part because the city is expecting a “a reasonable return on what they own, which we have not formally done before.”

Krizanc, of Wilson’s office, said the increase approved by the energy board will be offset slightly by the fact Ontario Power Generation has been told to limit what it charges for the next 40 months as it gradually loosens its virtual monopoly on power generation.

Meanwhile, New Democratic Party MPP Marilyn Churley said municipalities will use their utilities as a backdoor to raise money without actually raising property taxes.

“It is a devious way to get taxes with blessing of the Harris government,” Churley said, adding she blames the government for raising consumer expectations.

 

Posted in Reforming Ontario's Local Electrical Distribution Sector | Leave a comment

Ontario Hydro cash grab set to burn consumers

Posted on January 28, 2000 by energyprbe

Thomas Adams
National Post
January 28, 2000

Ontario’s electricity restructuring, which could and should be delivering a cheaper, more accountable electricity system, is morphing into a nightmare attack on small ratepayers and taxpayers.

Last week, the provincial government’s Ontario Energy Board announced that municipal utilities such as Toronto Hydro will be allowed to raise distribution rates by about 50% after Ontario’s so-called electricity market opens this November. Because the rate hike doesn’t apply to the electricity that Ontario residences and businesses consume — only to charges for delivering power along the municipalities’ power lines — the power bills that ultimately arrive in the mail will show only a 6% rise on average. Big businesses will see relatively small hikes, about 3%, while homeowners and small businesses will take the biggest hit, at least 10% — which will often mean $100 per year or more.

The rate hike will give the cities, who own the utilities, a windfall worth as much as $10-billion — roughly $1,000 for every man, woman and child. Yet Ontario’s municipal politicians, instead of offering to return the windfall to citizens in the form of a dividend or property tax cuts, are instead claiming they are hard-pressed to hold the line on taxes, and are warning of possible tax hikes.

Ontario’s new electricity system — which Premier Mike Harris decided should stay monopolized for another four to 10 years — is saddled with $22-billion in net liabilities, most of it nuclear-related. Taxpayers will ultimately be forced to pick up much of this. In explaining why his government has decided to maintain a monopoly in power generation, Mr. Harris points to the need to pay down that debt.

If Mr. Harris wasn’t giving that $10-billion to the cities, he could have used it to clean up almost half the remaining Hydro liability. That would have permitted the government to create a fully competitive, fully accountable power system that would have lowered, instead of raised, power rates. Instead, Mr. Harris has made the power sector a cash cow for the municipalities. Using the new Tory rules, last week Mississauga mayor Hazel McCallion — while blaming coming rate hikes on the Tories — announced she had taken assets and $200-million in cash out of Hydro Mississauga. Earlier, Toronto mayor Mel Lastman took $130-million in cash and real estate from Toronto Hydro. Other municipalities across the province are lining up at the trough.

The electricity ratepayer, meanwhile, is left in the dark by a muddled regulatory system working to hide the effect of its actions through accounting tricks and bewildering rules. To obscure the extent of consumer gouging, the Energy Board has told utilities to transfer part of the 50% rate hike — with interest — to bills that will be borne by customers several years down the road. In effect, while the municipalities will average a 50% increase in the rates they begin collecting in November, consumers will first pay less than 50%, and later more, before rates level off at the regulator-approved 50% hike.

The distribution rate hike is only the beginning of the ordinary ratepayer’s woes. Thanks to an October Energy Board decision, passive residential customers and other small users will be scammed through the way they are billed for electricity. Under the Energy Board’s scheme, all small customers will be allowed to buy power either at a regulated average price or at a free-market price. In winter and summer, when heating and air-conditioning demands raise the free-market price of power, the regulated price will generally be cheaper. Motivated customers will buy power on the competitive market in spring, switch to the regulated power in summer, go back to the competitive market in fall and then switch back to regulated prices in winter. Residential customers jumping back and forth each season can save perhaps $100 per year, and perhaps twice as much if they are heavy users of electric heat and air conditioning. These savings will primarily be recovered by adding a hidden surcharge to the bills of the passive, non-jumping customers.

