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CANADIAN COMMISSIONNUCLEAR CANADIENNESAFETY DE SÛRETÉCOMMISSION NUCLÉAIRE

Public Hearing L'audience publique

BEFORE/DEVANT:

Ms L.J. Keen President/Présidente

Dr. A.J. Carty Member/MembreDr. C.R. Barnes Member/MembreDr. Y.M. Giroux Member/MembreMr. A.R. Graham Member/MembreMs L.J. MacLachlan Member/Membre

ALSO IN ATTENDANCE/AUSSI PRÉSENTS:

Ms A. Nowack Commission Counsel/Avocate de la Commission

Mr. G.C. Jack Secretary/SecrétaireMr. B. Gerestein Hearing Manager/

Gérant de l'audience

HELD AT: TENUE A:

The Davidson Centre Centre DavidsonDurham Street Rue DurhamKincardine, Ontario Kincardine (Ontario)

April 19, 2001 le 19 avril 2001

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TABLE OF CONTENTS/TABLE DES MATIÈRES

ITEM PAGE

Opening Remarks 1

01-H11/01-H11.AAdoption of Agenda 3

HEARING DAY 2 4

3.1 Bruce Power Inc.: Bruce A and Bruce B Nuclear Generating Staions Operating Licenses 5

01-H6.1AOral presentation by Bruce Power Inc. 8

01-H6.AOral Presentation by CNSC Staff 19

01-H6.2Oral Presentation by Ontario Power Generation 25

01-H6.37Written Submission from CNSC Staff; 01-H6.36 Ontario Power Generation: Progress and status reports for Bruce Nuclear Generating Station 31

01-H6.3Oral Presentation by the Municipalityof Kincardine 108

01-H6.4Oral Presentation by the Power Workers' Union 125

01-H6.5Oral Presentation by the South Bruce Impact Advisory Committee 137

01-H6.6Oral Presentation by Citizens for Renewable Energy 146

01-H6.8Oral Presentation by Town of Saugeen Shores 164

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TABLE OF CONTENTS/TABLE DES MATIÈRES

ITEM PAGE

01-H6.7Oral Presentation by Great Lakes United 170

01-H6.9Oral Presentation by Canadian Nuclear Workers Council and Grey-Bruce Labour Council 188

01-H6.10Oral Presentation by the Society of Energy Professionals 195

01-H6.11Oral Presentation by Integrated Energy Development Corp. 206

01-H6.12Oral Presentation by the Bruce Community Development Corporation 221

01-H6.13Oral Presentation by the Sierra Club of Canada 235

01-H6.14Written submission from County of Bruce 251

01-H6.15Written submission from Municipality of Kincardine; Office of the Regional Nuclear Emergency Planning Coordinator 252

01-H6.16Written submission from Business Improvement Area 252

01-H6.17Written submission from Bruce Hydro Retirees Association 252

01-H6.18Written submission from The Corporation of the Municipality of Arran-Elderslie 253

01-H6.19Written submission from The Corporation of the Township of Huron-Kinloss 253

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TABLE OF CONTENTS/TABLE DES MATIÈRES

ITEM PAGE

01-H6.20Written submission from Kincardine and District Chamber of Commerce 253

01-H6.21Written submission from Mr. John Bennett 253

01-H6.22Written submission from Kincardine Township, Tiverton Public School Home and School Association 254

01-H6.23Written submission from Municipal Electric Association 254

01-H6.24Written submission from Citizens Action Coalition of Indiana 254

01-H6.25Written submission from One Sky-Canadian Institute of Sustainable Living 255

01-H6.26Written submission from the Association of Major Power Consumers of Ontario 255

01-H6.27Written submission from Don't Waste Michigan 256

01-H6.28Written submission from Don't Waste Michigan, Grand Rapids 256

01-H6.29Written submission from Lone Tree Council 256

01-H6.30Written submission from Stakeholders' Alliance for Electricity Competition & Customer Choice 256

01-H6.31Written submission from Ontario Legislative Assembly 257

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TABLE OF CONTENTS/TABLE DES MATIÈRES

ITEM PAGE

01-H6.32Written submission from Municipality of Northern Bruce Peninsula 257

01-H6.33Written submission from Canadian Nuclear Association 257

01-H6.34Written submission from Citizens for Alternatives to Chemical Contamination of Michigan 260

01-H6.35Written submission from Mr. John Kirby 268

Closing remarks 284

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April 19, 20011

--- Upon commencing on Thursday, April 19, 20012

at 9:30 a.m.3

4

Opening Remarks5

MR. JACK: Good morning, ladies6

and gentlemen.7

Bonjour, tout le monde.8

A couple of logistical details9

from me first before I hand over to the Chair. My10

name by the way is George Jack, I'm Secretary of11

the Commission. As usual, transcripts will be12

prepared of this public hearing. They will be13

available early next week. There is also14

simultaneous translation capability to facilitate15

discussion in both official languages.16

Si quelqu'un a besoin d'un17

appareil, les appareils sont disponibles pour tout18

le monde pour qu'on puisse utiliser n'importe19

quelle langue officielle.20

I would ask as a matter of21

courtesy to others in the room that cell phones be22

silenced for the duration of the Public Hearing.23

With that, I will turn this over24

to the Chair of today's Public Hearing, the Chair25

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of the Canadian Nuclear Safety Commission, Ms1

Keen.2

THE CHAIRPERSON: Thank you very3

much, Mr. Jack. My name is Linda Keen and I'm the4

President and CEO of the Canadian Nuclear Safety5

Commission.6

Well, it's a great pleasure for7

the Commission to be here in Kincardine, and8

before we start this morning I would like to thank9

the people of Kincardine for welcoming the10

Commission and the Hearings to here today, and for11

the people from the Davidson Centre for making the12

arrangements for us to have the Hearing here13

today.14

It's extremely important for the15

Commission to have the opportunity to be here and16

to provide intervenors, either through oral17

submissions or written submissions, the18

opportunity to hear the Commission's views, to19

input to the Commission's decision and, therefore,20

to provide the most transparent process possible21

which is the aim of this Commission.22

So I would like to thank you all23

in advance for your cooperation and help, and I'm24

very pleased to see so many people with us today.25

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First of all, I would like to1

introduce the Commission Members that are with us2

today. We have the full Commission with us. I'm3

just going to start on my left with Dr. Barnes,4

next is Mr. Graham, next is Ms MacLachan, Dr.5

Giroux, and to my right is Dr. Carty, and all6

Commission Members are here.7

In addition, the Hearing this8

morning was opened by the Secretary of the9

Commission, Mr. George Jack, who is a member of10

the Commission Secretariat, and our legal counsel,11

Ms Nowack, is with us as well on my right.12

13

01-H11/01-H11.A14

Adoption of Agenda15

THE CHAIRPERSON: I would like to16

start by the adoption of the agenda. The agenda17

is outlined in CMD Documents 01-H11 and 01-H11.A. 18

The following CMD Documents were added to the19

agenda after publication on March 22nd, 2001, they20

are the following:21

CMD O1.H11.A, Agenda Update, on22

April 17th this was faxed to the participants and23

all intervenors; Document H6.A, Supplementary24

Information from the Commission Staff; Document25

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6.1A, Supplementary Information from Bruce Power1

Inc.; Document H6.36, Ontario Power Generation2

Progress and Status Reports for Bruce Nuclear3

Station B; Document H6.37, a Written Submission4

from CNSC Staff Follow-up Report on Large5

Loss-of-Coolant Accidents noted in Significant6

Development Report CMD 01-M24.7

Just a note. We have sought, as8

much as possible, to involve all the intervenors9

at their time of request in terms of the oral10

presentations. If there are any issues, from the11

point of view of those intervenors which will be12

giving oral presentations, I would ask you to13

contact the Secretariat staff which are located at14

my right during a break. Therefore, I will start15

by the adoption of the agenda.16

Are there any comments or17

questions from the Commission?18

Can we have the adoption of the19

agenda?20

MEMBER CARTY: Moved.21

THE CHAIRPERSON: Moved. Adoption22

of Agenda. Thank you very much.23

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HEARING DAY 225

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THE CHAIRPERSON: Therefore, we'll1

go to item number 3 of the agenda, Hearing Day2

Two. Hearing Day One was held on February 8th,3

2001.4

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3.1 Bruce Power Inc.: Bruce A and Bruce B Nuclear6

Generating Staions Operating Licenses7

THE CHAIRPERSON: The Hearing is8

Bruce Power Inc., Bruce A and Bruce B Nuclear9

Generating Stations Operating Licences. These are10

as outlined in CMD Documents 01-H6, 01-H6.1. 11

March 20th was the deadline for filing for12

intervenors, and all listed on the updated agenda13

met this deadline.14

Members that were present on15

February 8th, 2001, which was Hearing Day One,16

included the following members of the Commission:17

The President, Mr. Graham, Dr.18

Giroux and Ms MacLachan. The following19

Commissioners were absent for Day One, which is20

Dr. Carty and Dr. Barnes. Dr. Barnes and Dr.21

Carty will be participating in the question period22

today but they will not be participating in the23

decision at that time.24

I would like to just outline for25

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those of you in the room the procedure that I1

intend to take today. I'm going to start out by2

grouping the following presentations. The3

following presentations will be grouped because it4

is the view of the Commission that they present an5

overview of the operations of Bruce A and B and6

the Hearing would be best served by hearing these7

presentations together.8

So we will start out by the9

following grouping of presentations. We will hear10

6.1A from Bruce Power Inc.; we will also hear 6.A11

from the CNSC staff; we will also hear 6.2 from12

Ontario Power Generation. These are all oral13

presentations. We will then consider the14

following written submissions: H36 and H37. This15

is in order that the Commission has an opportunity16

to look at these documents together, which we17

think will be in the best interest of the Hearing.18

I will ask for all these oral19

presentations and for consideration of those two20

written presentations all together before we will21

open for questions from the Commissioners, so that22

we will provide that general overview. So that23

will be the first part of the agenda.24

The second part of the agenda will25

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be the oral submissions from intervenors, and1

those will be presentations and then questioning2

individually by the Commissioners. So each oral3

presentation will be given by intervenors and then4

there will be questions by the Members of the5

Commission.6

Then we will move on to written7

submissions and, again, we will consider them and8

there will be an opportunity for the Commission9

Members to ask questions or have comments. So10

that will be the order that we will have during11

the day.12

I will have breaks and we will13

have a break for lunch and, if necessary, we will14

have a break for dinner and come back after15

dinner. Our purpose will be to continue with the16

submissions today in full from that point of view.17

So I just want to ensure that18

everyone understands that, and if there are any19

concerns from the applicant or from anyone else20

that they give us that sense right now.21

Okay. Well, thank you very much.22

Therefore, based on that agenda,23

I'm going to start now with the requests for24

presentations. On that basis, I will start with25

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the oral presentation by Bruce Power Inc. which is1

