TransCanada Corporation said Thursday that it was committed to expenditures of at least $13 billion ($9.73 billion US) for assert management (AM) and major component replacements (MCR) at the eight-reactor Bruce Power facility in Ontario that would extend the lives of units 3 through 8 at the world's largest nuclear power plant.
The company has struck a deal with the Ontario Independent Electricity System Operator that includes product pricing that TranCanada said would ensure a growing base of returns as well as enable Bruce Power to contribute zero-emissions power to the grid for years to come. It also involved TransCanada acquiring additional shares of Bruce Power, exercising its rights to a $236 million ($176.5 million US) purchase that raises its holdings to 48.5 percent, matching the percentage owned by the Ontario Municipal Employees Retirement System (OMERS). The rest of Bruce Power is held by the Power Workers' Union, the Society of Energy Professionals and a Bruce Power Employee Trust.
The deal, which takes effect on the first of the new year, allows for an immediate investment in life-extension activities for Units 3 through 8, including long-term refurbishment. The bulk of the work, however, will be on hold until 2020. Reportedly, the delay is based on making best use of existing equipment and timing the refurbishment to maximize investment. Units 1 and 2 at the plant, which sits on the shores of Lake Huron in Tiverton, Ontario, have already undergone extensive upgrades.
The deal, which has been under negotiations for at least a year, includes uniform pricing for all Bruce Power units at $65.73 MWhr. Over time, this price will be subject to adjustments based on capital costs which are currently figured at 2014 levels. In return, it also involves a sustained investment of $110 million per year over the life of the facility, TransCanada said.
TransCanada said its share of the investment for major component replacement for Units 3 through 8 over the 2020 to 2033 time frame is approximately $4 billion ($2.99 billion US) figured at 2014 values.
Refurbishment, said OMERS, allows for an increase of the lifespan of the reactors 30 to 35 years. “We are very pleased with this significant opportunity to deploy additional capital incrementally through the refurbishment projects,” said OMERS Chief Investment Officer Michael Rolland. “We continue to seek high-quality infrastructure assets that generate steady cash flow to help pay pensions and our investment in Bruce Power fits this strategy very well.”
The power plant produces close to a third of Ontario's electricity supply. The province's energy minister Bob Chiarelli said the deal sets prices at $77 per megawatt hour, which is less than the current average price of $83, which translates to $57.58 and $62.07 in US dollars. “We're getting a hell of a bargain here in terms of price moving forward,” Chiarelli said.