With power rates varying wildly from house to house; with power-supplying companies seeing large influxes and exoduses of customers each season; and with surcharges hitting customers each year, the electricity marketplace will be in chaos. Once it dawns on the public that these machinations have been brought to them courtesy of their government regulator — who is presumably there to protect them — the outcry will be loud and long, and heads may roll. Anticipating this outcome, many municipal utilities, as well as a lobby group called the Vulnerable Energy Consumers Coalition, want to force consumers to take their power from a monopoly provider assigned to them by the regulator. This is deregulation?

The degeneration of the electricity marketplace is caused partly by Mr. Harris’ failure to quickly break up the old Hydro monopoly, and partly by his transformation of the Energy Board — once an independent, quasi-judicial agency — into a servile branch of government. New legislation passed by his government removed the due process provisions that once protected the public and bound the regulator. As a result, the government bureaucrats at the Energy Board became free to force consumers to take a $10-billion hit, and free to transfer that $10-billion to the municipal governments, without calling sworn evidence, and without subjecting that evidence to cross-examination by parties that might have different ideas about the disposition of those funds. The Energy Board deliberated largely behind closed doors, using rules that were made up on the fly, before arriving at its decisions.

Presiding over this brave new era is Energy Board Chairman Floyd Laughren, Mr. Harris’ hand-picked-choice to protect consumers and taxpayers in implementing his restructuring of Ontario’s electricity system. Mr. Laughren — the former NDP finance minister — doubtless agrees with his board’s finding that this rate hit was “just and reasonable.” But he’s not necessarily proud.

To deflect responsibility for its decision, the board is already telling the municipalities that, although they may raise rates by 50%, they should exercise restraint. The municipalities, knowing the public will blame them for the inflated bills that will start being mailed in November, have already begun to blame the province, saying the rate hikes stem from privatization and deregulation. And the provincial government will return fire by blaming the mayors for not controlling their utilities.

While there’s more than enough blame to go around, the buck must ultimately stop with Mr. Harris, who — despite numerous examples of successful restructurings in other jurisdictions — is botching the all-important task of modernizing one of the continent’s largest power systems. Even before the Energy Board’s rate hit, he had piled billions in hidden taxes onto ratepayers, partly to pay down Ontario Hydro’s historic liabilities and partly to prop up the accounts of the government’s reincarnation of the old Ontario Hydro power-producing monopoly, Ontario Power Generation Inc.

Mr. Harris has clear choices. He can try to spin his way out of the problem by blaming the mayors. He can throw more money at the Hydro system — which still accounts for 30% of the province’s entire debt. Or he can do what he should have done all along: He can bring in true competition in the electricity generation business by immediately breaking up and privatizing the generating monopoly, and curb monopoly excesses in the electricity distribution business by giving back to the Energy Board the integrity and rigor required for honest regulation.

Tom Adams is executive director of Energy Probe, a Toronto-based watchdog organization.

 

Posted in Reforming Ontario's Local Electrical Distribution Sector | Leave a comment

Petro-Can hopes

Posted on January 27, 2000 by energyprbe

Tom Adams
National Post
January 27, 2000

Kudos to our federal government if it gets out of Petro-Can, a venture it should never have started. Once they are no longer an investor, the feds may do a better job enforcing environmental rules in the oilpatch. The sale proceeds might constructively be used restoring environmental enforcement, with any leftovers going to remediate federal contaminated sites.

Posted in Fossil Fuels, Oil | Leave a comment

Nuclear sites the targets in cancer probe

Posted on January 21, 2000 by Other News Sources

Peter Calamai -cites Norm Rubin, Director, Nuclear Research, Energy Probe
Toronto Star
January 21, 2000

OTTAWA – A new national surveillance program will look for higher rates of cancer among people who live near nuclear power stations, uranium mines, atomic research facilities and fuel-processing plants.

