Nuclear bidders unveiled

Four companies - including AECL - competing to build provinces new nuclear reactors

The Canadian Press: Chinta Puxley - Mar 07, 2008

Under pressure from Ottawa to choose Atomic Energy of Canada Ltd. to build Ontario's first new nuclear reactors in more than a decade, the province announced today that the Crown-owned company is among four in the running for the job.

While Premier Dalton McGuinty has said the government is looking at the international market to get the best deal for Ontario taxpayers, the federal natural resources minister has argued Canada's nuclear future hinges on whether home-grown technology is used in Ontario.

The province plans to close its coal-fired plants by 2014 and is counting on residents to conserve energy, but Energy Minister Gerry Phillips said Friday the lights can't stay on without new nuclear capacity at either the Darlington or Bruce power plants.

"Nuclear has been the backbone of our electricity system," Phillips said, noting more than half the province's energy last year came from nuclear plants. "With any major facility ... it requires refurbishment or replacement over time. That's essential for our plan over the next 20 years."

Despite critics who say investing in nuclear is expensive and misguided, Ontario plans to spend up to $40-billion building two new nuclear reactors and refurbishing up to half-a-dozen others over the next two decades.

Four companies have been asked to submit proposals, including Atomic Energy of Canada Ltd., Areva NP, GE Hitachi Nuclear Energy and Westinghouse Electric Company, Phillips said.

Their proposals, due by the end of June, will be examined by a large team of senior bureaucrats from various government ministries, as well as representatives from Ontario Power Generation and Bruce Power.

Ontario has come under pressure recently to choose the Candu reactors built by Crown-owned AECL as opposed to a foreign company.

"We must build the Candu technology at home," Federal Natural Resources Minister Gary Lunn told the Globe and Mail in December 2006. ``It's imperative for the Canadian nuclear industry. If we can't compete at home, I would suggest it wouldn't look very good for our technology elsewhere around the world."

Phillips' predecessor, now Finance Minister Dwight Duncan, admitted previously that "AECL effectively becomes a Candu repair shop" if it doesn't win the Ontario contract.

A group of companies that rely on the Candu industry have also banded together to lobby the province to "provide a long-term multi-billion dollar economic boost for Ontario's economy and send a strong signal of support to potential international customers," the group said in a statement Friday.

But Phillips said AECL won't be treated any differently than any other company. All proposals will be judged based on their benefit to the Ontario economy, their ability to deliver new nuclear reactors by 2018, the cost of power and the risk assumed by the vendor, Phillips said.

"Let's get all four of them sharpening their pencils," said Phillips, adding the province doesn't want to see taxpayers or ratepayers on the hook for cost overruns or delays.

"Our objective will be to minimize the risk to ratepayers, to the public. One of the key criteria we'll use is demonstrating that they're prepared to take on the maximum risk (and) that they're prepared to deliver on time."

The aim is to negotiate a tentative agreement by the end of the year, with shovels in the ground by 2012, Phillips said. The reactors likely wouldn't come online until 2018, leaving Ontario with a four-year gap between the closures of the coal-fired plants in 2014 and the new nuclear generation.

But Phillips said the province has planned for that and doesn't expect a shortage of electricity that would cause utility rates to skyrocket.

"I think we've got a really good plan," Phillips said, adding the province is increasingly relying on new sources of renewable energy and conservation.

Still, critics say Ontario is making a big mistake investing in expensive nuclear technology that has a history of cost-overruns and delays when it should be finding cleaner energy to meet the demand.

Shawn-Patrick Stensil, with Greenpeace, said the Liberals initially promised new nuclear reactors would be up and running by 2014. That's now been delayed by four years while the Liberals remain blindly "wedded to nuclear power," he said.

"We're gambling our electricity future on the nuclear industry," Stensil said. "To fight climate change, we don't have the time to wait around for new reactors to be built. We should be investing in energy options that are quicker to deploy."

NDP Leader Howard Hampton said the Liberals should be aggressively encouraging energy efficiency and conservation by offering low-interest loans to landlords to retrofit their aging apartment buildings.

With the province's focus on expensive nuclear technology, Hampton said it doesn't matter who ends up getting the contract - people will end up paying more for their electricity.

"You can try to butter this up any which way and say you've got guarantees from Company X and guarantees from Company Y but the reality is the ratepayers always end up paying," he said.

Conservative John Yakabuski said the Liberals have been in power for over four years but they've been dragging their feet on nuclear refurbishment for so long that consumers will be left out in the cold after 2014.

"It's just gross incompetence," he said. "These guys don't have a plan."

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