LEPREAU Candu 6 plant

Greenpeace petition questions Lepreau refit funding
Energy: Ottawa has until March to respond to environmental group's queries
Published Monday November 9th, 2009
Rob Linke
Telegraph-Journal
http://telegraphjournal.canadaeast.com/search/article/851226

OTTAWA - The federal government has until March to respond in writing to 
an argument that the hundreds of millions of dollars Ottawa is spending 
to refurbish Point Lepreau is a backdoor subsidy to New Brunswick.

The federal taxpayer is increasingly being exposed to financial risks 
for delayed and over-budget projects like Lepreau, says the argument.

It is contained in a petition filed this week with the Commissioner of 
the Environment and Sustainable Development.

"Because of the high cost and risks involved, Candu (reactor) operators 
have sought to increase the viability of such projects by "¦ 
transferring financial risk for cost overruns, delays and even future 
performance" to Atomic Energy of Canada Ltd., a federal Crown 
corporation, says the petition.

It was filed by energy campaigner Shawn-Patrick Stensil of the 
anti-nuclear group Greenpeace Canada.

He said Lepreau is a case study in his petition because other 
jurisdictions facing decisions about building new reactors, or giving 
old ones mid-life overhauls, need to learn from it.

"Lepreau is a warning," Stensil said in an interview.

"Canadians are being put on the hook for these costs at Lepreau and New 
Brunswickers will be on the hook if Ontario rebuilds 16 reactors as 
planned."

The project to extend Lepreau's operating life by 25 years was supposed 
to take 18 months, have the plant back online this fall and cost $1.4 
billion on a fixed-price contract.

Delays mean the plant won't be online until February 2011 at best.

AECL is picking up the extra tab other than the cost of replacement power.

That's being paid by NB Power, and is expected to double from $400 
million to roughly $800 million.

Perhaps surprisingly, Greenpeace draws on free-market economic 
principles in making the case against federal funding for nuclear power 
generation.

In fact, Greenpeace supports the privatization of AECL because it would 
have to account for its costs internally, which it believes would create 
a level playing field offering renewable energy fairer competition.

Federal Natural Resources Minister Lisa Raitt has launched a 
restructuring of AECL that is expected to include partial privatization.

"We didn't come at this as a left- or right-wing perspective," said Stensil.

"Our long-term principles are precaution and sustainability, which 
Canada has undertaken as part of its international obligations."

Raitt defended AECL and Canada's nuclear industry to the Commons natural 
resources committee this week.

She said the industry generates 30,000 jobs and 15 per cent of Canada's 
electricity worth roughly $6 billion.

And, with nuclear set to play an increasing global role to address 
climate change, positioning AECL for growth is a key goal, she said.

So is maximizing the return on the investment already made in nuclear is 
a key goal.

Greenpeace's petition argues more public funding for nuclear is putting 
good money after bad.

The petition is not the sort filled with names.

With 12 pages of heavily footnoted research critical of public funding 
for the nuclear industry, it reads more like a position paper or legal 
brief - with pointed questions.

The commissioner runs a branch of the federal auditor general's office.

It has a little-used process that facilitates Canadians asking 
well-researched questions of any federal department about environmental 
issues.

The law obliges the government to reply within 120 days - and the 
commissioner monitors the answers based on their relevance and thoroughness.

Stensil asks about 30 questions of the Department of Natural Resources, 
which funds AECL.

On Lepreau, he asks Natural Resources to summarize the performance 
guarantees in the refurbishment contract AECL and NB Power signed in 2005.

It was never made public.

He also asks Natural Resources to provide a breakdown of the $500 
million AECL has on its books for off-balance sheet or contingency 
liabilities, which means potential future costs from things such as 
project overruns.

This week, federal government documents revealed AECL has been given an 
extra $200 million to allow it to complete refurbishments at Lepreau and 
two reactors run by Bruce Power in Ontario that are also months behind 
schedule.

David Willey is the director for environmental petitions in the 
commissioner's office.

He said it can be hard to pinpoint a direct cause-and-effect between 
petitions and later government action.

But petitions have built momentum for issues, helped prompt government 
action and help the auditor general decide what programs and spending to 
audit.

"The process creates a dialogue between a petitioner and their 
government," said Willey.

Natural Resources is not obliged to make any policy or spending 
decisions based on the petition.

It can also get an extension beyond 120 days if it notifies Greenpeace.

An AECL spokesman did not respond to a request to comment Friday.

Also Friday, federal Green Party leader Elizabeth May issued a statement 
condemning Ottawa's decision to give $200 million in extra funding to AECL.

"This amounts to more subsidies to a nuclear white elephant," she said 
in a release.

Lepreau was one of the world's top-performing nuclear plants before it 
started to show its age.

The 635-megawatt Candu 6 plant went into service in 1983.

It typically provides between 25 and 30 per cent of the province's power.