If the Ontario government is looking for a good place to cut consumers’ electricity bills, it could start with Ontario Power Generation’s expensive plan to keep the Pickering nuclear generating station in operation beyond 2020, argues economist Brady Yauch, executive director of the Consumer Policy Institute.
“While OPG and the province’s energy planning agency say that keeping the reactors running for four more years will be a net benefit to ratepayers, those ‘benefits’ are built on sand,” he writes in a recent Financial Post op ed. “Feeding this white elephant could easily cost ratepayers more than half a billion dollars.”
OPG’s own studies show that Pickering is one of the least reliable nuclear installations in North America, Yauch notes. “Not only do Pickering’s nuclear reactors perform poorly, but they do so at high cost,” he writes. “The average all-in cost for each unit of power from Pickering is more than 70% higher than power produced at the top-performing nuclear plants across North America,” and “50% more costly than generation at OPG’s other nuclear plant, Darlington.”
He adds that analysis supporting an extended life for Pickering was based on “aggressive” assumptions about competing natural gas prices—and even so, it concluded that Pickering stood a 70% chance of producing a net cost, rather than a net benefit, for consumers. “If a number of other optimistic assumptions in the analysis—regarding operating and capital costs, as well as performance metrics that ignore Pickering’s dismal track record on meeting its own production forecasts—were updated, they would also show that Pickering is more likely to be a drain on ratepayers.”
Notwithstanding the relatively positive light Yauch’s assessment places on the Darlington nuclear generating station, the Ontario Clean Air Alliance charged last week that OPG’s Darlington rebuild is already costing more than expected, with work on an operations support building and an auxiliary heating system running 39% and 135% over budget.
“These are not projects with nuclear-level complexity—they are basic infrastructure,” OCAA notes. “Yet OPG, despite all its assurances that things would be different this time, has failed to complete these simple first-stage projects on budget. That does not bode well for what will happen when it begins to tackle the truly complex task of opening up 30-year-old reactors and replacing miles of radioactive tubing and other sensitive components.”
OPG is asking for a 180% rate increase to fund its work at Pickering and Darlington, and “every nuclear project in Ontario’s history has gone massively over-budget—on average by 2.5 times,” OCAA notes.