Energy Probe

MR.RUBIN: Madam Chair, my comments deal with issues concerning nuclear power, and we offer them to urge this Board to do two things: To stipulate and construe the nuclear issues as broadly as possible; and, in particular, to seek mechanisms to ensure that Ontario ratepayers and taxpayers are protected from the peculiar risks presented by nuclear power.

In our submission, most people and many documents, including even some of the IPSP documents, are either confused or misleading on the definition of base load power, and we believe this has important ramifications for your decisions.

Specifically,there is a notion abroad that base load means 24/7 and, therefore, that base load stations are and must be unusually reliable stations.If anything, the contrary is closer to the truth.

Nuclear generators, indeed, produce base load power.They are subject to both planned and unplanned or forced outages, whichoccasionally last for years, and they are both technically and financially resistant to being dispatched for the grid's convenience.

As a result, their output, like base load power in general, is clearly much less valuable to the electricity grid and its customers than power from more reliable and more dispatchable sources, including, for example, coal, natural gas and peaking hydroelectricity.

A grid can in fact easily operate reliably with 100 percent flexible, reliable and dispatchable capacity, the kind of capacity we might call peaking capacity. But it is unlikely to survive for long with 100 percent inflexible, less reliable and non-dispatchable capacity, the capacity we generally call base load capacity.

By the same token, a grid can accommodate a fair share of unreliable or intermittent base load capacity, provided that it has enough reliable and dispatchable capacity to fill in when the wind won't blow or the sun won't shine, or the uranium won't fission or won't fission safely.

In fact, the only rational reason to build even a single base load station, a less reliable non-dispatchable generating station, is to save money, to lower the total cost of the system, by which we mean financial and non-financial costs.

OPG and Bruce Power are currently receiving more per kilowatt-hour for their base load nuclear power than OPG receives for its more reliable dispatchable and clearly more valuable coal-fired power.

This is true even after a very significant portion of the costs of building those nuclear plants has been excluded from electricity rates and is handled by a separate fee on our bills.

Clearly, the past decisions to build Ontario's existing nuclear plants, decisions that were all made without the benefit of a single reference to the Ontario Energy Board, did not lower the total financial costs of our electricity system, despite promises from all official participants to the contrary.

These decisions raised costs, and continue to raise costs, as only a very few independent parties predicted at the time, including of course Energy Probe.

Incidentally we expect that the management of nuclear waste will continue to produce further cost overruns for a very long time in the future.

Two main factors account for almost all of the excess costs of today's nuclear power.A great deal came in the form of cost overruns in the difference between low estimated or promised capital costs and the much higher actual as-delivered costs, and much of the rest came and continues to come in disappointing performance.

Reactor and reactor component reliability and durability, the cost of maintenance and refurbishment, these have all been very significantly worse than their forecast or promised values. Predictions that have now been revealed as wildly optimistic were clearly responsible for convincing Ontario Hydro and the government to commit to a supposedly cost-lowering, supposedly inflation-proof investment, that actually raised costs by many billions of dollars, and continues to do so.

Even our most recent experiences with the refurbishment of a number of nuclear plants that were fully constructed and paid for many years ago have led to another series of broken promises and further cost increases for ratepayers.

In another hearing before this Ontario Energy Board, OPG is currently applying for another substantial increase to its compensation for nuclear generation and for a 25 percent off-loading of the financial risk of further broken nuclear promises.

They say they are just responding to their real world nuclear costs and to the risks posed by their nuclear capacity.

In addition to the multi-billion dollar rate impacts of all of these broken promises, they have also presented very serious challenges to the reliability of Ontario's grid, challenges which have been bearable, in part, because of some lucky weather timing, and, in the main, because of Ontario's large surplus of coal-fired generating capacity, an insurance policy that we are told will definitely not be available during the operating lifetime of the next round of new or refurbished nuclear plants.

And I note, as a sidebar, that Ontario's unfortunate decision to let most of Ontario's coal-fired stations continue to operate using outmoded and highly polluting technology can also, in our submission, be attributed to false promises of high nuclear reliability.

In these proceedings, OPA is before this Board promising the sort of nuclear plants that Ontario has frequently seen on the drawing board but has never once seen in real life, low cost, high reliability, long lifetime, easy-to-maintain nuclear plants, plants which we are now assured will actually lower the cost of power compared to all of the available alternatives.This time we are assured will be different.

Given this consistently painful and embarrassing pattern of false nuclear promises swallowed whole, given the remarkable similarity of today's nuclear promises to those from decades past that have now proven so baseless, and given the fact that the Ontario Energy Board now has its first chance, ever, to apply this Board's independent, transparent, multi-stakeholder, and technically deep process to this enormously important matter, this proceeding, in our submission, must provide assurances, ironclad assurances, that if the Ontario grid is to be committed to the construction of new or refurbished nuclear capacity, then the real world, as-delivered cost of that nuclear power to Ontario ratepayers must actually lower the total costs of the system, and the financial and grid-security risks of it failing to do so, whether from biased forecasting, misleading bait-and-switch claims, predictable surprises, technological obsolescence, broken promises, abbreviated lifetimes or disappointing reliability, or whatever, those risks must be borne in their entirety by private investors, and not by Ontario ratepayers or taxpayers.

We are long past the point, in our submission, where the enormous risks of broken nuclear promises can be considered theoretical or even unlikely.

As another sidebar, Madam Chair, because Ontario provides close to a third of Canada's federal tax revenue, any guarantees from Atomic Energy of Canada Limited which simply shift risks to Canadian taxpayers do not, in our submission, provide an adequate or just solution to this problem.

The failure of this Board to deal with these issues in depth and to deliver those essential assurances or to compel OPA to do so, in our submission, would risk dwarfing and subverting the potentially enormous positive impact of all the remaining decisions made in this proceeding.

We believe it is vital that this Board and this process have the ability to ensure that essential outcome, and we urge you to include that consideration in your decisions about issues.Thank you.