outlined in CMD Document 01-H6.1A and I believe2

that the Chairman and Chief Executive Officer,3

Robin Jeffrey, will speak.4

5

01-H6.1A6

Oral presentation by Bruce Power Inc.7

MR. JEFFREY: Madam Chairman,8

Commission Members, Commission staff, good9

morning. My name is Robin Jeffrey. I'm currently10

the Chairman and CEO of Bruce Power Inc. and also11

the Deputy Chairman of British Energy plc, the12

majority shareholder of Bruce Power Inc.13

I'm joined today by the same team14

who accompanied me to the Day One Hearing in15

Ottawa on February the 8th: Duncan Hawthorne on16

my right who is currently the Executive VP, Chief17

Engineer of Bruce Power, David Gilchrist on my18

left who is the Executive VP Finance, and Robert19

Nixon on the extreme right who is currently20

Ontario Power Generation Site VP for the Bruce21

Nuclear site and who is a member of the Bruce22

Power Executive Team.23

Bruce Power is here today to24

provide an update to the Commission on progress in25

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a number of areas since our Day One Hearing, and1

specifically to provide additional information in2

the three areas that you, Madam President,3

identified as of particular importance to our4

application, namely: Community consultation,5

safety culture and regulatory commitments. We6

will be most pleased to answer any questions which7

you may have.8

First of all, I would like to9

update the Commission on some changes to the10

organization of Bruce Power. As I will become11

Chairman of British Energy plc in July of this12

year, the roles of Chairman and Chief Executive13

Officer of Bruce Power will shortly be separated14

with Duncan Hawthorne assuming the role of Chief15

Executive Officer.16

Duncan has more than 25 years in17

the power engineering business and has held senior18

positions in British Energy's U.K. and North19

American operations. He's been in his current20

position with Bruce Power since April, 2000 and21

has played a lead role in the due diligence22

negotiations and transfer of operations.23

Next, Ken Talbot will be joining24

Bruce Power replacing Duncan Hawthorne as25

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Executive VP, Chief Engineer. For the past three1

years, whilst Head of Operational Safety for2

nuclear installations at the International Atomic3

Energy Agency (IAEA) Ken has led twenty successful4

improvement missions to nuclear power plants in5

twelve countries.6

Prior to joining the IAEA, Ken7

Talbot's career spanned 25 years with Ontario8

Hydro, notably as Director of the Bruce A nuclear9

power plants between 1991 and 1996. Mr. Talbot10

will be a member of the Bruce Power Board of11

Directors.12

And finally, Frank Saunders will13

join Bruce Power as VP Safety and Environment on14

May the 1st. For the past six years, Frank has15

been Director of Nuclear Operations and Facilities16

at the McMaster Nuclear Research establishment in17

Hamilton. Prior to 1995 he acquired broad18

experience in nuclear plant operations during a19

period of 15 years with Ontario Hydro.20

On the next slide, at the Day One21

Hearing I said that two independent directors were22

in the process of being appointed. I'm pleased to23

advise the Commission that both of these24

directors, Robert Milborne and Jay Spencer25

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Lanthier, have now been appointed and have1

attended board meetings. Both are Canadian2

citizens and bring extensive experience to the3

team.4

Bob Milborne has enjoyed a5

distinguished business career with Stelco Inc. and6

its related divisions. He will chair the Bruce7

Power Board Safety Supervisory Committee and bring8

strong credentials to this role. He is a former9

Commissioner of the Ontario Human Rights10

Commission and a founding Director and Treasurer11

of the Occupational Health Clinics for Ontario12

Workers Inc., an initiative sponsored by the13

Ontario Federation of Labour.14

Spencer Lanthier recently retired15

as Chairman and Chief Executive Officer of KPMG16

Canada capping a successful 40-year career with17

the Canadian arm of the global accounting and18

consulting firm. He is a Member of the Order of19

Canada and is a director on several boards,20

including the Bank of Canada and the Toronto Stock21

Exchange. Spencer will Chair the Bruce Power22

Board Audit Committee and also the Pension23

Committee. The Bruce Power Board is now up to its24

full commitment of nine members.25

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On the next slide, Bruce Power1

believes in a policy of openness whilst observing2

the constraints of running a business that3

operates in a competitive market and whose owners4

are listed on the Stock Exchange. We believe that5

in order to promote support for nuclear power6

amongst the general public we must build7

understanding and trust.8

Since announcing the lease9

transaction last July, Bruce Power has undertaken10

a number of initiatives to keep the public, our11

staff and the local community informed about our12

company and our progress. This slide outlines13

some of the methods we have used to establish a14

dialogue with the local communities around the15

Bruce site and with members of the public.16

At Bruce Power we believe that17

creating a community-oriented company is vital to18

our overall success. We are committed to being a19

good corporate citizen, supporting activities and20

causes that promote safety, health and the21

environment and, in particular, promote the22

well-being of children and families in our23

community. We are committed to continuing this24

pro-active approach to communications in the25

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future.1

On the next slide, a defining step2

for Bruce Power was the decision to locate our3

corporate office on the Bruce site. All the4

members of our senior management team have or plan5

to have their home in the communities around the6

Bruce site.7

We believe in face-to-face8

communications. We have instigated a regular9

newsletter called "OpenLine" posted on our web10

site for access by employees and the public. We11

participate in regular meetings with community12

officials and local community-based stakeholder13

groups.14

On the next slide, in order to15

ensure that our stakeholders and the local16

community were aware of the public consultation17

process in respect of Bruce Power's licence18

application, we initiated a communication plan to19

raise awareness of the licensing process. We20

posted our submission on our web site together21

with information on how to participate in the22

Hearing process. We placed all of this into the23

local libraries along with copies of our lease24

agreement and master agreement with OPG.25

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We sent letters to stakeholders1

outlining the CNSC Public Hearing process and2

describing how to access our submission. We3

offered to answer any questions they had on the4

submission.5

We sent postcards to over 17,0006

homes in the local community describing the CNSC7

process and providing contact details for8

submitting an intervention.9

Now, I would like to pass over to10

Duncan for the remainder of this presentation.11

MR. HAWTHORNE: Thank you, Robin.12

Madam President, Members of the13

Commission, good morning. At the Day One Hearing14

we were invited to comment on Bruce Power's15

methodology and approach to the creation of a16

strong safety culture. We believe that there are17

three components that support a strong safety18

culture, these being leadership, employee19

engagement and communication.20

Leadership has to be based on a21

key set of values that are delivered through the22

behaviours that all staff can see. These values23

provide the pervading principles that support all24

decision-making within the organization. However,25

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the leadership can be effective only if it is1

highly visible. We will ensure that our2

management team are available at the workplace to3

provide guidance and support and to hear4

employees' feedback. The setting of clear5

management expectations for performance is best6

achieved through coaching behaviours in the field,7

and this will be a characteristic of the Bruce8

Power Management Team.9

We have created an organizational10

structure that places clear accountability on the11

executive team members, and in the case of safety12

performance we have an independent board level13

oversight process.14

Fundamental to all initiatives to15

change culture, there must be a process that16

encourages employee involvement and engagement. 17

We are committed to using the International Safety18

Rating System to create an environment for this19

involvement. The team working nature of the ISRS20

system will ensure that staff at all levels become21

involved in the delivery of improved performance.22

The Memorandums of Understanding23

we have created with the Unions are designed to24

create a partnership approach. This will deliver25

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our changed programs. The business improvement1

process is coordinated through a joint union2

management team working approach.3

Thirdly communication. The Bruce4

site has some 3,000 employees and the delivery of5

timely, accurate and relevant information to all6

staff represents a significant challenge. Our7

communication behaviours will seek to create as8

much face-to-face dialogue as possible. We will9

develop a site intranet as a vehicle to give all10

staff access to relevant information and to11

solicit their feedback. The use of safety team12

talks as an element of the ISRS system provides a13

very structured period of time set aside to14

concentrate on purely safety matters.15

These three elements - visible16

leadership, employee engagement and effective17

communication - will, we believe, deliver real,18

measurable and sustainable improvements in all19

areas of safety performance.20

Turning now to Bruce Power's21

position relative to outstanding regulatory22

commitments for the Bruce Nuclear facilities. As23

part of our licence application, we confirmed that24

we would honour existing commitments and would25

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continue to use the existing commitment management1

system. This represents a considerable investment2

of both capital and resources over the next four3

years with around $140 million (Canadian) of4

safety based improvements.5

We will be delivering programs of6

work that are designed to make improvements to the7

operational performance of these facilities as8

viewed by the regulator and our owners. We see9

the safety improvement program as entirely10

consistent with our commercial improvement11

programs.12

As part of OPGI's performance13

reporting commitment to CNSC, a status report has14

been recently delivered. Bruce Power has15

conducted its own review of this document and we16

have informed CNSC staff that we accept this as a17

true record of the status of the occupational18

programs for baseline performance monitoring of19

our future performance.20

Finally, we have examined the21

staffing levels across the site and reviewed the22

arrangements for allowing some 300 staff to retire23

from OPG in advance of Bruce Power assuming24

operational control. We have satisfied ourselves25

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that appropriate arrangements are in place to1

deliver a serious hand over of responsibilities2

across the site and that the safe operation of the3

site can continue to be guaranteed.4

Additionally, good progress has5

been made in recruiting new staff to the site. 6

You'll see from this slide that we have been7

successful in recruiting staff at all levels in8

the organization, and the very encouraging news9

that the applications far exceed the number of10

vacant posts. We are working closely with11

colleges and universities to establish a longer12

term relationship to manage our recruitment needs.13

In preparation for financial14

close, we have completed all of the transitional15

activities required to put ourselves in a state of16

operational readiness. This has been confirmed17

through independent audit. The transition team is18

now working to complete any outstanding19

non-operational and financial arrangements to20

bring the transaction to financial close.21

In conclusion, Madam President,22

Members of the Commission, we have made good23

progress since our last presentation to the24

Commission. We have a full executive team25

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structure in place and the existing Bruce Site1

staff have all been made aware of the changes that2

occur as part of this transition process. We have3

demonstrated operational readiness and are in a4

position to accept our licence at the discretion5

of this Commission.6

Bruce Power has worked closely7

with CNSC staff and OPG staff to ensure that all8

arrangements are in place to satisfy licensing9

requirements. We are committed to a culture of10

safety first and to being a member of the Bruce11

community.12

Thank you for your attention.13

THE CHAIRPERSON: Thank you very14

much. As I noted earlier, and with the approval15

of the Members of the Commission, I will now move16

to document 01-H6.A which is the oral presentation17

by CNSC staff, and Mr. Blyth.18

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01-H6.A20

Oral Presentation by CNSC Staff21

MR. BLYTH: Thank you very much,22

Madam Chair.23

My name is Jim Blyth. I'm the24

Acting Director General of the Directorate of25

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Reactor Regulation. I'm accompanied today by Mr.1

