QUEEN'S PARK, April 5 /CNW/ - Energy Minister Dwight Duncan today
released a report by Ontario's Auditor General on the Bruce Refurbishment
Agreement announced in October 2005.
"At our request, the Auditor General reviewed the agreement. In 2005, we
announced that we had successfully transferred much of the operating and cost
overrun risks from the ratepayer to Bruce Power. The Auditor's review confirms
this conclusion," Duncan said. "We appreciate the Auditor General's comments
and thank him and his team for their hard work."
The Auditor's report assessed whether the decision-makers had what was
needed to ensure that the agreement was a good value for Ontario taxpayers.
The report found that the province had considered and addressed risks and
issues and had all of the information and expertise needed to negotiate an
extremely complex agreement. It noted that external financial advisors found
Bruce Power's rate of return on its investment was within an acceptable range.
It also reviewed some of the choices made in the negotiations to arrive at the
"This was a good deal when we signed it, and it's a good deal today,"
Duncan said. "We will get a clean supply of affordable electricity for the
next 30 years, and transfer appropriate risk to the private sector. In return,
Bruce Power will get a fair price."
Over the past 18 months, the price paid to Bruce Power has been 6.1 cents
per kilowatt hour. This is lower than the agreed-upon price of 6.3 cents per
kilowatt hour as a result of lower fuel costs.
The agreement was signed in order to secure a long-term supply of
baseload power for Ontario homes, businesses and hospitals. Between 1995 and
2003, Ontario's net supply of power had fallen by more than 1,800 megawatts -
the equivalent of Niagara Falls running dry.
As part of the agreement, Bruce Power is investing $4.25 billion to
restart Bruce A Units 1 and 2, refurbish Unit 3 and replace the steam
generators in Unit 4. The addition of 1,500 megawatts of clean, baseload
supply to the Ontario electricity grid is enough power for 1.2 million Ontario
The terms of the agreement were subject to detailed due diligence by
financial, legal and technical advisors, and approved by the Ontario Cabinet.
In October 2005, CIBC World Markets provided the Ministry with an opinion that
the principal financial terms of the transaction were fair.
Over the next 15 years Ontario will need to refurbish, rebuild or replace
25,000 megawatts of supply. In addition to this agreement, the McGuinty
government is also maximizing the potential for cleaner energy through
hydroelectric and renewable power and conservation. Contracts are now in place
for 1,300 megawatts of green power to come online over the next several years.
The Ministry of Energy has also authorized the Ontario Power Authority to
invest upwards of $2 billion in conservation as part of the province's
commitment to foster a culture of conservation in Ontario.
Copies of the Auditor General's report are available on line at:
Copies of CIBC World Market's Fairness Review are also available on line
Disponible en français.
For further information:
For further information: Steve Erwin, Minister's Office, (416) 327-3546;
Sylvia Kovesfalvi, Communications Branch, (416) 327-4334