New Brunswick Energy Minister Jack Keir is warning the province's second nuclear reactor project may take a back seat in the next few months as NB Power and Atomic Energy of Canada Ltd. fight to bring the Point Lepreau refurbishment project back on schedule.

NB Power announced this week that the $1.4-billion overhaul project is slipping three to four months behind schedule.

Since negotiations for building a second nuclear reactor alongside Point Lepreau began, Keir has maintained that NB Power's priority must be delivering the refurbishment on budget and hit its September 2009 completion date.

Now Keir said any NB Power staff who are working on both projects must remember that each day the maintenance project is delayed costs the province $1 million.

'But they will take a back seat. Those folks involved in the refurbishment project, I want them to remain focused on that project.'— Energy Minister Jack Keir on plans for second nuclear reactor

"The projects are different, the two do not relate," Keir said.

"But some of the staff at NB Power are involved in both [projects] because NB Power only has so many nuclear people to go around. As long as NB Power convinces everybody that they can do both ... there is no impact."

But David Hay, chief executive of NB Power, told the standing committee on Crown corporations Wednesday that ideally the utility would not have to be planning for a potential second reactor while working on the complex refurbishment project.

Atomic Energy of Canada is part of a private consortium called Team Candu New Brunswick that is interested in building the world's first Advanced Candu Reactor-1000 next to the Point Lepreau station.

Team Candu New Brunswick would construct the 1,100-megawatt nuclear reactor and have it operated by NB Power.

It's the first nuclear project designed to run as a merchant reactor, meaning Team Candu will be free to sell the power to the highest bidder. The province has the option of how much it wants to invest in the project.

Keir said the consortium is speaking with private investors to make sure the business case works and is also negotiating with NB Power on how it would operate the reactor.

CNSC application next for 2nd reactor

The next step that must be taken for the second reactor is a site licence application to the Canadian Nuclear Safety Commission. That process was supposed to begin last summer but has yet to be started by the provincial government and NB Power.

The application would trigger several years' worth of studies by NB Power and CNSC.

But with the refurbishment project falling behind schedule, which could leave NB Power picking up $70 million to $90 million in extra costs, Keir is clear that some of the remaining issues for the second reactor will be sidelined if it distracts the utility's staff.

"I don't know if they get put off indefinitely, but they will take a back seat," Keir said, referring to steps needed for the second reactor.

"Those folks involved in the refurbishment project, I want them to remain focused on that project."

If Team Candu New Brunswick intends moves ahead, the private consortium would have the opportunity to sell the reactor's electricity to the highest bidder, particularly the energy-hungry New England and New York markets.