Foreign firms invited to A-plant sale

Ontario ready to turn Bruce nuclear station private

Toronto Star - October 4, 1999
By Stuart Laidlaw — Business Reporter

The province has begun a process that could result in the sale of the Bruce nuclear plant - possibly to foreign private interests, The Star has learned.

"All options are on the table," said Robert Power, a lawyer for the township where the Lake Huron power station is located and a past adviser to the Ontario government on the nuclear industry.

Ron Osborne, president and chief executive of Ontario Power Generation Inc., will go to the plant tomorrow morning with his senior nuclear staff to announce that, as part of deregulation of the hydro industry in the province, he is launching a full-scale review of the nuclear plant.

Ontario Power Generation is one of five successor companies to Ontario Hydro. It operates all the power generation plants of the former provincial utility.

Osborne has said in the past that he is interested in bringing in private investors both for their money and their expertise in running nuclear plants.

He is expected to announce that private foreign companies will, as part of the review, begin examining the plant to see if they want to invest in it.

Last year, Ontario Hydro hired consultants Salomon Smith Barney to scout out private companies interested in buying its nuclear plants or partnering with the province.

During last spring's provincial election, Premier Mike Harris said his government would explore ways for private companies to help Ontario Power Generation run its nuclear reactors.

Ontario Energy Minister Jim Wilson could not be reached for comment.

The review to be announced Tuesday will look at ways to bring the private sector into the nuclear industry, and will examine everything from contracting out services to selling the reactors, Power said.

The review will also look into allowing workers to pour money into the nuclear facilities. Osborne rejected a plan last year by the Power Workers Union to use $3.7 billion out of its pension fund to buy the Bruce plant, saying the idea was premature.

The plant employs about 3,000 people.

Power said that could involve anything from companies taking a minority stake in the plant to buying it outright, adding that allowing in private investors would bring a much-needed infusion of cash.

Details of the review, such as who will conduct it, how long it will take and which companies might be involved, are still not known.

"We'll have to wait to see what the big guy has to say Tuesday," Power said.

Several foreign power companies have already set up offices in the Toronto area in anticipation of deregulation.

They include British Energy PLC, which owns several nuclear plants in Britain and abroad, including a part ownership in Three Mile Island in the United States, and has said it is interested in buying into Ontario's nuclear industry.

The company was not a partner in Three Mile Island during the partial meltdown of a reactor in 1979.

Other foreign companies setting up shop here include Houston-based Enron Corp., the largest buyer and seller of natural gas in the United States, and American Electric Power Corp. of Columbus, Ohio, the largest American producer of coal-fired power.

Any investor in Hydro's nuclear assets would almost certainly be foreign, Power said.

"There's really nobody domestically with the expertise to come in and make a pitch," he said.

He stressed that the Atomic Energy Control Board (AECB) will continue to regulate the plant under private ownership, if that is the option that is chosen, and that any investor will have to abide by its safety regulations.

"The AECB is going to expect them to play by AECB rules," he said.

The review will focus only on the Bruce plant, but could set the stage for an evaluation of what to do with the utility's other nuclear plants in the future.

The decision to go ahead with the review was made at a board meeting of Ontario Power Generation three weeks ago.

The Ontario Energy Board is still grappling with several issues surrounding deregulation, including finalizing how homeowners' bill will be determined and how Ontario Hydro's debt will be paid off.

Power, a partner in a Toronto law firm specializing in the electricity industry, advised an Ontario government committee looking into the nuclear industry two years ago.

The group recommended more private-sector involvement.

He said local communities near the plant support private-sector involvement if it will help ensure its continued operation and as long as current safety standards are maintained.

"The community is very supportive of all public-private options, but safety is paramount," he said.

About half the plant was shut down in August, 1997, so the provincial utility could concentrate on improving the faltering performance of its newer reactors at the Pickering, Darlington and Bruce locations.

Power said the review will look at the entire plant, both the part that is operating and the part that is not.

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