The program, which the Atomic Energy Control Board says is the first continuing surveillance scheme of nuclear installations in the world, is in response to widespread public fears.

It is expected to be under way within months in an Ontario pilot project, possibly centred on the Bruce or Pickering nuclear stations and will be extended nationally by 2002. The program will be run by the federal health department and the atomic control board and will use existing data collected by Ontario Cancer Care and similar agencies in other provinces.

Details of the program were released here yesterday at a regular meeting of the agency, which is Canada’s nuclear safety watchdog.

“We want to make sure there are no surprises for us,” staff epidemiologist Suzana Fraser told the five-member governing board. She said science can’t always anticipate everything.

Setting up the surveillance system marks a major shift for the nuclear watchdog, which has said nuclear operations cannot produce cancers or other radiation-linked health problems because government rules keep radiation doses to the public well below problem levels.

In effect, the surveillance program could provide an early warning in case new scientific research invalidates current assumptions about safe radiation levels.

In an interview, Fraser said the chief reason for setting up the program was mounting public concern over sporadic reports that link living near nuclear installations with various health problems.

“Primarily we’re doing this because we continue to have public concern – public fears, really – which can be detrimental to public health,” she said.

The surveillance program would likely apply to seven locations in Ontario: Nuclear power stations such as Bruce, near Kincardine; Darlington, at Newcastle and Pickering. Nuclear research facilities at Chalk River and possibly at McMaster University in Hamilton. Uranium refining and fabricating plants at Port Hope. The now-closed uranium mine at Elliot Lake.

Exactly how to cast the surveillance net around each community will be determined by the pilot project, said Fraser.

Two earlier AECB-sponsored studies examined the rates of childhood leukemia within 25 kilometres of the Bruce and Pickering power plants.

Those studies, carried out in 1990 and 1991, found the leukemia rates in children up to 14 years old living near the two nuclear reactors were 40 per cent higher than the provincial average.

But consultants hired by the watchdog agency said these higher rates could be simply chance.

Another 1991 report counted 24 Down syndrome babies born between 1973 and 1988 to mothers who lived near the Pickering power station. The expected number would have been 13 according to the provincial average.

More recently, other studies have linked higher breast and prostate cancer rates with living near nuclear power plants. Yet the weight of scientific opinion is that no clear causal connection has been demonstrated.

“We want to make sure that we’re right,” Fraser said. “We’re applying the precautionary principle.”

Prominent critics of the nuclear industry welcomed news of the program.

“I’m glad they’re starting somewhere,” said Dr. Rosalie Bertell with the International Institute of Concern for Public Health in Toronto.

But Bertell said the surveillance should also be looking at birth defects and any disease with a genetic component, such as diabetes or some heart conditions.

“Many diseases can be initiated by radiation and then carried on in the family,” she said.

Norm Rubin, nuclear expert with Toronto’s Energy Probe, said he was worried that the control board might not rigorously pursue apparent health problems flagged by the surveillance scheme.

“They’ve already tried to explain away the 40 per cent leukemia; they’ve explained away clusters of Down syndrome.

That seems to be what they’re best at – explaining away,” Rubin said.

Rubin also said that the control board had a credibility problem since it had always asserted that radiation releases at higher-than-existing levels would not cause cancers or other illness.

“Nobody is going to get promoted for discovering that AECB-approved releases have led to health problems.’

A national surveillance program has only become feasible recently, according to board officials, because of major improvements in the initial gathering of cancer incidence data and the rapid compilation electronically.

The program will examine these reports for closely defined areas around each of the nuclear installations, an analysis which is not done now.

The region studied could be a simple circle but it might also be lined up with measurements of radiation spread by a smokestack plume.

Another option is to check the cancer data for disease clusters near nuclear facilities.

Advice on which approach to use will come from the Laboratory Centre for Disease Control, a federal health agency handling the data analysis for the control board.

Posted in Nuclear Safety | Leave a comment