Jim Douglas on my far left who is the head of our2

site office, our Bruce Site office.3

On my immediate left is Mr. Mike4

Taylor, the Department Director of the Directorate5

of Reactor Regulation, and on my right is Mr.6

Peter Elder, the acting Head of our Power Reactor7

Evaluation Division, and Mr. Elder will be making8

the presentation on behalf of the CNSC staff.9

MR. ELDER: Good morning, Madam10

President and Members of the Commission.11

As Jim mentioned, my name is Peter12

Elder. I'm the Acting Director of the Power13

Reactor Evaluation Division. CMD 01-H6.A provides14

supplementary information on Bruce Power's15

application for licences for Bruce A and Bruce B16

Nuclear Generating Stations. The complete17

staff-reviewed application is contained in CMD18

01-H6.19

CNSC staff would also like to20

update the Commission on other recent developments21

relevant to the Bruce stations. This presentation22

will cover the following topics: Revision to23

Bruce Power's letter of financial assurance as24

discussed in CMD 01-H6.A, recent developments on25

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the large loss-of-coolant analysis and with feeder1

pipes and their impacts on the Bruce facilities;2

and finally, CNSC staff's ongoing monitoring of3

Ontario Power Generation's integrated improvement4

plan initiatives at Bruce.5

To address the CNSC staff concerns6

on the operational financial capability, Bruce7

Power had supplied the CNSC with copies of letters8

of credit from British Energy and Cameco. These9

letters would give Bruce Power access funds to10

cover six months of operation and maintenance11

costs for both Bruce A and Bruce B stations. The12

intent of the letters was to provide assurance13

that Bruce Power could cover a prolonged shutdown14

of Bruce B during which it would have no source of15

revenue. These assurances are additional to any16

financial guarantees for decommissioning.17

The letters have recently been18

modified by British Energy and Cameco to clarify19

that funds are available to the licensee, Bruce20

Power Inc., when it deems necessary. Copies of21

the revised letters are attached to CMD 01-H6.A. 22

License condition 11.3 and the proposed Bruce B23

licence has been modified to reference the revised24

letters. The changes to the letters do not affect25

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the amount or nature of the assurance.1

CNSC staff has also confirmed that2

the letters were approved by the Board of3

Directors of both Cameco and British Energy.4

As discussed in the Significant5

Development Report at the March Commission6

meeting, Ontario Power Generation reported in7

February that the consequence of a critical large8

loss-of-coolant accident could be worse than9

previously predicted at all stages. This finding10

arose during a comparison study of reactor physics11

codes. The latest status of this topic is12

provided in CMD 01-H6.37.13

For Bruce B, Ontario Power14

Generation has updated the analysis with more15

restrictive operating limits. This analysis16

supports continued operation of the station. 17

Ontario Power Generation has committed to18

conducting follow-up work to confirm the results19

of the analysis and to improve safety margins in20

the longer term.21

Bruce Power has confirmed it will22

honour Ontario Power Generation's commitments on23

this issue if they are issued a licence. The24

findings have no impact on Bruce A in the current25

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defueled shutdown state. The large1

loss-of-coolant analysis would need to be2

reassessed if any Bruce A units are restarted.3

The second recent development4

concerns feeder pipes. In March of this year New5

Brunswick Power discovered a leak in the feeder6

pipe at the Point Lepreau Generating Station. 7

Subsequent inspections by New Brunswick Power8

identified two additional cracks in the elbows of9

the outlet feeders.10

In response to these findings at11

Point Lepreau, Ontario Power Generation is12

developing an enhanced feeder inspection program13

to look for similar cracks at their stations. 14

Bruce Power is aware of this information and15

recognizes its potential implications on Bruce.16

Ontario Power Generation has had17

an ongoing integrated improvement plan that covers18

all its sites. As stated in CMD 01-H6, Bruce19

Power has committed to continue with improvements20

in every area addressed by the plan. CNSC staff21

would like to update the Commission on how we will22

track the commitments by Bruce Power.23

Ontario Power Generation has24

recently transferred control of the projects under25

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the plan to the individual sites. CNSC staff has1

been monitoring this transition and has requested2

site-specific plans to ensure that we can track3

progress at each site. We have requested similar4

information from Bruce Power and will continue5

this approach of monitoring each site if Bruce6

Power is issued a license.7

Also, CNSC staff continue to8

provide the Commission with the six-months update9

on the progress of the IIP initiative. These10

updates will include progress by Bruce Power, if11

Bruce Power becomes a licensee. I note that the12

next update is due in May of this year.13

The information presented today14

does not change CNSC staff's overall conclusion15

that Bruce Power is qualified to operate Bruce B16

and maintain Bruce A in the current shutdown17

state. Our recommendation remains that the18

Commission issue licences to Bruce Power with an19

expiry date of October 31st, 2003.20

The proposed licence for Bruce A21

contains a condition that units cannot be22

restarted without CNSC approval. If Bruce Power23

wishes to proceed with the restart of some Bruce A24

units, a separate licensing process similar to25

25

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that currently ongoing for Pickering A would be1

required.2

Thank you. This concludes our3

presentation.4

THE CHAIRPERSON: Thank you very5

much. Again, with the approval of the Commission6

Members, I will move now to the oral presentation7

by Ontario Power Generation as outlined in CMD8

Document 01-H6.2 and Mr. Drinkwater.9

10

01-H6.211

Oral Presentation by Ontario Power Generation12

MR. DRINKWATER: Thank you, Madam13

Chair, and good morning Commissioners.14

First let me introduce the15

representatives from OPG that are here this16

morning. My name is David Drinkwater and I'm an17

Executive Vice-President of OPG and responsible18

for the Bruce transaction.19

On my right is Pierre Charlebois20

who is a Senior Vice-President and our Chief21

Nuclear Engineer. Behind me, Gene Preston, an22

Executive Vice-President and Chief Nuclear Officer23

of OPG; Pat McNeil, a Vice-President of Corporate24

Development and the Senior Officer who has led the25

26

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transition process with Bruce Power for OPG; and1

Cedric Jobe, our Vice-President of Regulatory2

Affairs; and, as previously introduced, on my3

left, Robert Nixon who is currently OPG's Site4

Vice-President at the Bruce.5

OPG is intervening today in6

support of the Bruce Power application. The7

outline indicates the areas covered in our written8

submission. At the first Hearing I spoke in9

response to the issue of financial guarantees as10

they relate to decommissioning. An item which we11

have confirmed in our written response is a matter12

which will continue to be the responsibility of13

OPG and its shareholder.14

Today I would like to focus my15

remarks on two other issues: Ongoing support and16

services between OPG and Bruce Power, and the17

issue of the transition process, and then make a18

couple of concluding remarks.19

Listed on the next slide are20

examples of some of the areas where we are21

providing support to Bruce Power on an ongoing22

basis. Let me back up and just go over the23

process we went through to reach the Master24

Agreement.25

27

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One of the key elements that was1

undertaken in the period leading up to July of2

last year was an extensive due diligence process3

by Bruce Power and an extensive process of4

determining, both on their part and our part, what5

areas of support and services would be appropriate6

going forward. And accordingly, the Master7

Agreement which we entered into last July has8

appended to it documentation called "Term Sheets"9

which set out in some detail both of the areas10

where we will provide support and the key11

principles that underlay them.12

In the months subsequent to the13

July announcement, considerable additional work14

has been undertaken between Bruce Power and15

ourselves to satisfy ourselves that, in fact, the16

principles and areas as we outlined them in some17

detail at that time can be delivered between the18

parties. And, in that regard, I would just note19

the important fact that this represents a20

continuation of support which is provided today by21

OPG to the site.22

We are now in a position to sign23

formal agreements between the parties which will24

make these agreements operational going forward.25

28

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We also believe that the way we1

have structured these agreements will provide2

additional benefits in the sense that this will3

provide for an important sharing of technical4

information between Bruce Power and OPG on an5

ongoing basis and facilitate the ability of coming6

up with the best solutions possible and the best7

support possible for the industry going forward.8

In addition, we believe that these9

services can be provided in a competitive10

environment. First of all, OPG has in the past11

provided services similar to these to other12

nuclear operators in Canada, albeit not in a13

competitive environment, but providing such14

services in a competitive environment is a common15

practice in the U.S. experience. To give you16

perhaps the best example would be Duke, a major17

nuclear operator in the United States, also one of18

the leading providers of engineering services to19

other nuclear operators in the United States20

including operators in areas where there is or21

soon will be a competitive marketplace that Duke22

also competes in through its marketing and trading23

arms.24

In addition, there are now two25

29

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alliances being formed of other smaller nuclear1

operators in the United States where they are2

getting together and sharing information and3

sharing outage responsibilities across their4

nuclear fleets. There's one called the Utility5

Service Alliance which involves utilities in6

Michigan, Ohio and Illinois area including, for7

example, Detroit Edison and CMS where they will be8

sharing information about operating and9

maintaining their facilities, albeit in areas10

where there is now or soon will be a competitive11

marketplace. So we believe that the provision of12

these services can and should be provided in a13

competitive environment.14

Turning to the issue of the15

transition process, we in Bruce Power undertook a16

very significant transition process that started17

immediately after July. Notwithstanding the fact,18

as has been previously noted, that the significant19

majority of the employees will transfer across to20

Bruce Power, we felt it was important to ensure21

that we went through a rigorous transition22

process. That process has now been effectively23

completed and we are satisfied that Bruce Power is24

in a position to take over and safely and25

30

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effectively operate these facilities.1

I would also note two particular2

instances or elements of this particular3

transition that we think were particularly helpful4

in making it successful. The first is the comment5

that was made earlier by Bruce Power, that their6

decision to come to the site immediately after the7

agreement was announced was, we believe, of great8

assistance in terms of the transition. In terms9

of first-hand knowledge and experience in getting10

up the curve, it's been very helpful.11

The second is, this is the fourth12

transaction that British Energy Group have done13

transitioning over a nuclear facility in North14

America, the other three in the United States, and15

while there are differences between the types of16

facilities, many of the issues that you have to17

deal with in the transition context were similar,18

and we found that very helpful in the process.19

In conclusion, we reaffirm our20

support for this transaction. We believe that21

appropriate and effective service and support22

arrangements are in place between OPG and Bruce23

Power. We believe that the transaction process24

has been successful and Bruce Power is ready to25

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take over the successful and safe operation of1

these facilities.2

And finally, we believe that the3

introduction, while new to Canada, of an4

experienced and well-qualified nuclear operator5

will be of benefit not just to the Bruce community6

but also to the Province of Ontario and, in fact,7

to the nuclear industry in Canada in general and8

we very much look forward to working with them as9

we go forward.10

Those are our comments this11

morning. We would be happy to take questions at12

the appropriate point.13

THE CHAIRPERSON: Thank you. As14

noted earlier, and with the approval of the15

Commission Members, I would withhold questions16

just until I note the two written submissions that17

I would like the Commission to consider before we18

open the floor. I will repeat those written19

submissions.20

21

01-H6.37 Written Submission from CNSC Staff;22

01-H6.36 Ontario Power Generation: Progress and23

status reports for Bruce Nuclear Generating24

Station25

32

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THE CHAIRPERSON: I would draw the1

