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April 10, 2007

Bruce Power deal was good for Ontario: Auditor General report

TORONTO

Energy Minister Dwight Duncan released a report by Ontario’s Auditor General on the Bruce Refurbishment Agreement announced in October 2005.

“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.

The Auditor’s report assessed whether the decision-makers had what was needed to ensure the agreement was a good value for Ontario taxpayers. The report found the province considered and addressed risks and issues, and had all of the information and expertise needed to negotiate an extremely complex agreement.

Dwight Duncan

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 agreed-upon 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 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.

Over the next 15 years Ontario will need to refurbish, rebuild or replace 25,000 megawatts of supply.

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