Ottawa should pay Point Lepreau overruns: P.E.I. premier
Last Updated: Wednesday, October 21, 2009 | 9:00 PM AT
CBC News
P.E.I. has joined New Brunswick in calling on the federal government to cover extra costs electricity consumers are facing due to further delays in bringing the Point Lepreau nuclear plant back online.
The 16-month delay in refurbishing Point Lepreau is expected to cost island consumers an additional $44 million, said Energy Minister Richard Brown.
That's because Maritime Electric will have to continue to buy more expensive replacement energy from N.B. Power, which means extra costs of more than $2 million a month.
Premier Robert Ghiz contends Ottawa should compensate island consumers for the financial impact of the delays since it's the Crown nuclear corporation Atomic Energy of Canada Ltd. (AECL) doing the work.
"The consumers of electricity shouldn't have to pay for the additional costs of electricity ... so we'll be looking to them to offset any additional costs."
Ghiz said he'll go directly to the Prime Minister and lobby for financial compensation.
Maritime Electric's Kim Griffin said it's been a challenge to find replacement energy and is hopeful Ottawa will step in and cover some of the additional costs.
"We'd be very supportive of anything the minister can do in terms of intervening and helping out customers reducing their costs, but when the project is completed we will have to recover those costs and pay those bills so that would be a burden for the customers of P.E.I."
Once Maritime Electric knows the full cost of purchasing that more expensive power, the company will go to IRAC with a plan to raise electrical rates, said Griffin.
The work at Point Lepreau is now 16 months behind schedule. NB Power has estimated that replacement fuel for each day the nuclear reactor is not running costs it $1 million.
A leading researcher at the University of Moncton, Yves Gagnon predicts the cost overruns in overhauling the Point Lepreau nuclear plant will top $1.6 billion.
Last week, NB Power announced it may raise rates by 1.8 per cent or 2.5 per cent for 30 years to pay for the cost overruns.
But New Brunswick Engery Minister Jack Keir has said the province will be arguing to Ottawa that AECL's admission of sole responsibility for the delays will absolve provincial taxpayers of any financial liability.
The refurbishment was orginally estimated to cost $1.4 billion, and was supposed to be completed by the end of September. But AECL has said it will be early 2011 before the reactor is back online.
Located about 50 kilometres southwest of Saint John, Point Lepreau is Atlantic Canada's only nuclear reactor. The refurbishment will add 25 years to the Candu-6 reactor's working life.
This is the first refurbishment of a Candu-6 ever attempted by AECL and was intended to be used as a model for the federal Crown corporation to show off to other countries that own similar reactor models.
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