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Epic botch-up could leave Ontario cold

Globe and Mail - December 5, 2003
by Murrary Campbell


The sentences are straightforward and the language direct. This was a botch-up of epic proportions.

The elegant, 19-page summary of the latest debacle at the Pickering nuclear-generation station makes for brutal reading for anyone who believes that human beings have the ability to organize things. The refurbishment of the plant was launched in 1997 and is still incomplete, years behind schedule and wildly over budget.

Immeasurably worse, no one seemed to care much that good money was being thrown after bad. Over three years, there were 11 different estimates of how much the refurbishment would cost that took the total project expenditure to $2.5-billion from $800-million. There were 13 different guesses about when the first reactor unit would be brought back on line that stretched from the summer of 2000 to the actual startup last September.

"These facts are alarming," said Jake Epp, the former federal Progressive Conservative cabinet minister who poked his nose into the murky waters that surround Ontario Power Generation, the Crown-owned agency that owns Pickering. Indeed. And what's worse is that while the OPG board, its senior officers and the former Conservative government were failing to exercise much oversight, the feeling was apparently that everything was just ticketty-boo.

How else to explain that Ron Osborne, OPG's president and CEO, received a $752,813 bonus on top of his salary of $825,000 and that, in addition, he was blessed with another $587,500 for "outstanding performance" during the years in which the Pickering disaster was shaping up?

Neither Mr. Epp nor Energy Minister Dwight Duncan could explain how all this could unfold.

Mr. Epp came closest, saying it's as if you suddenly find out you need more money when you're more than halfway across a river. "And the decision is made to spend more money and get across the river," he said.

The metaphor is apt because the government now finds itself up a very deep and very long river without a paddle.

Ontario cannot now supply itself with the power it needs during very cold or very hot weather. It has been warned there's a prospect of blackouts this winter. Worse, generation plants all across the province are aging and it's expected that 40 per cent of the capacity will have to be shut down in the next 15 years.

And if that weren't enough, the new Liberal government is committed to shutting down by 2007 Ontario's five coal-fired generation plants, which would remove more than 25 per cent of electrical capacity -- about 8,000 megawatts -- from the transmission grid.

What's an energy minister to do? Measures to increase conservation and energy efficiency will help and so will so-called co-generation, where industries feed back on to the grid the byproduct of their manufacturing processes.

But there is still the need for massive new supplies of power. Where will it come from? The potential for new power from hydro-electric sources is limited. There is a vigorous debate about the price and availability of natural gas. And hardly anyone, apart from the truly fervent, believes that wind-powered generation will ever be anything more than a niche supply.

That leaves nuclear power. Mr. Duncan must first decide -- very soon -- whether he can afford another $3-billion to bring back the three remaining laid-up units at Pickering and the 1,500 megawatts they represent. The mess spawned by the first reactor will make that difficult. When MPP Marilyn Churley-NDP charges that "nuclear power is a billion-dollar boondoggle [and] . . . a financial black hole that over the years has cost Ontario billions of dollars," it's hard to argue.

Atomic Energy of Canada Ltd., which designed all 22 reactors in Ontario, says it has a new generation of its Candu unit that could be built in 36 months and provide 700 megawatts for $1.5-billion. It points to its recent experience in China to show that it can deliver on budget and on time.

Mr. Duncan says he hasn't ruled out further nuclear projects. The question is whether OPG inadvertently made his decision for him.


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