A day after Global News released documents alleging Ontario Power Generation pursued a “deliberate management strategy” to get artificially low estimates at the massive $12.8 billion Darlington nuclear refurbishment, Ontario’s official opposition says it will ask the province’s Auditor General to investigate.
“It’s alarming to know that this cost is spinning out of control, or at least it was spinning out of control,” said Todd Smith, the PC energy critic and MPP for Prince Edward-Hastings. “That’s why we’re going to be contacting the Auditor General to look into some of the mistakes that were made, or at least the mismanagement by the early management team that was in charge of the refurbishment.”
Smith says if the allegations contained in the May 2014 audit report by Burns & McDonnell-Modus are true, OPG should bear the costs of these problems – not Ontario ratepayers.
“Every time one of these projects goes over budget by hundreds of millions dollars or billions of dollars it casts a big shadow over the nuclear industry,” Smith said. “Ultimately, if this project goes way over budget and it’s because of malfeasance at OPG, than it should be OPG that bears the cost of these overruns, not electricity customers in Ontario.”
WATCH: Key project at Darlington nuclear plant faces millions in cost overruns, delayed
The Global News investigation also uncovered significant cost and schedule overruns at one of the refurbishment’s key early projects – the Heavy Water Storage and Drum Handling Facility.
Initially budgeted at $110 million, OPG says the project could cost half a billion dollars when finally complete.
“The price tag has gone up since the original estimate, it’s [now] at $381 million,” said Jeff Lyash, CEO of Ontario Power Generation. “Given the scope we now realize, it will be somewhat more than that – likely in the order of 20 per cent to 30 per cent more.”
The May 2014 report did say OPG has taken “aggressive action to correct as many of the major issues as possible,” with the early projects, but provided no guarantee the heavy water facility could be delivered as planned.
Lyash, meanwhile, says the refurbishment as a whole is on time and within budget. He says some projects have been successful and gone very well, while others have experienced challenges.
“When OPG prepared the overall $12.8 billion [estimate] for Darlington Refurbishment in November 2015, all 500 projects, including the [heavy water storage] were assessed for project risks,” said Neal Kelly, a spokesperson for OPG.
WATCH: OPG insists Darlington refurbishment within budget, despite cost overruns at storage facility
Meanwhile, Andrea Horwath, Leader of Ontario’s NDP, says the government needs to keep a closer eye on the project.
“It’s pretty disturbing information that you uncovered,” Horwath said.
She says Ontario’s electricity system is already a mess and that Ontarians simply cannot afford to pay for more mistakes.
“The message that the government sends to these organizations should be one of transparency, accountability and clarity,” Horwath said. “The people of the province deserve to have the straight goods – they deserve to have the facts.”
Global News requested an interview with Ontario’s energy minister, Glenn Thibeault, to respond to the allegations contained within the May 2014 Burns & McDonnell-Modus audit report, but the request was declined.
Instead, Thibeault provided a written response.
“We have absolute confidence in OPG’s leadership team, and its ability to successfully complete the Darlington refurbishment project,” said Thibeault. “The current status of the project is on time, and on budget.”
In his response, Thibeault said OPG has a “carefully developed business plan to guide the complex refurbishment.” He said the company has a “solid project management track record” and cited three recent projects OPG has delivered under budget.
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The total cost savings of the three projects Thibeault mentioned was $24.3 million – equivalent to roughly nine per cent of current cost overruns on the heavy water storage facility.
“Senior management and staff at OPG are subject to the strictest possible oversight to ensure safety, reliable supply and value for ratepayers,” Thibeault said. “I also continue to have regular update meetings with OPG along with Ministry of Energy officials to ensure the ongoing success of the project.”
Thibeault says the Darlington refurbishment will contribute $90 billion to Ontario’s GDP, creating an average of 14,200 jobs annually.
While Smith agrees nuclear is vital to Ontario’s economy – saying the PCs support the refurbishment and are confident in current management at OPG – he says the type of behaviour described in the audits should make Ontarians outraged.
“I think what really upsets people is the fact that the old management team received bonuses as they were heading out the door, Smith said. “Clearly those bonuses weren’t warranted when you see an audit like the one that you published.”
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