Ontario suspends nuclear procurement



    QUEEN'S PARK, June 29 /CNW/ -

    NEWS

    The Government of Ontario today announced that it has suspended the
competitive RFP to procure two replacement nuclear reactors planned for the
Darlington site.
    Deputy Premier and Minister of Energy and Infrastructure George
Smitherman indicated that the government remains committed to the
modernization of Ontario's nuclear fleet.
    "Emission-free nuclear power remains a crucial aspect of Ontario's supply
mix" Smitherman said, "unfortunately, the competitive bidding process has not
provided Ontario with a suitable option at this time" he added.
    Proposal submissions were received from AREVA NP, Atomic Energy of Canada
Limited and Westinghouse Electric Company on February 27, 2009 and carefully
evaluated. Only the submission from AECL was compliant with the terms of the
RFP and the objectives of the Government. However, concern about pricing and
uncertainty regarding the company's future prevented Ontario from continuing
with the procurement at this time.
    In March 2008, Ontario undertook a two phase competitive procurement
process to select a nuclear vendor to build a two unit nuclear power plant at
Darlington. The units are to replace older units as part of a strategy to
renew Ontario's nuclear fleet. Nuclear power accounts for about 50 percent of
Ontario's electricity needs and provides a reliable, stable and clean supply
of base load electricity.

    LEARN MORE

    Go to http://www.infrastructureontario.ca to learn more about the Nuclear
Procurement Project RFP.

    
    -------------------------------------------------------------------------
                                                      ontario.ca/energy-news
                                                      Disponible en français


    BACKGROUNDER
    -------------------------------------------------------------------------

                     NUCLEAR PROCUREMENT PROJECT UPDATE
    

    Phase 2 of the Request for Proposals (RFP) Process

    Phase 2 of the RFP focused the competition on the cost of power, on-time
delivery and investment in Ontario. The competitive process was designed to
help ensure the greatest amount of cost certainty, lowest possible price and a
fair approach to risk sharing.

    Working with Respondents on Pricing and Risk Sharing

    During Phase 2 a number of bilateral commercially confidential meetings
were held with each respondent to discuss the uncertainties and challenges in
pricing and the commercially balanced way to deal with such issues as the
deterioration of global credit markets, fluctuation in commodity prices,
inflation, construction quantities and similar commercial uncertainties
involved in a 10-year multi-billion dollar project.

    Proposals Received

    Infrastructure Ontario received proposal submissions from AREVA NP,
Atomic Energy of Canada Limited and Westinghouse Electric Company for the
Nuclear Procurement Project RFP.

    Evaluating the Respondents

    To achieve the best possible deal for Ontarians, respondents to the
Nuclear Procurement Project RFP were evaluated in three key areas:

    
    -   Lifetime cost of power
    -   Ability to meet Ontario's timetable to bring new electricity supply
        on line
    -   Level of investment in Ontario

    Evaluation Results

    Following an evaluation of the proposal submissions, it was determined
that AECL had the best proposal.
    -   AECL is willing to accept the terms and conditions of the project
        agreement
    -   AECL has the most risk transfer -- but at an unacceptable price
    

    Knowledge Gained

    The competitive process has provided significant market intelligence on
pricing and risk tolerance at an early stage in a ten-year multi-billion
dollar project.
    Crucial knowledge about structuring a fair deal will help the Ontario
government move forward when it is prudent to proceed to next steps.

    
    Timelines

    Phase 1

    -   On March 7, 2008, the Ontario Government announced a two-phase
        competitive procurement process to choose a preferred nuclear reactor
        vendor

    -   In April 2008, a series of Commercially Confidential Meetings were
        held with potential vendors

    -   On May 9, 2008, Infrastructure Ontario announced that three vendors
        had submitted Phase 1 Proposal Submissions as required by the RFP

    -   On June 5, 2008, Infrastructure Ontario announced that all three
        vendors that had submitted Phase 1 Proposal Submissions received
        'satisfactory' ratings and would be invited to proceed to Phase 2 of
        the RFP

    Phase 2

    -   On June 16, 2008, Infrastructure Ontario released Phase 2 of the
        Nuclear Procurement Project RFP

    -   From July to December 2008, a series of bilateral confidential
        meetings took place on aspects of design readiness and commercial
        aspects of the project

    -   On February 27, 2009, Infrastructure Ontario announced that all three
        respondents submitted Phase 2 Proposal submissions

    -   On May 28, 2009, the Government of Canada announced that it was
        proceeding with a restructuring of AECL

    -   On June 29, 2009, the Minister of Energy and Infrastructure announced
        that the Nuclear Procurement Project RFP was being suspended because
        of concern about pricing and uncertainty regarding AECL's future

    -------------------------------------------------------------------------
                                                      Disponible en français
    





For further information:

For further information: Amy Tang, MEI Minister's Office, (416)
327-6747

Organization Profile

Ontario Ministry of Energy and Infrastructure

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890