Commission's attention to the following two2

written submissions that will be subject to3

questions, the first being CMD Document O1-H6.36,4

Ontario Power Generation Progress and Status5

Reports for Bruce Nuclear Generating Station B;6

also CMD Document 01-H6.37, the written submission7

from CNSC Commission Staff, Follow-up Report on8

Large Loss-of-Coolant Accidents noted in9

Significant Development Report CMD 01-AM24 which10

was also referred to in the oral presentation by11

the Commission staff.12

On that basis, noting the three13

oral presentations and two written submissions, I14

now open the floor to questions from the15

Commission Members.16

Dr. Giroux.17

MEMBER GIROUX: I would like to18

start with questions for Bruce Power. The first19

one is a general question about your intentions as20

regards staffing.21

You have indicated numbers of22

present OPG staff that are going to stay with you23

and some are going to leave, but my question is24

more general. You have indicated in your25

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presentation, this time on Day One, that you were1

hoping to obtain improved productivity, improved2

efficiency in producing nuclear power.3

The question is: Are you planning4

to maintain the same number of staff for this same5

output, or what are your intentions as concerns6

that aspect of staff for output?7

MR. JEFFREY: I'll start with a8

general response and Duncan will follow up with9

some more details.10

The issues that we are faced with11

are, first of all, the safe operation of running12

the Bruce B plant, the improvement in terms of a13

number of the planning and organization14

approaches, the need to face the challenge of the15

demographics on the site of about half of the16

numbers of staff being eligible for retirement17

over the next few years, the importance of18

recruiting young, qualified staff into the site,19

and the potential challenge of restarting Bruce A20

which will, of course, be the subject of a21

separate application to the Commission at the22

appropriate time. So those are the broad issues23

that we outlined on Day One.24

I will pass over to Duncan on how25

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we are tackling these specific issues.1

MR. HAWTHORNE: Perhaps if I could2

inform the Commission of the overall staffing3

plans that existed prior to Bruce Power arriving. 4

Ontario Power Generation had conducted an5

assessment of the manpower requirements for the6

facility. It lead them to a position of forming a7

view that the staff was probably about four to 5008

over complement against their current needs. Had9

Bruce Power not come along, then arrangements10

would have been put in place to transfer those11

staff from the Bruce facilities to other OPG12

plants.13

As a result of this transaction,14

those transfers were halted, and so the staff15

complement remained the same for that entire16

period and has consistently been so.17

The rationale behind that from18

Bruce Power's point of view was that we wanted to19

have an available staff complement to make sure we20

could make the changes in a sufficient time period21

without being at risk, if you like, in terms of a22

shortfall of skills.23

So what we sought to do in the24

short term is to identify through a very, very25

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rigorous capability review of the staff for the1

next five years. We've looked at the overall2

demographics, we've looked at the critical skills3

areas, and certainly we've had a look at the4

training requirements in order to recruit staff5

and bring them up to speed.6

Where we've seen that to be a7

problem area such as control technicians or8

nuclear operators, immediate recruitment has been9

in place for that, and in the broad picture10

looking at overall staffing needs, we started with11

a position where more staff were on site than12

would have been the case had OPG continued to be13

the licensee. We supported that because of our14

forward-going projections in terms of staff needs.15

We did a critical review to16

identify key skills that we may be short of and,17

with help and support from OPG, were able to18

recruit those staff back into the organization.19

Thirdly, we have certainly made it20

clear that we believe there is room for21

productivity improvement on the site and22

performance improvement. We have strategies to do23

such things, but we see us doing that in a stable24

manpower environment for the early period.25

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As I said at the Day One Hearing,1

there is no magic wand to improve productivity. 2

We have processes. As part of due diligence, we3

did identify opportunities for improved4

productivity, these being in the area of work5

management, et cetera.6

As we struck our negotiations with7

the union, we identified two or three areas that8

we did want to deal with that we believed would9

deliver very short-term productivity improvements,10

things like the introduction of mixed working11

groups, fix-it-now teams which are a fast response12

to manage maintenance backlogs. These are13

initiatives that are primarily to deliver quick14

wins in terms of the productivity and effectively15

delivering people to the work site.16

So, taking all those things17

together, we believe we've got a sufficient18

complement to address the immediate needs of the19

station. We have programs in place that we will20

see the result of before we decide, you know, any21

other staffing relocation throughout the site22

facilities.23

MEMBER GIROUX: Thank you. A24

second question, if I may, again for British25

37

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Power, a completely different line.1

I read in your presentation that2

you met or tried to meet with what you call3

"potential negative intervenors." I would like to4

hear about what were the results -- what was your5

offer and what were the results?6

MR. JEFFREY: One of the values of7

British Energy plc and of Bruce Power Inc. is open8

and honest communications, and we believe it is9

extremely important to make information available10

on the web site, to offer to meet and to have11

discussions.12

Duncan participated in these13

discussions and he will tell you what the subjects14

were and what the questions were and how these15

discussions went. Duncan.16

MR. HAWTHORNE: One of the things17

that Mr. Drinkwater said in his presentation was18

that we had some helpful experience from previous19

transactions. It has become obvious to us in20

doing these transactions that we should always21

make every effort to communicate to anyone who may22

have an interest in the proceedings.23

We did so by contacting people who24

may have historically had some interest in25

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previous licensing proceedings and by making our1

information available to them.2

The basis for those discussions3

was largely so that we could understand each other4

and get to know each other. We recognize that5

potentially people will still have contrary views,6

and that's okay because that's the way life is. 7

We certainly did meet or offer to meet with some8

of the intervenors, and where it was possible to9

have those meetings, I believe that the10

interventions are better informed. We won't11

disagree over matters of fact.12

So our intention in these13

proceedings was to make available to intervenors14

the detail and content of our filing, to explain15

what our thoughts and plans were for the future,16

and to give them a good understanding of our17

business practices and, to be honest, you know,18

the Sierra Club took up our invitation and I'm19

sure you will hear in their own presentation the20

outcome of that discussion where we sought to make21

clear our positions in that.22

Other intervenors we contacted23

with a view to making sure that they had access to24

all the information they may require in order to25

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complete their intervention.1

THE CHAIRPERSON: Ms MacLachan.2

MEMBER MacLACHLAN: My question is3

with respect to the financial guarantees that4

British Energy has outlined in its letter of March5

21st, 2001 to Bruce Power.6

Are these funds earmarked or set7

aside in any way within the books of British8

Energy for Bruce Power?9

MR. JEFFREY: These funds will be10

made available from undrawn banking facilities11

that the group - I'm talking British Energy and12

Cameco - undrawn banking facilities that the13

parent companies have. In other words, the cash14

resources of the parent Cameco and British Energy15

will be used.16

There are not earmarked funds, if17

you like, put away in a segregated fund, if that's18

the background to your question. That's a19

separate issue from the point of view of the20

availability of the funds which are demonstrated21

by looking at the short-term liquidity of the22

business in terms of its financial capacity to23

meet those requirements on a short-term basis.24

The background calculations for25

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those were supplied to the CNSC staff and I talked1

through with Mr. Elder how we arrived at those2

numbers. So that information has been provided.3

MEMBER MacLACHLAN: My concern is4

with respect to the secured nature of those funds. 5

If the parent company is able to use those funds6

for other projects that it may have around the7

world, my concern is with respect to the8

availability and the bankability of these9

financial assurances.10

I see this letter as more of a11

comfort letter as opposed to an instrument, a12

financial instrument that would secure moneys on13

behalf of Bruce Power so that there is a guarantee14

that those moneys are indeed available when and if15

Bruce Power requires them.16

MR. GILCHRIST: There is no17

question but that there is a guarantee that those18

funds will be made available. To the extent that19

the company has those resources, it will make that20

money available.21

To give you a sense of the quantum22

here, in terms of British Energy, the funds23

available to the company as of its published24

accounts for '99/2000 were $983 million against a25

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potential call of $222,314,000 and so on.1

In terms of Cameco's resources,2

Cameco's short-term liquidity capability for the3

financial period 1999 and the third quarter of4

2000 they had $758 million for short-term5

liquidity against a guaranteed requirement of just6

over $41 million.7

So I think it should be apparent8

from those numbers that these requirements can be9

met from the company's short-term cash resources.10

MEMBER MacLACHLAN: If I may,11

Madam Chair.12

I do take your point in terms of13

short-term liquidity. My concern is over the14

longer period of time of operation of Bruce Power.15

My next question would be to staff16

and that is staff of the Commission: What other17

forms of financial instrumentation did you look at18

in order to secure moneys or -- I'll just leave it19

at that.20

MR. BLYTH: I'll pass that21

question to Mr. Elder.22

MR. ELDER: For this type of23

financial assurance, CNSC has no policy and had24

actually never run into a situation like this25

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where we thought we would need something.1

Our first reaction was to look --2

we had a research report done to look at practices3

in other countries and we looked at what --4

actually asked the applicant what they had to do5

in other countries as well.6

While we realize that this is not7

a firm segregated fund, we thought that was8

acceptable for two reasons: One, this is to cover9

contingency, not a known future cost, and we also10

put in an annual reporting requirement in the11

licence condition, so that Bruce Power going12

forward would have to report to us on an annual13

basis that these funds were still available, and14

the licence condition is written that if at any15

time we decide that these funds are no longer of16

sufficient assurance, that we can request another17

type of assurance.18

So there's ongoing monitoring by19

staff on an annual basis.20

MEMBER MacLACHLAN: Thank you.21

THE CHAIRPERSON: Mr. Graham.22

MEMBER GRAHAM: I'm not sure23

whether these are going to be heard, I guess. 24

Okay.25

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Just to follow up on that, and1

that was along the line of my questioning also to2

CNSC staff, did you have any outside or financial3

institutions look at other means of security or4

how security could be secured better?5

MR. TAYLOR: My name is Mike6

Taylor and I am the Deputy Director General of7

Reactor Regulation. I was involved in the initial8

work to determine the process that we would use9

for this activity.10

As Mr. Elder has said, we had a11

research program carried out, we established that12

the USNRC, Nuclear Regulatory Commission, in the13

United States has a similar program for applicants14

who are seeking to transfer licences which is a15

similar practice of changing ownership of plant or16

the operational responsibility for the plant, and17

they require that licensees provide assurance that18

they can cope with a period of non-viability of a19

plant, that is, when the plant is not making any20

money, to keep the plant safe, and that is before21

the period that you go into the decommissioning22

funds.23

So this is, as Peter Elder said, a24

contingency question. It may not ever arise, and25

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they accept from licensees letters of credit such1

as are being proposed here.2

So we felt that since this is the3

first time that we have carried out an operation4

of this sort and it is allowed under the Act,5

Section 24.5 says that the Commission may seek6

financial assurances and we would adopt the7

process that the United States Regulatory8

Commission has been using quite successfully. 9

They also accept the equivalent of six months10

operation and maintenance as the sum involved.11

And since, as we've already12

stated, this is not a certainty, merely a13

contingency against a possibility, we believed it14

was acceptable to accept letters of credit as15

opposed to guaranteed segregated funds.16

MEMBER GRAHAM: Thank you.17

I'll come back to another question18

with regard to the amount. But just on that, is19

that amount noted on the balance sheets of British20

Energy, noted on the financial statements, I21

should say, of British Energy or noted in any way22

that there is a commitment there?23

MR. GILCHRIST: Since this is a24

contingent obligation, this would not be25

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explicitly stated on the balance sheet of the1

