Canadian Manufacturing

OPG applies for whopping rate increase to pay for Ontario’s Darlington Nuclear rebuild

Power generator is looking to increase the price it's paid for nuclear power by 69 per cent, if approved, move would add $5.25 to bills after five years



Aerial view of the Darlington Nuclear generation station. PHOTO: Ontario Power Generation

The Darlington Nuclear generation station is poised for a costly rebuild to repair and retrofit aging infrastructure. PHOTO: Ontario Power Generation

TORONTO—Ontario Power Generation has applied for a whopping 69 per cent increase in the amount it is paid for nuclear power over the next five years.

OPG says it needs the increase to help pay for the $12.8-billion refurbishment of the Darlington nuclear station, which the government announced in January to extend the life of the reactors by another 30 years.

The government-owned utility is also asking for a small increase—less than the rate of inflation—in the rate it’s paid for hydro-electric power.

OPG spokesman Neal Kelly says if the entire request is approved, it would increase a typical household electricity bill an average of $1.05 a month annually in each of the next five years, to $5.25 a month in 2022.

The Ontario Energy Board will hold a public hearing into OPG’s rate increase application, but Kelley says he doesn’t expect a decision until mid-2017.

The Ontario Clean Air Alliance says OPG’s application shows it wants nine cents a kilowatt hour for the power produced from Darlington, which is more expensive than the 8.6 cents a kwh it pays for wind power.

“Our electricity rates are already too high, and we shouldn’t increase them even further when we can actually lower our bills by choosing a cleaner and safer option,” said Alliance chair Jack Gibbons.

“Why are we putting our children at risk of a nuclear accident when there are lower-cost options?”

Gibbons said Ontario should also consider signing long-term contracts to import more clean, renewable electricity from Quebec to offset the nuclear generation.

Ontario generates about 50 per cent of its electricity from nuclear power, and Premier Kathleen Wynne has said she wants to keep it that way. Wind power adds less than five per cent to the energy supply mix.

Energy Minister Bob Chiarelli said OPG did extensive public consultations explaining it needs the rate increase to make the electricity system more reliable.

“More will come down the road in terms of the progression of the (nuclear) reburbishments, so that was expected,” he said.

In addition to the Darlington refurbishment, which is supposed to extend its life until 2050, OPG is also undertaking work to squeeze about four more years of life out of reactors at the Pickering nuclear generating station.

And Bruce Power is spending $13 billion to refurbish six reactors at the nuclear generating station it operates under contract to the government near Kincardine.

OPG is the only electricity generator that has to apply to the OEB for rate increases. All the other suppliers have long-term contracts with the province.

Ontario became the first jurisdiction in North America to stop burning coal to generate electricity when it shut down the last plant in 2014.

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