Leonard wants Ottawa to kick in for Point Lepreau losses

Energy Minister Craig Leonard says he plans to restart talks with the federal government about compensation for overruns at the Point Lepreau Nuclear Generating Station once the refurbishment work is finished this fall.

The project is three years late and $1 billion beyond original estimates.

The provincial government has consistently said it wants compensation from the federal government for the reactor's delays.

Atomic Energy of Canada Ltd. (AECL) was a Crown corporation when the problems started at the refurbishment project, which was supposed to be finished in 2009 and cost $1.4 billion.

If the federal government doesn't want to make a direct payment to help cover the financial losses associated with the delays, Leonard suggested Ottawa could make an investment in future energy projects in New Brunswick.

"Whether it's direct compensation in the form of a cheque whether it's compensation in terms of projects that the federal government will fund for us, like [the] Mactaquac [hydro-electric dam] if we want to go down that road, other projects, if there are hydro facilities that we're interested in, wind, this type of thing," he said.

In the past, Leonard has said he wants full compensation for the reactor's delays. However, Prime Minister Stephen Harper has said repeatedly the federal government would only cover its contractual obligations.

The energy minister said Newfoundland and Labrador is an example of the federal government offering financial help to a provincial government so it can move forward with a major energy project.

"With the Muskrat Falls project, the federal government has committed to a loan-guarantee," Leonard said.

"That particular advantage that will give the government of Newfoundland and Nalcor is in the hundreds of millions of dollars."

AECL was sold last year to SNC-Lavalin. Even after the sale, Leonard said last year he still planned to pursue compensation from Ottawa for delays on the project.

Liberals want full compensation

Opposition energy critic Brian Kenny released a statement Tuesday expressing concern that the Alward government "seems to be backtracking on its commitment to fight for full financial compensation from Ottawa."

"The cost overruns are the direct result of actions by Atomic Energy Canada Limited, and by extension, the federal government," Kenny said. "The Alward government originally claimed it would settle for nothing less than full compensation from the feds, but now they seem to be softening their stance, and that’s a concern."

Kenny added, "Acting Minister Leonard suggested that the federal government could get out of paying these cost overruns by participating in future projects, like the Mactaquac dam restoration ... compensation for Lepreau should not be tied to a project starting 16 years from now."

Kenny said that if suing the federal government for compensation is needed, "so be it."

Regulatory hurdle cleared

The Point Lepreau refurbishment work should be done by September, if not sooner.

On Monday the Canadian Nuclear Safety Commission announced its decision authorizing New Brunswick Power Nuclear (NBPN) to begin activities to restart the Point Lepreau Generating Station.

"The CNSC is satisfied that NBPN has completed all safety tests required before removing measures that guaranteed the reactor’s safe shutdown state," said Ramzi Jammal, the commission’s chief regulatory operations officer.

"As the power gradually increases and before electricity is produced, additional safety checks and approvals will be necessary." 

This is an incremental but necessary step in refurbishing the facility, a process that has experienced numerous delays and setbacks.

The station will not immediately produce electricity. The reactor will be restarted for a series of safety tests under the oversight of the safety commission’s staff.

The next step for NB Power will then be obtaining regulatory approvals to increase above 0.1 per cent of full power and then above 35 per cent of full power. 

The CNSC renewed Point Lepreau’s licence for a five-year period in February 2012. Onsite commission staff conducted several inspections and reviews of the facility.

On Dec. 13, there was a radioactive spill at Point Lepreau, when up to six litres of heavy water splashed to the floor, forcing an evacuation of the reactor building and halt of operations.

Then, on Dec. 14, NB Power issued a news release, admitting there had been another type of spill three weeks earlier. About 23 barrels of water laced with the toxic chemical hydrazine was released into the Bay of Fundy.

At the time, the nuclear commission expressed discomfort with Point Lepreau.

"Since this plant is almost finished refurbishing, it's a bit unsettling to hear about hydrazine and heavy water leak one after the other," safety commission president Michael Binder said on Dec. 15.