parents.2

I would just like to point out3

just for clarity sake so we all understand, we're4

talking here about operational funding. This is5

not part of the decommissioning funding6

obligation.7

So far as I'm aware, I'm not aware8

of any nuclear operator that holds segregated9

funds for operational cash.10

MEMBER GRAHAM: My second question11

is, you have not -- it is not noted on balance12

sheets, so therefore there has never been an13

attempt for a bank letter of guarantee in this?14

MR. GILCHRIST: This is a parent15

company guarantee from an A rated parent.16

MEMBER GRAHAM: With no bank17

guarantee though?18

MS GILLESPIE: The bank, the19

banking facilities that back the guarantee are20

those of the parent. So this is recourse by21

guarantee to the parent which has in turn its own22

banking facilities which provide the cash to the23

amounts that I gave earlier.24

MEMBER GRAHAM: I follow that, but25

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I guess what I'm saying is, it is not noted on any1

financial statements anywhere that other creditors2

or other institutions that may be looking at3

financing obligations for other acquisitions and4

so on, it's not flagged anywhere?5

MR. GILCHRIST: That's because6

it's contingent, correct.7

MEMBER GRAHAM: One other question8

I have, Madam Chairman, to CNSC staff:9

A figure was arrived at, I guess10

six months, and it's more or less a case basis of11

what's being done in other jurisdictions. Because12

of possible shutdowns or longer than six-month13

delays with, and I refer to - hopefully it doesn't14

- but things like feeder pipes and so on that15

could take a longer than that period of shutdown,16

and also the fact because - and we've seen through17

deregulation in other jurisdictions and probably18

in this country what also will happen - but what's19

happened to some utilities, especially in the U.S.20

the very large utilities, that got into financial21

problems not on their own doing but because of22

government deregulation or lack thereof? Are we23

satisfied that six months is a long enough period24

of time and I guess contingency what-if scenario? 25

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If it went longer, what would happen?1

MR. BLYTH: Jim Blyth, Acting2

Director General.3

Yes, we are satisfied with the4

six-month period in that that would be about the5

amount of time required to put the plant into a6

secure shutdown state, say, similar to Bruce A in7

a worst case situation.8

And my colleagues just advised me9

that at that time, say, access to decommissioning10

funds could then be made available.11

THE CHAIRPERSON: Just to check,12

Commission Members, were you able to hear the13

whole presentation by Mr. Blyth?14

Okay, that's fine. Thank you.15

Dr. Barnes.16

MEMBER BARNES: Just two17

additional follow-up questions on that to British18

Energy through the VP.19

Do you have other similar letters20

of credit to other agencies similar to the one21

that we're discussing here?22

MR. GILCHRIST: Yes, we do. We23

have them in respect of each of our AmerGen24

plants. In fact the letters of financial25

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assurance that have been provided are very close1

to the letters that we provide to the AmerGen2

plants: Three Mile Island, Oyster Creek and3

Clinton in respect of the NRC requirements.4

MEMBER BARNES: And what's the5

value of those?6

MR. GILCHRIST: I don't have that7

number in my head.8

DR. BARNES: Approximately?9

MR. GILCHRIST: Just bear with me10

a moment, I'll just confer.11

$200-million is the best of our12

recollection and that is for the three plants.13

DR. BARNES: In total?14

MR. GILCHRIST: Yes, in total.15

MR. JEFFREY: Could I just make an16

observation on one of the comments that was made17

which was with respect to the potential effect of18

the electricity market and reduced prices of19

electricity.20

The basis of marketing there21

differs from Bruce Power's long-term Power22

Purchase Agreements with vendors. We have these23

agreements in place and they will become effective24

when the market opens. If the market does not25

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open, we have an over-life Power Purchase1

Agreement with OPGI. The Power Purchase2

Agreements are for a period, they are a mix of3

three to five years. Our long-term modelling of4

the Ontario market is that prices will be strong5

over the next foreseeable number of years as a6

consequence of the increase in gas prices, and7

British Energy is a very financially robust8

company.9

The final comment worth making is10

that these parent company guarantees from British11

Energy and from Cameco give the right to the Board12

of Directors of Bruce Power to call down upon13

these funds. So it is an obligation of the parent14

company to make these funds available.15

DR. BARNES: Now, you gave us some16

information on the degree of liquidity I guess in17

the past year. Could you give us a little bit18

more information on how that compares with, say,19

each of the last five years?20

MR. GILCHRIST: We would have to21

revert on that.22

MR. JEFFREY: Yes. Could we23

provide a written note, and can we do that by24

close of today? Not having the balance sheet of25

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British Energy plc in front of us as we sit, it1

would be misleading to try and guess these2

numbers.3

But David has quoted our credit4

ratings, and financially we are a very solid5

company and the same applies for Cameco.6

DR. BARNES: Yes. I mean, what7

you're telling us is that you are particularly8

solvent this year and you are telling us that this9

is a kind of line of credit, therefore, that is10

quite adequate given your degree of liquidity. 11

But we have heard you have other outstanding lines12

of credit, and I suppose this Commission has to be13

a little bit concerned that if there is an14

economic downturn, et cetera, et cetera, and that15

the state of deregulation creates uncertainties,16

whether the robustness of that liquidity in the17

longer term is adequate to, in a sense, cover the18

guarantees we are considering today? And figures19

on liquidity for the one year don't necessarily20

mean that the company has been in that situation,21

let's say, over the last five years, which would22

be I think a more convincing case to put before23

us.24

MR. JEFFREY: Well, as I said,25

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we'll provide the numbers. I would state from my1

recollection that since its creation in 19962

British Energy has always been a financially3

extremely strong company. But I will provide the4

information to the Secretary later on, and I5

believe that will substantiate that statement.6

THE CHAIRPERSON: Dr. Carty.7

MEMBER CARTY: Well, I have one8

question for -- can you hear me? Can you hear me9

now?10

Well, I have one question for11

Bruce Power and another one for OPG and Bruce12

Power.13

You described this morning and14

also in the documentation what looks to be a15

commendable program of closer interaction with16

your own employees at Bruce, with the community17

and with the general stakeholders including18

intranet letters and postcards to local residents,19

advertisements in papers, et cetera.20

Could you give us an indication of21

the feedback you've had on that activity? Has it22

been positive, negative? You know, on the surface23

it looks like something that would be a very24

beneficial and valuable thing to do, but I would25

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just like to have some feedback, if possible, on1

how that's impacted so far.2

MR. JEFFREY: If I make an overall3

comment, it is that the response has been4

extremely positive and I think the best measure of5

that are the number of positive interventions6

which have been filed and are on the agenda today.7

If you look at the response, for8

example, in the local media in yesterday's9

Kincardine News the headline story was the10

importance of the Youth Recruitment Program which11

we announced at the Day One Hearing and is part,12

again, of today's mission. There also obviously13

has been a number of negative comments, and I14

think these again are reflected in the submissions15

on the agenda today, but overall it has been16

extremely positive.17

MEMBER CARTY: Okay. Thank you.18

The next question concerns the19

feeder pipes, and I think we are all aware of the20

problems that have arisen at the Point Lepreau21

station with failure in the elbows of those feeder22

pipes.23

OPG mentioned that they are24

developing a new feeder-line inspection process. 25

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I wonder if you could describe what that is, how1

long it's going to take and what the implications2

are for Bruce because, as I understand it, Bruce3

is one of the older stations and it is potentially4

possible that there could be stress, both chemical5

stress and material changes in the feeder pipes,6

which might have implications for the viability of7

this operation?8

MR. GILCHRIST: Perhaps I'll ask9

Pierre Charlebois to make an initial comment from10

OPG's perspective, and Duncan may want to comment11

as well from Bruce Power.12

MR. CHARLEBOIS: Thank you, David. 13

My name is Pierre Charlebois, Senior14

Vice-President Tech Services and Chief Engineer.15

As we indicated at the Pickering A16

Restart Hearing, we had undertaken some work to17

consider development of technology to examine the18

possibility of cracking in the feeder pipes. That19

way was being considered for the Pickering20

restart.21

We have now, as a result of the22

Point Lepreau experience, obviously accelerated23

this work and in fact are considering expanding24

this work to other units at OPG.25

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At the present time, the1

technology is available, it's been used at Point2

Lepreau. We've been working closely with the3

supplier of the service that was at Lepreau and4

more recently at Gentilly 2 to do the inspections5

to, in fact, have that technology available to us6

within OPG and, in fact, it will be available this7

month to start deploying on a trial basis.8

And we have to appreciate, though,9

it is a manual technology at the present time, it10

is not delivered remotely, and would require a11

significant amount of dose or man-rem exposure to12

do a complete reactor.13

So we are undertaking an14

inspection program starting with our Darlington 215

unit in May, then going to Pickering 6 and,16

obviously, Bruce Power will now determine in fact17

exactly what their plans will be. But our plans18

would be to make this available to Bruce Power for19

the Bruce Site.20

I might want to add one point. 21

One of the important elements of having the stress22

cracking is to have residual stresses in the23

elbows themselves. The elbows at Point Lepreau24

were in fact fabricated by cold bending of the25

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feeder carbon steel pipe material and, therefore,1

that process leaves residual stresses in the2

cheeks of the elbow.3

We have been able to confirm that4

the Bruce B plant in fact was stress relieved,5

that those pipes were fabricated with a similar6

technique, but the stress relief was carried out7

afterwards which would reduce the stresses, but8

that's still to be confirmed by actual in-situ9

inspection.10

MEMBER CARTY: As a follow-up to11

that, are the technologies that you're applying12

capable of detecting actual fatigue and stress13

without there being a crack present, because it's14

the potential for stress that I think is very15

important here?16

MR. CHARLEBOIS: The technology17

I'm talking about is ultrasonic technology which,18

in fact, has to have the presence of crack19

initiation through the wall in order to be able to20

detect it.21

There is no technology that we22

know of that would actually detect incipient crack23

formation like actually before there is a material24

deformation. But you can, by examination of25

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elbows in labs, determine the residual stresses1

that are in the material and, therefore, by doing2

that can determine the susceptibility of the3

material to stress- corrosion cracking.4

THE CHAIRPERSON: Dr. Giroux.5

MEMBER GIROUX: I was wanting to6

ask something supplementary to this answer. When7

you say you can detect residual stresses, can you8

do that through non-destructive testing?9

MR. CHARLEBOIS: Of course not,10

Dr. Giroux. This is done through destructive11

testing in a laboratory environment, and you can12

either do that on specimens that you remove from13

the reactor or specimens that remain from the14

actual construction of the reactor that are15

available in our stores.16

MEMBER GIROUX: Thank you. I had17

a question for staff concerning your presentation18

or update on the question of positive reactivity19

and the loss-of-coolant analysis.20

You mention in your document that21

according to the analysis for Bruce there might be22

a fraction of a second during which you might have23

criticality.24

What I would like you to do is to25

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answer three questions: One, maybe to explain1

