Ontario admits expiry of AECL bid a problem

TORONTO, ONTARIO - Ontario's plans to build two new nuclear reactors could suffer yet another delay this month with the expiration of the only bid accepted by the province, from Atomic Energy of Canada Ltd., the government conceded.

The province announced in 2006 that it wanted to build two new nuclear reactors to supply electricity, and eventually rejected two foreign bids, from Areva of France and Westinghouse of the United States, in favour of Atomic Energy of Canada Ltd.

Ontario also found AECL's bid was far too expensive — at a reported $26 billion — and has been trying to negotiate a better contract. That's been difficult since the federal government decided to restructure the nuclear agency, said Premier Dalton McGuinty.

"The federal industry is up in the air and we're not exactly sure where it's going, who's going to end up owning it." McGuinty told reporters.

"Until that's settled, it's very difficult for us to pursue any concrete conversations with the federal government."

The province could simply extend the deadline so the bid doesn't expire, or it could even open the bidding process again for Areva and Westinghouse, although that's not the preferred option, said Energy Minister Brad Duguid.

"We're still in discussions — I wouldn't call it negotiations exactly — with AECL and the federal government," said Duguid. "I really wouldn't rule anything out at this point in time, and at the same time I would hope that the federal government and AECL can work in good faith with us and get to a price that we feel is acceptable."

Ontario's Liberal government has dithered and delayed the decision on new nuclear reactors for far too long, the Opposition charged.

"They are so far behind the eight-ball already because of the unwillingness or fear to make a decision," said Progressive Conservative critic John Yakabuski. "Clearly the issue is they've been dragging their feet and doing nothing since 2006."

The New Democrats said the original decision to build new nuclear reactors was the wrong one, and the province now has the chance to abandon the idea in favour of renewable forms of energy and conservation programs.

"They should have made the decision to go with green energy and efficiency," said NDP critic Peter Tabuns. "I'm don't know where they're going to go, and frankly I'm not sure they know where they're going to go."

Critics say the delay in the new build means Ontario will face much stiffer competition for construction materials and skilled labour to build the nuclear reactors.

U.S. President Barack Obama announced that he wants to build a new generation of reactors and said his country will have to play catch-up to join the global nuclear renaissance. "There are 56 nuclear reactors under construction around the world," said Obama: "Twenty-one in China alone; six in South Korea; five in India."

It's no surprise the Americans are taking a new look at nuclear power, said McGuinty.

"There's a growing awareness that of all the difficult choices associated with the production of electricity, it's not really responsible to completely eliminate that one," he said.

Meanwhile, Duguid announced that it will cost between $6 billion and $10 billion to refurbish the Darlington nuclear power station to extend its life by another 30 to 40 years. It will be another four years before a more firm price estimate can be established, he said, with construction to start in 2016.

Ontario Power Generation also announced this week that it would spend $300 million to keep the Pickering nuclear station going for another 10 years before it is mothballed.