Lepreau Refurbishment Fiasco was “Made in New Brunswick”

25 AUGUST 2010

This week’s claim by Premier Shawn Graham that the government of the day, both the sitting Conservatives and the opposition Liberals, did not understand the risks involved in the Point Lepreau refurbishment is simply false, according to the Green Party.

Premier Graham was responding to Prime Minister Harper’s assertion that the Province entered with eyes wide open into a contract with Atomic Energy of Canada to tear down and rebuild the reactor core.

“I disagree with Stephen Harper on virtually everything else, but on this one he is right,” said Green Party president and candidate in the Charlotte-Campobello riding, Janice Harvey.  “Bernard Lord’s government was told in no uncertain terms by the Public Utilities Board that the uncertainties and risks involved in refurbishment were too high and they should not proceed.  Encouraged by Opposition Leader Shawn Graham, Premier Lord ignored this advice and went ahead anyway.”

In 2002, the Public Utilities Board was asked to review the proposed refurbishment project and alternatives to it.  During extensive hearings at which NB Power experts testified under oath and evidence was subpoenaed, a long list of technical and financial risks were identified.  These included the fact that this would be a first-time refurbishment of a CANDU-6 reactor which could lead to serious delays, the cost of replacement power, and the uncertainty about the reactor’s performance when it was brought on-line.

“The PUB’s concerns about the refurbishment have been a matter of public record for years, so Shawn Graham’s mock surprise is just a little precious,” said Harvey.

The evidence presented to the PUB also revealed that high capital and maintenance costs and deteriorating performance at Point Lepreau made electricity generated there the most expensive on the New Brunswick grid, at that time coming in at nearly 11 cents per kilowatt hour.  In addition, the Province was forced to swallow $450 million of Lepreau’s debt because the reactor wore out before it’s mortgage could be paid off.

“When exposed to the scrutiny of the expert energy regulatory board, Point Lepreau’s refurbishment failed all the risk tests,” said Harvey.

The PUB recommended against the refurbishment, stating the risks were too high and therefore the project was not in the public interest.  The PUB’s preferred alternative, should additional electricity be required to replace Point Lepreau, was a high efficiency combined-cycle natural gas generator which could be built reliably in the same proposed time frame (18 months) and for less cost to New Brunswick without the need to buy replacement power.  Such plants are virtually turn-key operations.

“Why the Conservatives and Liberals ignored the PUB and went ahead anyway can be chalked up to two factors -- politics and blind ideology,” Harvey said.  “First, there is an intense political lobby to keep the nuclear industry going in New Brunswick, despite its proven financial failure.  This comes from the nuclear and construction industry, the unions, and the business community in Saint John which profits mightily from high cost projects.  Second, for the political and business class, nuclear technology and megaprojects are status symbols.  They irrationally refuse to face the facts that clearly demonstrate that this is absolutely the wrong road to take – with disastrous consequences.”

According to Harvey, both Liberals and Conservatives demonstrated a gross failure of judgment and leadership from the very beginning of this project.  “They had full information and objective, credible recommendations from their own energy regulator against the refurbishment but they went ahead anyway.  In this decision alone, they have forfeited their parties’ claims that there are only two credible options for the governing party in this province.”

Harvey continued, “New Brunswickers are now stuck with a nuclear albatross that we don’t need and can’t afford.  Our children and grandchildren will be paying for this failure of judgment far into the future.  David Alward’s promise of a rate freeze is just electioneering.  Once the Lepreau bill comes in, no government is going to be able to protect New Brunswickers from higher power rates, unless the taxpayers take it on.”

“The sad thing is that it was completely avoidable.  This fiasco was ‘made in New Brunswick’ – full stop.  There will be a great deal of buck passing and re-writing history in the election campaign.  But the Green Party is committed to speaking the truth on this issue.  New Brunswickers must fully understand what happened and why.  We are offering ourselves as an alternative to re-electing either of the two parties that were complicit in this colossal breach of trust with the citizens of New Brunswick,” Harvey concluded.