very briefly what is physically prompt2

criticality, because it's quite obvious that this3

is a very sensitive issue. It's at the core of4

the safety concerns.5

You also say that OPG has been6

imposing restrictive limits to maintain the7

margins of safety, and I would like to hear what8

are these limits?9

And the third one is that you also10

indicate that confirmatory experimental work is11

going on to determine more closely what would be12

the situation. And the question there is: When13

do you expect results from this confirmatory work?14

MR. BLYTH: I will ask Mr. Wigfull15

of our Safety Evaluation Division Analysis to16

respond to your questions.17

MR. WIGFULL: Yes, thank you. I18

am Peter Wigfull, Director of Safety Evaluation19

Division Analysis.20

Prompt Criticality - you can hear21

now, can you? Sorry about that.22

I'm not sure I could describe it23

in the time which we have available, but basically24

it's when the number of prompt neutrons, the25

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population of prompt neutrons is sufficient to1

sustain a nuclear fission by itself.2

Normally prompt neutrons are3

emitted spontaneously and these are then captured4

and converted into thermal neutrons in the5

moderator, in the fuel. There's nothing really6

magic in going into the prompt criticality regime7

in terms of the physics, the basic physics8

equations, but it is an area where there is9

somewhat greater uncertainty than in the known10

regions.11

But in terms of reactor physics,12

this is not a significant issue because power is13

increasing during this transient, the shutdown14

systems will come in within about 20015

milliseconds. Those are the current predictions. 16

The uncertainty in the physics, all that really17

means is that you may get there a bit quicker or a18

bit slower.19

The uncertainty that we have, the20

remaining uncertainty is, well, what is the21

consequence of this? What is the consequence on22

the fuel? And this is the area where there is23

only limited experimental data to show the fuel24

behaviour under this very fast rate of rise of25

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power. We're talking of two to three, power1

increasing at a rate of two to three times per2

second. So in this quarter of a second it's going3

up twice, or whatever.4

These experiments are very5

difficult to carry out. There is a large amount6

of evidence from a Light Water Reactor community7

which shows that the results could be well benign. 8

So the confirmatory tests we are looking for are9

fuel behaviour tests under these rate-of-power10

increase conditions.11

There is some evidence. There is12

not as much as we would like. We have had in fact13

the world's leading experts under contract to the14

CNSC over the last 10 years looking at this and15

they have concluded generally that the modelling16

is correct that OPG has used, but they still feel17

there should be more experimental data. So this18

is the confirmatory data.19

You asked about the time that it20

would take to conduct. These are very difficult21

experiments. Perhaps you should ask OPG. Several22

years, several years.23

The other part of the question you24

asked, Dr. Giroux, related to the limit. The25

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typical restrictions that went on were limits on1

isotopic -- the purity of the moderator, the2

allowable flux tilt. This is the power distortion3

across the core that is allowed during normal4

operation that has been reduced.5

So Bruce B, the biggest credit6

that has been taken in the latest analysis is for7

the fact that the actual shut-off rods into the8

core are much quicker than we have allowed for in9

previous analyses. They have taken account of the10

actual rod insertion times rather than the11

stylized acceptance criteria that we used in the12

past.13

MEMBER GIROUX: Thank you.14

THE CHAIRPERSON: The second round15

of questioning. Ms MacLachan?16

MEMBER MacLACHLAN: This is17

another question again directed at British Energy.18

In a number of the Interventions19

reference has been made to a special safety audit20

by the United Kingdom's Nuclear Installation21

Inspectorate, the NII, and this information has22

come forward from the Intervenors.23

There is very little detail, but24

the allegation is that British Energy was harshly25

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criticized for cutbacks to staff and funding in1

relation to stations operated in the U.K. And I'm2

wondering if British Energy can comment on the3

existence of this report, the circumstances4

surrounding this report and the findings in the5

report?6

MR. JEFFREY: There is full7

information available on the NRI report on the web8

site. It was an audit which the NII initiated9

about two years ago. The audit was not directed10

towards the operating stations at all. It was an11

audit of the central engineering and related12

resources.13

The NII's Chief Inspector made a14

statement at the time when this report was made15

public that there was no immediate challenge to16

safety of the operating stations.17

The background to the audit is18

that 14 of the 15 nuclear reactors which we19

operate in the U.K. are advanced-gas cold20

reactors. They are unique to British Energy. No21

one else in the world owns or operates advance-gas22

cooled reactors. In the U.K. there has been no23

ordering of any further advance-gas cooled24

reactors for about the past 20 years.25

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And the NII's concern was1

initiated by the fact that the design and2

manufacturing results for AGRs in the U.K. was3

falling off, that some of the contractors who had4

been responsible for designing these plants, there5

had been change of ownership, they were ceasing to6

trade, and there was a potentiality for withdrawal7

of services.8

British Energy had set up9

partnering relationships with these contractors10

who had been the Design Authority, and we believe11

that this was an appropriate way of getting some12

of our engineering, central engineering work13

carried out. The NII had concerns about this.14

In their audit report which came15

out about 18 months or so ago, they identified a16

number of good practices within British Energy,17

the professionalism of the staff, their technical18

competence and what they had found, our total19

commitment to safety. But nonetheless they were20

concerned that our use of contractors was21

increasing and they believed that that wasn't a22

satisfactory way of continuing.23

We have accepted the NII's view. 24

We have submitted to the NII a detailed report25

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addressing all the hundred or so of their1

findings. We have addressed all of their2

concerns.3

We have reduced our use of outside4

contracts, engineering staff. We have taken steps5

to augment our own central engineering staff, and6

we have put in place what we believe are improved7

methods of planning the future, what role these8

teams have to carry out, and in total British9

Energy has expended about fifty man-years of10

effort in addressing the NII audit.11

Our report to the NII is currently12

under consideration by Her Majesty's Inspectorate,13

and I can assure this Commission that any of the14

experiences we've had from the NII audit will be15

fed into the approach that will be used by Bruce16

Power going forwards.17

MEMBER MacLACHLAN: Thank you very18

much. I got the impression that your report was19

being considered by NII at the current time?20

MR. JEFFREY: That's correct.21

MEMBER MacLACHLAN: Has it been22

released to the public?23

MR. JEFFREY: No, it has not. It24

will be, I would imagine, in about four weeks'25

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time.1

The NII have got the report and2

they are analyzing it, and there will be3

discussions between the NII and British Energy,4

and at that time the report will be made available5

and it will be made available to the CNSC staff as6

soon as it is released by the NII for review.7

MEMBER MacLACHLAN: Madam Chair,8

if I may direct a question to staff about the9

degree to which the NII report was analyzed,10

accessed and dialogue occurred with the company in11

relation to their response to the issues12

highlighted in the NII report?13

MR. BLYTH: Jim Blyth. I would14

like to note that we identified the NII report and15

the issues, potential issues it had for us in our16

CMD, so we were not unaware of its existence nor17

of its potential implications on what might happen18

at the Bruce Site. And I'll ask Mr. Elder to19

provide more detail.20

MR. ELDER: As part of our review21

of Bruce Power's application, we did talk to the22

regulators in the U.K. and in the U.S. who had23

experience dealing with British Energy and looked24

at audit reports, not only this one but other25

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reports they had done on the operation of the1

sites and any other information we could find2

available.3

What we found that was the most,4

we thought was most relevant to the application by5

Bruce Power was their management of change process6

and the criticisms of that management change7

process in the NII audit, because Bruce Power had8

said they were going to put in place a formal9

management change process at Bruce.10

So we confirmed with them that the11

process they were putting in place in Bruce was an12

improved process that had taken account of the13

corrective actions to respond to the NII audit. 14

So what they're planning to put in place at Bruce15

takes into account the corrective actions that the16

NII had noted.17

MR. BLYTH: I would like to add18

one comment, maybe two more things. We also have19

seven Project Officers at site full-time who are20

our eyes and ears and are monitoring these sorts21

of things on a day-to-day basis. We have also22

planned for later in the year, June I believe, an23

organizational and management assessment at the24

Bruce Site which will look into these sort of25

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things as well.1

THE CHAIRPERSON: Mr. Graham.2

MEMBER GRAHAM: Thank you. I3

don't want to belabour the financial, but I just4

had one more question of clarification.5

The $900-million that you had6

mentioned or thereabouts -- I'm not sure of the7

exact figure -- is that an accumulated figure or8

is that a one-year figure?9

MR. GILCHRIST: The $983-million10

that I referred to is the financial capacity of11

the business to meet calls as required through the12

financial guarantees within any year. So within a13

six-month period for which this is designed, then14

it would have access to that amount of cash.15

MEMBER GRAHAM: We talked about,16

or we know what the amount is for Canada. We17

talked about $200-million U.S. which is another18

$300-million, equal to $300-million Canadian.19

Are there any other guarantees in20

the U.K. with regard to your 15 reactors there?21

MR. GILCHRIST: There are no22

guarantees with respect to the 15 reactors in the23

U.K. There is one guarantee in respect of a power24

station, a coal-fired power station called ECRA,25

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but I have deducted that amount from the figures1

before arriving at the $983-million.2

MEMBER GRAHAM: And was it noted3

on - it was one of the noted ones; was it on the4

financial statements?5

MR. GILCHRIST: It was not a --6

again, it's a contingency requirement.7

MEMBER GRAHAM: Okay, thank you. 8

The other question I had and I would asked it at9

the Day One Hearing and I don't think I got a full10

explanation and I would like to try it again. It11

is with regard to the 15 units you have in the12

U.K.13

You have, I guess, somewhere in14

the vicinity of some 5,200 employees producing15

about 9,600 megawatts, so as a rule of thumb it's16

almost two megawatts to an employee or thereabouts17

or something to that effect?18

MR. GILCHRIST: Yes.19

MEMBER GRAHAM: And I know that is20

very simple and perhaps not the correct way of21

saying it.22

MR. GILCHRIST: Okay.23

MEMBER GRAHAM: But here at Bruce24

it's about one-to-one. And what I guess I'm25

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asking is: What is your projected figures as far1

as staffing three years, four years down the road,2

not right now, but at Bruce? What would your3

projected staffing be at the Bruce B facility,4

strictly at Bruce B, and then we can ask on Bruce5

A also?6

MR. JEFFREY: Okay. Could I go7

back over the arithmetic --8

MEMBER GRAHAM: Yes.9

MR. JEFFREY: -- because you are10

quite right, there are about nine-and-a-half11

megawatts in the U.K. and there are 5,00012

employees, so that's two-to-one.13

At Bruce I think the fairer14

calculation, because quite a substantial number of15

the people on the site are actually engaged on16

Bruce A activities. Although it's shut down and17

not producing electricity it still requires a lot18

of care and attention.19

So if you add up the whole of the20

Bruce Site you get something that is about 6,20021

with a staffing of 3,000. So you again have got22

roughly a two-to-one ratio.23

So that although it's not24

operating, it does require manning and the proper25

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maintenance against the safety case.1

