The Bruce Power Refurbishment Agreement

After the Refurbishment Agreement was signed, Our work was largely completed by July 2006, the Minister of Energy announced she would be except for the review of certain information requesting, under the provision of section 17 of the received in late 2006 and early 2007 relating to set- Auditor General Act, that the Office of the Auditor tlements between Bruce A LP and the OPA. [...] Management Board of Cabinet approved the plan Bruce Power and the Ministry agreed to an to acquire the necessary professional services in “open-book” process, and the Ministry was given accordance with the principles and requirements of access to a data room containing confidential the government’s procurement directives regarding documents provided by Bruce to support the refur- consultants and g [...] As part of the negotiation, the Ministry agreed to Therefore, given that the average electricity provide a guaranteed minimum support price of price since the opening of the electricity market $45/MWh plus an annual adjustment for CPI for in 2002 has been about $51/MWh and that 2006 the energy output of the Bruce B plant (with no fuel prices averaged in the $45–$55/MWh range, the cost pass-through [...] However, increases to the support price indicates a rate of $63/MWh as the initial cost of negotiated in these other agreements have gener- electricity, the trade-offs negotiated in the agree- ally limited the annual inflationary increase in the ment will provide additional cash flows to Bruce A support price to 15%–20% of CPI. [...] In analyzing the capital-cost for contingencies), a cost of $2.75 billion was used risk of the project, the consultant considered the both to calculate the support price and as a base for effects of factors that typically apply to large com- sharing any cost overruns or savings in the Refur- plex projects and the possibility of major disruptive bishment Agreement.