This week’s claim by Premier Shawn Graham that the government of the day, both the sitting Conservatives and the opposition Liberals, did not understand the risks involved in the Point Lepreau refurbishment is simply false, according to the Green Party.

Premier Graham was responding to Prime Minister Harper’s assertion that the Province entered with eyes wide open into a contract with Atomic Energy of Canada to tear down and rebuild the reactor core.

“I disagree with Stephen Harper on virtually everything else, but on this one he is right,” said Green Party president and candidate in the Charlotte-Campobello riding, Janice Harvey.  “Bernard Lord’s government was told in no uncertain terms by the Public Utilities Board that the uncertainties and risks involved in refurbishment were too high and they should not proceed.  Encouraged by Opposition Leader Shawn Graham, Premier Lord ignored this advice and went ahead anyway.”

In 2002, the Public Utilities Board was asked to review the proposed refurbishment project and alternatives to it.  During extensive hearings at which NB Power experts testified under oath and evidence was subpoenaed, a long list of technical and financial risks were identified.  These included the fact that this would be a first-time refurbishment of a CANDU-6 reactor which could lead to serious delays, the cost of replacement power, and the uncertainty about the reactor’s performance when it was brought on-line.

“The PUB’s concerns about the refurbishment have been a matter of public record for years, so Shawn Graham’s mock surprise is just a little precious,” said Harvey.

The evidence presented to the PUB also revealed that high capital and maintenance costs and deteriorating performance at Point Lepreau made electricity generated there the most expensive on the New Brunswick grid, at that time coming in at nearly 11 cents per kilowatt hour.  In addition, the Province was forced to swallow $450 million of Lepreau’s debt because the reactor wore out before it’s mortgage could be paid off.

“When exposed to the scrutiny of the expert energy regulatory board, Point Lepreau’s refurbishment failed all the risk tests,” said Harvey.

The PUB recommended against the refurbishment, stating the risks were too high and therefore the project was not in the public interest.  The PUB’s preferred alternative, should additional electricity be required to replace Point Lepreau, was a high efficiency combined-cycle natural gas generator which could be built reliably in the same proposed time frame (18 months) and for less cost to New Brunswick without the need to buy replacement power.  Such plants are virtually turn-key operations.

“Why the Conservatives and Liberals ignored the PUB and went ahead anyway can be chalked up to two factors -- politics and blind ideology,” Harvey said.  “First, there is an intense political lobby to keep the nuclear industry going in New Brunswick, despite its proven financial failure.  This comes from the nuclear and construction industry, the unions, and the business community in Saint John which profits mightily from high cost projects.  Second, for the political and business class, nuclear technology and megaprojects are status symbols.  They irrationally refuse to face the facts that clearly demonstrate that this is absolutely the wrong road to take – with disastrous consequences.”

According to Harvey, both Liberals and Conservatives demonstrated a gross failure of judgment and leadership from the very beginning of this project.  “They had full information and objective, credible recommendations from their own energy regulator against the refurbishment but they went ahead anyway.  In this decision alone, they have forfeited their parties’ claims that there are only two credible options for the governing party in this province.”

Harvey continued, “New Brunswickers are now stuck with a nuclear albatross that we don’t need and can’t afford.  Our children and grandchildren will be paying for this failure of judgment far into the future.  David Alward’s promise of a rate freeze is just electioneering.  Once the Lepreau bill comes in, no government is going to be able to protect New Brunswickers from higher power rates, unless the taxpayers take it on.”

“The sad thing is that it was completely avoidable.  This fiasco was ‘made in New Brunswick’ – full stop.  There will be a great deal of buck passing and re-writing history in the election campaign.  But the Green Party is committed to speaking the truth on this issue.  New Brunswickers must fully understand what happened and why.  We are offering ourselves as an alternative to re-electing either of the two parties that were complicit in this colossal breach of trust with the citizens of New Brunswick,” Harvey concluded.

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