Request for reactor costs guarantee no surprise, says Keir

New Brunswick Telegraph-Journal
May 21, 2009
Rob Linke

Request for reactor costs guarantee no surprise, says Keir

Energy Minister Jack Keir says it's no surprise that Ontario is reportedly asking Ottawa to backstop any cost overruns that may occur if the province buys new nuclear reactors from Atomic Energy of Canada Ltd.

Keir says he's informally asked the federal government for similar guarantees.

Keir has long maintained building a proposed second reactor at Point Lepreau would pose no risk to New Brunswick taxpayers because it would be financed by the private sector.

But "my guess would be that any private-sector investor in a project like this would be looking for some kind of guarantee by the builder to say, 'you tell us at the end of the day what the cost will be so we can make our business case up front.'

"So, in a roundabout way, the private sector is going to be asking for something very similar to what the Ontario government is."

AECL, a federal Crown corporation, is the leading bidder to build Ontario's next-generation nuclear reactors, edging out leading French competitor Areva, according to a report in the Globe and Mail. Sources told the newspaper that Ontario wants to open negotiations with the federal government to provide backing for AECL's price guarantees.

Keir said it would be fair for Ontario to ask for federal guarantees - just as he has informally told members of the Harper cabinet that investors backing Lepreau 2 would likely want a guaranteed price.

"Any ACR-1000 built in Canada, if it's going to get risk mitigated in one province, it's going to have to have risk mitigated in every province," said Keir.

"We've asked for similar opportunities in New Brunswick, even if it's private-sector driven.

"I think the private sector wants to mitigate as much risk as they can."

Team Candu, a consortium that includes AECL and private-sector partners, proposed two years ago to build New Brunswick's second nuclear reactor at Lepreau.

Under a so-called merchant model, its construction would be privately financed.

Keir said the greatest risk in any first-of-a-kind technology is avoiding cost overruns.

The ACR-1000 model is still in the design phase and has never been built.

Greenpeace nuclear campaigner Shawn-Patrick Stensil said that to ask Ottawa to pick up the tab for any cost overruns, while asserting New Brunswick taxpayers would be protected, ignores the reality "that there's only one taxpayer."

Stensil said any request for the public to absorb cost overruns would be "a pretty significant provincial ask.

"It's basically asking the federal government to get into subsidizing provincial energy systems.

"That's something we need to have a transparent debate about because they're not subsidizing the costs of wind developers."

The federal government was loathe to help pay for the cost of refurbishing the existing Candu 6 reactor at Point Lepreau when it was asked to do so by former New Brunswick premier Bernard Lord.

Ironically, federal taxpayers are now picking up most of the extra costs of the delays in the refurbishment.