MEMBER GRAHAM: You're saying that2

if and when Bruce A is operational, you will still3

only need 3,200 staffing for the two units, both4

Bruce A and Bruce B?5

MR. JEFFERY: Yes, because there6

wasn't a rundown of staffing when Bruce A was7

closed and, indeed, at that point of time the8

Heavy Water Plant on the site was also operating.9

And you know, this is one of the10

factors that feeds into a comment I think we11

probably made on Day One, that the measurements of12

productivity on the site are about 15 per cent, 1513

per cent productivity.14

And so for the reasons that Duncan15

outlined, with better work planning and16

organization and improved training, there are more17

than enough people on the site to deal with the18

restart of Bruce A.19

MEMBER GRAHAM: In your financials20

that you did - this would be my final question,21

Madam Chair - in the financials that you did, how22

long did you consider your financials of23

supporting 3,200 employees or staffing for the24

generation of only operating B? What was your25

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projection as to when you had to have A up and1

going?2

MR. JEFFREY: I think what would3

be helpful there for us would be to give an4

explanation of what that sum is there for. 5

Duncan.6

MR. HAWTHORNE: In terms of the7

financial guarantees?8

MR. JEFFREY: Yes.9

MR. HAWTHORNE: A couple of issues10

maybe to make the Commission aware of. As we11

evaluated the call for support from the parent12

company, having been in the U.S. for the last13

three years as the Chief Operating officer for BE14

Inc., I understand much of this dialogue on15

parental guarantees.16

AmerGen started on the basis of17

acquiring a single unit facility with no other18

source of income, and the recognition was that a19

single unit going down would mean that there was20

absolutely no income because there weren't any21

diverse plants or technologies around.22

As we added more plants to our23

designs, we ended up with pressurized water24

reactors which we have in TMI, boiling water25

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reactors which we have in Clinton. So you have a1

diversity of design: AGLs in the U.K., PWRs in2

areas, BWRs and now CANDUs potentially. So you3

have diverse technology.4

We also have diverse market5

places; i.e., trading in the U.K. pool, trading in6

the PGM market which is where TMI and Oyster Creek7

are, and trading in the Illinois market where8

Clinton is, and potentially trading in Ontario9

where the CANDU plants are.10

So in terms of evaluating the11

overall business case for Bruce B, we valued the12

transaction on the basis of no A Station restart13

and what that would look like as a business case14

because, clearly, we had not conducted the15

evaluation of the restart potential of the Bruce A16

at the time we struck the transaction with OPG17

ourselves. So we had to value the overall18

transaction on the basis of perhaps not finding a19

feasible restart scenario for Bruce A.20

In that event, the calculation for21

financial guarantees assumed that we lost, for22

some reason - whilst historically that has never23

occurred - we lost all four units from Bruce B24

with the full complement of staff and all of the25

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O&M costs, and that's how we calculated this.1

Whilst we recognized that that2

scenario had never really been in place, the only3

time historically the plants have ever been down4

in totality has been for a period of nine days as5

opposed to six months. So, you know, there's6

pretty conservative assumptions in there.7

As we look forward, we certainly8

had a view that were it possible to restart Bruce9

A, that clearly there is a yardstick we can use,10

if you like, which is the program that OPG11

contemplates for Pickering, and we can sort of12

play that into a scenario in terms of overall13

staffing requirements.14

But, as Robin said, there's a15

recognition that if you look at overall allocation16

of staff on the site, you could probably identify17

about 1,600 people who are clearly dedicated to18

Bruce A that you would sort of bring, for19

instance, being the operational staff against20

3,200 megawatts which gives you your two-for-one21

relationship which is, you know, a pretty, as you22

say a pretty good yardstick in terms of where we23

are.24

So the issue for us has been, as25

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we've been looking at the potential to restart1

Bruce A, it's been against this overall site2

capability review. It's been recognizing the3

critical skills if you were contemplating restart. 4

Truly not a numerical argument as such; it's more5

an issue about recognizing that many of the staff6

who would be required to take a role in the A7

Station restart are actually currently allocated8

to positioning in Bruce B. And what we had to do9

is satisfy ourselves that those staff could be10

relocated with minimal impact, and that's really11

where our discussions have been.12

So in terms of financial13

guarantees there's lots of diversity, and what we14

are doing here that differentiates the U.S.15

situation, as we looked at the business plan we16

assumed that probably two to three years for17

restart of anything on Bruce A. And we assumed at18

the time of striking the deal that the O&M costs19

would remain the same. And so the parental20

guarantees were in that worst case scenario in21

terms of the overall operating and maintenance22

costs.23

MEMBER GRAHAM: And in that you24

also are including the $140-million that you have25

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for safety-related issues and so on?1

MR. HAWTHORNE: Yes, yes.2

MEMBER GRAHAM: One other3

question, Madam Chairman, to CNSC staff. You4

concur with the figures of 1,600 related to Bruce5

A?6

MR. BLYTH: I would ask the Head7

of our Site Office to address that.8

MR. NIXON: Yes. We have looked9

at this very closely, and in the next few months10

we're going to bring in a team from our head11

office, bolstered by consultants, who will look at12

the organization and management of the station13

and, hopefully, from that we'll get a very precise14

idea of exactly how many people are required for15

Bruce B in future.16

MR. HAWTHORNE: Madam President,17

if I could just interrupt, I believe I may have18

misquoted and said "Bruce A" when I intended to19

say "Bruce B," and I apologize if I gave the wrong20

impression there.21

THE CHAIRPERSON: We understood22

that.23

MR. HAWTHORNE: I was just24

pointing out that I may have misspoke when I said25

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"Bruce A" rather than "Bruce B." I apologize.1

THE CHAIRPERSON: At this time I2

would like to take a break, and it is now 11:10. 3

It will be a 15-minute break and we'll be back at4

11:25.5

I would ask all the applicants,6

the CNSC staff and the OPG to return to the places7

because we haven't finished the questioning. So8

if you could return at 11:25. Thank you.9

--- Recess taken at 11:10 a.m.10

--- On resuming at 11:25 a.m.11

THE CHAIRPERSON: Take your seats. 12

We are ready to resume.13

We are now going to continue the14

questioning from the Commission Members, and I15

will ask Dr. Barnes to ask questions, please.16

MEMBER BARNES: I just had two or17

three, I think, shorter questions and somewhat18

residual from earlier comments. I would like to19

address one to Pierre Charelebois just really for20

information and not directly related perhaps to21

today's presentation.22

You drew some comparison on the23

bending of the feeder pipe and you gave us some24

information on Point Lepreau, the different style25

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where they were initially produced verus those at1

Bruce. How does Bruce compare to Pickering?2

MR. CHARLEBOIS: Pierre3

Charlebois, Senior Vice-President, Chief Nuclear4

Engineer.5

We're still researching a lot of6

the information, Dr. Barnes, but I can tell you7

what we know at the present time.8

The Pickering A and Bruce A elbows9

were actually, we believed, forged elbows and10

therefore were welded into place in straight11

pieces of pipes which makes obviously the12

construction and the possibility of residual13

stresses much different and much lower in14

probability.15

So Pickering A and Bruce A were16

manufactured using elbows that were produced17

separately and then welded in.18

For Bruce B, Pickering B and19

Darlington, the method of fabrication was similar20

to Lepreau NG-2 which is bending of pipe, but21

there were stress relieving that took place like22

at Bruce B, and at Darlington the pipe was23

actually bent under hot conditions which would add24

stress relieving as well.25

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We are still right now gathering1

the information with respect to Pickering B and we2

will have that information shortly.3

MEMBER BARNES: Thank you. The4

second point really probably to OPG: In reply to5

a comment from Bruce Power, it was my recollection6

that at least I think Bruce Power gave us the7

implication that the amount of staffing here at8

Bruce has more or less stayed the same, but9

weren't there a number of people transferred from10

Bruce effectively to other OPG stations?11

MR. CHARLEBOIS: I think Mr. Gene12

Preston will address that question.13

MR. PRESTON: Yes, Gene Preston,14

Executive VP, Chief Nuclear Officer.15

Yes, Dr. Barnes, we did transfer16

600 people from the Bruce Site to other OPG17

facilities. I will add, however, that we had a18

heavy water facility that was staffed with some19

900 people and that they were not supporting20

either of the Generating Stations.21

So, consequently, the numbers that22

Duncan Hawthorne referred to were the total site23

populations that would show that we had some 50024

folks above our needs even today.25

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MEMBER BARNES: And a final1

question to Bruce Power, British Energy in a2

sense. The Commission and earlier the Board has3

seen at least OPG wrestle with issues of4

productivity and management of change and at one5

point bringing in a number of Senior6

Vice-Presidents and senior staff from the United7

States with experience in different systems to8

try, in a sense to change the system in the9

Ontario plants. And you've raised the issue of10

trying to improve productivity here at Bruce, and11

the issue in general has come up about the12

management of change.13

Perhaps you could be a little bit14

more specific, given the fact that we are today15

going into a period of deregulation where there16

will be certainly pressure on you and your17

shareholders to make that very effective in a18

fairly short period of time.19

I think it's pleasing to see the20

cooperation at least initially of the unions in21

the documents that we received today, but to be22

really effective, could you convince us of the23

methods and the timeframe in which you can really24

effect this management of change in a really25

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effective way?1

MR. JEFFREY: I'll kick off and2

then Duncan will follow.3

Your comment about bringing in4

people from outside. I think one of the strengths5

of the Bruce Power approach is we have brought in6

about 20 or so people from British Energy and7

principally, obviously, Duncan is the new CEO who8

had extensive experience of the management of9

change in the U.K. plants, experienced that on the10

U.S. plants which we acquired through our joint11

venture, and he has supporting him a number of12

people from British Energy who similarly have had13

that sort of experience.14

Our approach though has been a15

blend of experienced OPGI people such as Robert16

Nixon who know the plant very well and provide17

stability, bringing in a number of Canadians. For18

example, I have made reference to Ken Talbot after19

three or four years international experience20

coming back to a plant that he knows well. Also21

the introduction of some private sector Canadian22

experience, for example our VP in Human Relations23

was recruited from Suncor and has had experience24

with the private sector in Fort McMurray. So it's25

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a blend of expertise from a number of directions.1

