Wednesday, June 27, 2012

Bruce Power price cut could help consumers - or could not occur

The Toronto Star's John Spears reports on the hit Bruce Power is about to take.

Bruce Power price cut could help consumers -
"The statement TransCanada issued with its first quarter results reads:
“In accordance with the terms of the Bruce Power Refurbishment Implementation Agreement (BPRIA), Bruce A receives Contingent Support Payments (CSP) from the OPA equal to the difference between the fixed
prices under the BPRIA and spot market prices through July 1, 2012 after which all of the output from Bruce A will be subject to spot market prices until both Units 1 and 2 have achieved commercial operations.”"
The entire article can be read at

Bruce Power issued a  statement responding to the Star story indicating actions it has taken to avoid the rate cut:

In the contract, there are provisions referred to as force majeure that ensure Bruce Power is not adversely impacted by an external event beyond our control such as the Unit 2 event reported previously.Following the event, we submitted a force majeure claim to the OPA providing them all the necessary information to make a determination. Based on extensive review of our claim, we believe OPA will support our position. If they accept our position, the price from the other operating units would not be impacted.
It's a little difficult to see how the referenced event is not be the responsibility of Bruce Power:

They issued a statement on May 18th covering the delay on unit 2, specifying a contractor, and noting the timeframe of return for unit 1, which was beyond the July1st date regardless.
Siemens Canada and Bruce Power will work together to repair this non-nuclear system on Unit 2, while the overall operational focus will now be on the completion of the Unit 1 return to service program that continues to advance. Unit 1 is still on track to return to service in the third quarter.
I am sympathetic with Bruce.  It does seem a little silly that the transmission lines required for all 8 Bruce units, plus the other generation capacity added in the area lately, came online, ahead of a revised schedule, only on June 19th (reference here) .   We did have a big heat wave on June 22-24, following which non-utility generators appeared to be curtailed during a cooler weekend, and later on Monday Darlington 4 went offline - it is currently scheduled to come back online as hot weather returns tomorrow - a suspicious 3 day offline period..  
There is little indication Ontario needs the reactors at Bruce in service now - and less reason to think Ontario will need them in September.

However, force majeure seems unlikely to apply to the unit 2 delay.
Bruce appears to have a $50 million a month problem.

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