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Will nuclear power bankrupt Ontario Hydro/OPG once again?

The following post was written by Angela Bischoff, Ontario Clean Air Alliance’s Outreach Director.

In 1998, seven of Ontario Hydro’s nuclear reactors had to be unexpectedly shut down for safety reasons. All of these reactors were shut down for more than five years. Two of them are still shut down.

As a result of the nuclear shutdown:

  • By 1999 Ontario Hydro was effectively bankrupt and was subsequently split into five different companies. Ontario Power Generation (OPG) got the nuclear stations, while $20 billion of the stranded nuclear debt was transferred to the Ontario Electricity Financial Corporation. We are still paying down the nuclear debt today.
  • We had to increase the output of our dirty coal plants by 120% to keep our lights on.
  • Between 2002 and 2016, Bruce Power’s and OPG’s rates rose by 54% and 60% respectively to pay for nuclear power, including the re-start of the five shut down nuclear reactors.

In September 2016, OPG told the Ontario Energy Board that it needed to increase its nuclear rates by 11% per year for 10 years (180%) to pay for the continued operation of the Pickering Nuclear Station and the re-building of Darlington’s four aging reactors. According to OPG, the 180% rate increase was necessary to “maintain its investment grade credit rating and ensure sufficient cash flows.”

Today Premier Wynne announced that she is directing OPG to take on billions of dollars of additional debt to ensure that Ontario’s electricity rate increases for the next four years will be held at the rate of inflation.

While Premier Wynne’s desire to reduce our electricity rates is understandable, her solution raises a number of important questions:

  • Will OPG go bankrupt if the Darlington Re-Build goes over budget and our demand for electricity continues to fall?
  • Why didn’t the Premier cut costs before adopting a band-aid solution that will jeopardize OPG’s financial integrity and lead to dramatically higher electricity prices five years from now? Specifically, why didn’t she direct OPG to close its high-cost Pickering Nuclear Station when its licence expires in 2018?
  • Why didn’t she direct OPG to cancel the Darlington Re-Build Project after the first reactor re-build is completed and require all future nuclear power projects to compete fairly with other supply and conservation options?
  • Why isn’t she buying more low-cost water power from Quebec? In October 2016, Premier Wynne chose to buy only 2 billion kWh per year of low-cost water power from Quebec despite the fact that we can import 16.5 to 18.5 billion kWh per year from Quebec with our existing transmission lines.

These questions once again raise the larger question of whether we are running our electricity system for the benefit of ratepayers or the nuclear industry.