Ontario government in supply deal with Bruce Power nuclear operator

TORONTO, Dec 3 (Reuters) - The Canadian province of Ontario
extended its commitment to nuclear energy on Thursday,
announcing a supply deal with Bruce Power under which the
private nuclear generator will spend C$13 billion ($9.7 billion)
to refurbish six reactors.
The Liberal government of Canada's most populous province
said under the agreement, it will secure 6,300 megawatts of
emissions-free capacity from Bruce Power, which is majority
owned by TransCanada Corp TRP.TO and the Ontario Municipal
Employees Retirement System Fund (OMERS).
The Bruce nuclear power station is one of the world's
largest. Located on the shores of Lake Huron more than 200
kilometers (124 miles) northwest of Toronto, it provides
one-third of all the power in Ontario.
Bruce Power said the refurbishment of each unit would add
30-35 years to its operating life. Bruce Power will invest its
own funds in the overhaul and take on the full risk of cost
overruns.
The project's start date was pushed back to 2020 from 2016,
which the government said will maximize the value of existing
units.
Under terms of the deal, Bruce Power will receive C$65.73
per megawatt hour (MWh) from the start of 2016, a slight
increase from its current price but much less than the C$83/MWh
average price of electricity in the province.
The average price over the life of the contract is estimated
at C$77/MWh, or 7.7 cents per kilowatt hour (kWh).
In connection with the new agreement, TransCanada will raise
its stake in Bruce Power to 48.5 percent, paying C$236 million
to OMERS for the additional equity.
After the transaction, the pension fund will still own 48.5
percent, with the remainder held by the Power Workers' Union,
the Society of Energy Professionals and a Bruce Power employee
trust.