Premier Shawn Graham said he's encouraged after his trip to Ottawa on Tuesday to ask the federal government to cover the estimated $475 million in cost overruns at New Brunswick's Point Lepreau nuclear generating station.

Graham met with Prime Minister Stephen Harper and Minister of Natural Resources Christian Paradis about the ongoing refurbishment project, which is months behind schedule.

'They're looking to find a solution, and for us, that was an encouraging opening.'—Premier Shawn Graham

"Minister Paradis was very clear, he's sympathetic with the discussions that have been held today [Tuesday]," Graham said.

"He understands the significant challenges that the ratepayers of New Brunswick are facing, with the unacceptable delays that are in place.

"They're looking to find a solution, and for us, that was an encouraging opening."

On Monday, NB Power officials announced power rates will likely rise an extra three per cent next year because of cost overruns refurbishing the plant.

That's on top of the three per cent increase already called for in a new rate plan NB Power submitted to the provincial government earlier this month.

Ottawa wants more information

The $1.4 billion-refurbishment, being handled by the federal Crown corporation the Atomic Energy of Canada Ltd. (AECL), began in the spring of 2008, with the reactor originally scheduled to be back up and running by October 2009.

Officials now say it's unlikely Lepreau will return to service before February 2011.

It's costing New Brunswick close to an extra $1 million per day for replacement power and other costs while the reactor remains offline.

Graham has argued AECL is using the Lepreau project to learn on the job for the benefit of future refurbishments elsewhere and it's not fair that New Brunswickers should have to pay for that.

He has even threatened to sue the federal government if it refuses to pay the cost overruns.

Ottawa, meanwhile, has said it will respect the terms of the AECL contract with New Brunswick, which does not cover the cost overruns.

But based on Tuesday's meeting, Ottawa appears to be softening its stance, said Graham.

Paradis "never once talked about honouring the contract that's in place," he said.

Graham said the federal government has requested more information about the project, such as the replacement power being used while the reactor is out of service, operational and management costs, before making any decisions about cost overruns.

He expects to send the information within a week.

The Point Lepreau project is the world's first refurbishment of a Candu-6 plant. AECL had hoped the process would be a model that could be sold to other countries that purchased a Candu-6.