Bruce questioned on finances

27 September 2002

British Energy holds 80% ownership in Bruce Power, while uranium supplier Cameco owns 15%, and labour unions representing most of Bruce Power staff own the balance.

Under a condition of its operating licence, Bruce Power must report quarterly to CNSC on the status of Bruce Power's letters of financial guarantee. The licence requires the company to "supply funds to allow Bruce Power to operate its nuclear facilities for up to six months with no source of commercial income from nuclear operations in the event of a nuclear emergency at Bruce Power's nuclear generating stations." Bruce Power submitted one such quarterly report in mid-August 2002. However, on 29 August, CNSC asked Bruce Power for additional information. Bruce Power replied on 6 September. It submitted a further letter to the regulator on 10 September, following discussion with CNSC staff.

Bruce Power CEO Duncan Hawthorne said: "Bruce Power has confirmed that the guarantees are in full force and effect. However, it is acknowledged that the recent announcement of financial support for British Energy from the UK government is silent with respect to contingent liabilities although confidence can be drawn from the fact that the UK government has agreed to provide financial support to Bruce Power's trading operations." He continued: "Bruce Power does however recognise that CNSC staff need further assurances that appropriate arrangements are in place or alternatives are being actively pursued. To that end, we have indicated that in addition to pursuing clarification from the UK government and BE plc, we are developing alternative Canadian-based solutions." Hawthorne named the Canadian options as obtaining insurance coverage for a shutdown event, achieving Bruce Power's own credit rating, developing further banking facilities, revising the Bruce Power partnership structure, and revising Bruce Power's profit distribution policy.

Canada's nuclear regulator licensed Bruce Power in May 2001 to operate eight reactors at the Bruce Nuclear Power Development (BNPD). The original licensee was then state-owned Ontario Hydro, whose successor Ontario Power Generation leased BNPD to Bruce Power.




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