Bruce Power got millions to not produce electricity

The people of Ontario paid Bruce Power nearly $60 million in 2009 to not generate electricity for the province, CTV Toronto has learned.

A deal between the nuclear generator, a private company, and the Ontario Power Authority (OPA) sets out a guarantee for a certain amount of power to be purchased — even if it’s not needed.

The technical term is called surplus baseload generation. The agency agreed to pay Bruce $48.33 for each megawatt hour of electricity that was not needed.

In 2009, demand for electricity was down in Ontario, largely as a result of the recession. This meant Bruce’s nuclear reactors weren’t operating at full capacity.

As a result, the OPA paid Bruce power $57.5 million for about 1.2 terawatt hours of electricity that was not produced. A terawatt is a million megawatts.

Ben Chin, a vice-president of the OPA, said the arrangement is like having a fire station. They aren’t needed all the time, but one must still pay to keep it open.

The OPA also said this deal keeps taxpayers off the hook for any cost over-runs. Bruce is spending billions of dollars to refurbish its nuclear reactors and may be about $3 billion over-budget.

The OPA said taxpayers actually got a bargain through the arrangement with Bruce. A Bruce Power spokesperson said the company is fulfilling its side of the deal.

With a report from CTV Toronto’s Paul Bliss

6 thoughts on “Bruce Power got millions to not produce electricity

  1. How can we get into this Scam?…………can I get paid for doing nothing?…………….nice gig!

  2. This is not an unusual provision in “service” contracts. I had to deal with many a customer who felt it was free to have people and equipment on “standby” in case they/it was/were needed. Only bill them if we sent someone or did something… riggghhttt! In the meantime I paid extra guys in case they were needed.

    It is often called a “pay or take” arrangement.

    I say this is a nothing story unless CTV wants to prove that they have no such arrangements — they are called “Service Contracts” in other parlance. I will bet that they have signed several. I will bet that they also pay for back-up generation and that it is hardly ever used.

    This is part of the problem with forecasting and scheduling.

  3. Exactly right David.

    The CAMECO 2009 annual report has a footnote, “24.6 TWh plus deemed generation of 1.2 TWh”
    … and notes:
    BPLP has an agreement with the OPA that extends to 2019. Under the agreement, output from the B reactors is supported by a floor price (currently $48.76/MWh) that is adjusted annually for inflation. …
    The agreement also provides for payment if the Independent Electricity System Operator reduces BPLP’s generation because Ontario baseload generation is higher than required. The amount of the reduction is considered ‘deemed generation’, and BPLP is paid either the spot price or the floor price – whichever is higher. “

  4. Absolutely!

    To mitigate this problem, the Liberals introduced
    “smart meters” and Time of Use Billing. Now, had
    they stopped there, this may have had a positve effect. Then they OD’ed on their “stupid” pills and started increasing baseload generation in the form of wind turbines. Guess what? They have “contracts” to! Far, far more lucrative then anything Bruce Power will ever get!

    I didn’t see that mentioned in the report…

    Surprise, surprise!

    Sean Holt.

  5. While Bruce obviously protects themselves contractually from periods of surplus baseload generation, OPG doesn’t have any indication in their 2009 reporting of any benefits to reduced production. On page 15 of their annual report at they note reduction in production due to SBG.

    So we have 1.8 TWh between the two of foregone, emissions-free, supply.
    And we had 2.3 TWh of wind we purchased – the vast majority of which was simply exported.

  6. It’s so much crap. Last year I noticed a Bruce reactor off line and the Goreway gas plant was running. I called the IESO and told them you’ve taken a nuclear unit off line to run a gas plant. The rep said, “I wouldn’t put it that way.”

    It’s time for heads to roll. McGuinty has got to go.

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