With respect to the manning2

levels, that Bruce Power is a partnership; there3

are two principal unions who will be equity4

participants in Bruce Power. The Memorandum of5

Understanding you have seen, and that forms, we6

believe, the starting point for a new era in7

industrial relations in the electricity generation8

sector.9

We have given very strong10

commitments with respect to Bruce Power inheriting11

the collective agreement. We have given strong12

commitments that there will be no compulsory13

lay-offs. That has never been in our vocabulary,14

that if the overall manning level reduces it will15

reduce through voluntary and through natural16

attrition. So these are some of the values which17

we bring.18

In terms of further details on19

approach and manning, Duncan, if I hand over to20

you.21

MR. HAWTHORNE: If I can just22

start by saying this plant represents the 16th due23

diligence I have personally done since I have come24

to North America. I have visited a lot of25

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facilities here and there are some common things1

that run through these.2

One thing that we noted very3

clearly in the Bruce facility is there is an4

improving trend. There has been a record of5

improvement. Gene Preston and his team with6

Robert have delivered improvements at the Bruce7

Site. And if you look at the new assessment of8

the Bruce plants in terms of where they were9

against the composite manual performance index and10

looked where they are today, you would see very11

marked and measurable and sustainable improvement12

there. That's an important thing to note when you13

do due diligence, note where the performance is14

and is there an improving trend or a deteriorating15

trend.16

The common things that run through17

most of the plants I have visited are the18

engagement of the work force, their involvement19

and the change process as a vehicle to actually20

expedite changes. The Memorandums of21

Understanding that we crafted here are very22

similar to documents that we executed in all of23

our U.S. acquisitions, the language is very24

similar, and the behaviours of it seek to create a25

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partnership approach, initially trying to engage1

the Union leadership because they themselves are2

the people who quite naturally the employees would3

turn to for conference about this new Owner in a4

period of change.5

We have had some very good6

dialogue with the Union Officers. We have begun7

an improvement process that engages them in our8

decision-making and helps them to be able to tell9

the story throughout the site.10

So, if you ask me, I said earlier11

there is no magic wand, there is no single12

approach here. But you have in general, top13

performing plants do so because they engage the14

work force, they involve them in decision-making,15

and in the case of a company such as ourselves we16

have a large nuclear base, we can identify best17

practices and processes and bring those to the18

site and in that way shorten the learning curve. 19

That is basically the formula we have been20

successful in delivering in our U.K. plant21

performance and we've delivered to the AmerGen22

plants.23

MEMBER BARNES: Just a couple of24

comments in reply.25

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I think we've seen the changes1

that Gene Preston and others have brought to OPG. 2

What still begs the question really is the extent3

to which you can keep that trend going, all right? 4

And I think other members of the Commission have5

asked questions really about the number of staff6

you would need, let's say, to run Bruce - putting7

A aside for the time being - and I think you're in8

a position to talk about compulsory lay-offs9

because, as you indicated right at the beginning,10

the natural attrition, I think you get the figure11

being reduced by 50 per cent anyway over a fairly12

short period of time just because of the13

demography and the age of the work force and so14

on.15

So it's not clear to me how many16

people you would necessarily need to run Bruce B17

and get increased productivity.18

But what I haven't heard is, in a19

sense, the mechanisms by which you would increase20

productivity. Is this sort of an organizational21

one? Is it trying to get more work per individual? 22

Is it trying to get teams to work better? Because23

I think we've seen OPG try to implement a number24

of these things.25

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So, I'm not quite clear yet how1

British Energy is going to make a significant2

extension of the improvements that you have3

already observed or have already been done by OPG4

such that your productivity will increase along5

the lines that you replied to my colleague here6

earlier.7

MR. JEFFREY: Sure. If I can give8

an example - and I'm sorry, I have been about9

30,000 feet up and maybe want to get a bit lower10

down.11

If you look at the heart and soul12

of a nuclear facility it's in the work management13

process, it's in the ability to effectively14

deliver people to the work site with the15

appropriate training, instructions, briefing and16

equipment to be successful at the work site.17

In order to understand what that18

looks like, when we conducted the due diligence we19

brought seven people from a variety of plants, all20

of whom had work management experience, and we21

asked them to critique the performance of the work22

management system.23

Since we have been on the site24

with help and support from Robert here as the Site25

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VP, an improvement process was put in place where1

Robert allocated some people with Gene's support2

to conduct a review of the work management process3

on the site. That team was drawn from staff at4

all levels. Sixteen people participated in that5

review and they identified some very clear6

opportunities to improve the process.7

They found things which I think8

were new discoveries, at least if not new, the9

magnitude of their impact on the productivity of10

the site were better understood because of the11

process. That team made five key recommendations12

to make improvements. Whilst in the OPG licensing13

arena they presented to the executive team of OPG,14

Gene himself had seen that report as being15

favourable to the point where he asked the same16

team to present to Pickering and Darlington and17

ensure that the lessons learned from that could be18

delivered then to OPG.19

The recommendations are already20

being implemented by OPG, and the intention then21

was some of the things that we ourselves have22

talked about. It's about creating better23

management of the work flow, allowing the staff to24

be properly supported such that they can be25

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successful in the field.1

Let me give you a big picture2

number because it helps to give you some detail. 3

What the team identified was that in terms of4

allocating man- hours to the initiation of a5

defect without having actually delivered anything6

in the field, it cost $574 of time. And of that7

activity, the team found that 60 per cent of those8

tasks that had gone through that cycle did not get9

successfully executed in the field.10

So there was a tremendous amount11

of activity feeding an engine that did not in12

actual fact result in work being completed13

successfully in the field.14

Some of the improvements that15

Robert and Gene have implemented have actually16

sought to provide a much more improved hit rate on17

those activities. The simple outcome of that is18

that we're actually able to expedite more work in19

the field. And if you were to look now at the20

Bruce Sites over the last seven months, at the21

performance indicator, looking at maintenance22

backlog which clearly the site inspection could23

do, you would see some significant improvement in24

the maintenance backlog as a result of those five25

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recommendations being implemented.1

So improvements can be made in a2

timely fashion, and the process for doing it is,3

if you like, a benchmark which is to bring a group4

of people who are living every day within your5

process, identify the improvements that they can6

own, and then act in a timely fashion to implement7

those. From that success, you know, you can8

deliver more and more improvements.9

That's the basic ethos that we10

have here.11

MEMBER BARNES: Just a final one,12

because we talked about productivity, we talked13

about staffing. But I think one of our concerns14

as a Commission clearly is the aspect of safety,15

and I think some of the questions have been trying16

to explore things that would feed back on issues17

of safety.18

So, could you make a final comment19

along these lines of productivity and staffing and20

so on and maybe a comment as to how you find the21

issues of safety at the plant at the present time22

and the changes to hopefully improve safety23

issues?24

MR. HAWTHORNE: As we mentioned in25

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our presentation, we have experience in all of our1

plants in the U.K. on the International Safety2

Rating System. We have explained to the3

Commission previously that it is our intention to4

see this as a benchmark to provide a more5

comprehensive Safety Management System.6

Again, working with OPG, there's7

been an early start to that activity because it8

did deliver safety improvements. Effectively the9

ISRS system is very prescriptive in terms of10

management of safety, but the process for11

implementing the safety improvements is very12

engaging of staff. It's a teamwork in process. 13

There's 20 managing elements.14

What the sites have done currently15

is they have chosen to implement eight of those16

management elements right now and are working17

actively to deliver improvements. ISRS is driven18

as a structure to create improvement in the field19

as its first activity. Some of the key elements20

right now that the station are implementing are to21

improve workplace inspection, organizational22

rules, personal protective equipment,23

communications briefings. All of those things are24

actually trying to reach out to a large audience25

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on the site.1

At this point in time the site has2

around a hundred people actively involved in these3

safety initiatives. Clearly, if we were to4

implement all twenty elements, then that could be5

as much as 300 staff directly involved on a6

regular basis and delivering that integrated7

Safety Management Process.8

Currently our view is that the9

Safety Management System doesn't have an10

all-embracing methodology.11

THE CHAIRPERSON: Dr. Carty.12

MEMBER CARTY: Yes. Thank you13

very much, Madam Chairman.14

I would like to focus on the15

agreement between OPG and Bruce Power, and it's my16

understanding that the two organizations have17

signed a term sheet which delineates the nature of18

the technical expertise and the services which19

have been provided largely from OPG to Bruce20

Power, but also to a lesser extent in the other21

direction. In my experience term sheets do not22

always translate into fully signed up documents.23

So the question is: What is the24

closing date for that fully signed-up agreement? 25

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Is it dependent on the availability of a licence? 1

And I will follow that with a question about the2

marketplace and the environment.3

MR. GILCHRIST: Just to be clear,4

Dr. Carty, the term sheets that were in place in5

July have now been turned into full-fledged6

agreements. The principles are the same but7

additional details have been fleshed out.8

So we are in a position to sign9

those agreements, and the idea would be to sign10

them so they would be effective on financial11

closing.12

But the term sheets have been13

converted into sort of full-level service14

agreements and we're in a position to sign those15

on financial close.16

MR. JEFFREY: And with respect to17

the time-line that you asked, David and I have a18

program of sitting down at the beginning of next19

week with a target that all of these legally20

required documents will be signed and they will be21

placed in escrow, and the condition for them22

becoming valid and live is the issue of the CNSC23

licence.24

So that all of the legal and25

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financial work is being programmed very tightly1

against a time-line of the end of next week.2

MEMBER CARTY: Okay. Thank you on3

that thought.4

Now, what you mentioned in the5

documentation is the fact that the organizations6

will be operating in a competitive marketplace. 7

Does that mean that each organization will have8

the option of, I suppose, abandoning the agreement9

if in fact the other cannot deliver the services10

and the technical expertise on the competitive11

commercial basis that you expect to be operating12

in?13

MR. JEFFREY: Well, the14

competitive market still is to open in Ontario,15

and there is some uncertainty as to when that is16

going to take place.17

As I said earlier, if the18

competitive market does not open there is a19

legally binding Power Purchase Agreement between20

Bruce Power and OPGI from which the output from21

the plant is sold over the life of the plant to22

OPGI.23

On the basis that the competitive24

market does open within the next year or so, the25

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output will be sold to other customers. It will1

be sold by Bruce Power wholesale to people who2

then sell on to industrial or private customers. 3

And again, these contracts are in place so there4

is competition in the marketplace.5

I think there's a very important6

issue in terms of the engineering science which7

lies behind a lot of the safety case development8

and the understanding of engineering techniques. 9

There will be, for example, through the CANDU10

Owners Club, an ongoing pooling of that knowledge11

and expertise in terms of the underlying science12

behind the CANDUs. If one of the particular13

services was not provided, that would not provide14

grounds for cancellation of the lease. I mean,15

that is just something that we would sort out.16

In terms of arrangements17

associated with term sheets, this is not something18

that is novel to this transaction. Both in 199019

when in the U.K., there was the initial20

restructuring of the electricity industry, and21

again in 1996 when British Energy was created and22

there was another restructuring, there were a23

large number of shared services including24

engineering and laundry services, and arrangements25

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very similar to the service level agreements that1

were set up between Magnox, one of the U.K.2

private sector nuclear companies and British3

Energy plc.4

And I think noting that Duncan and5

I negotiated on behalf of British Energy something6

like 50 or 40 term sheets which bear a lot of7

resemblance to some of the term sheets we are8

discussing today, and these term sheets have stood9

the test of time in the relationship between these10

two U.K. companies.11

THE CHAIRPERSON: I have some12

questions myself. We had in the presentation by13

Bruce Power some discussion of the safety culture14

and the definition that is used by Bruce Power.15

I would like to ask the Commission16

staff for their assessment of the material that17

was provided by Bruce Power in terms of the18

content of a safety culture and your evaluation of19

that definition?20

MR. BLYTH: I'll ask Mr.21

Waddington from the Directorate of Environmental22

Human Performance Assessment to address that.23

MR. WADDINGTON: Thank you, Madam24

Chairman.25

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First of all, the CNSC staff have1

put quite considerable effort over the last few2

years into monitoring the safety culture at3

nuclear stations in Canada. There are actually4

many facets to this topic that we look at.5

First of all, of course, is that6

the corporate management of an organization must7

have a continual highly visible support for a high8

level of safety. This has to translate into real9

things like conservative decision-making in the10

plant within the organization and a questioning11

attitude throughout the organization.12

There are a number of management13

attributes that can be observed in an organization14

that must function well to achieve a high level of15

safety culture and result in a highly reliable16

organization. These attributes that we look for17

are based on quite a considerable research base18

now, but there are also attributes that you and19

anybody else would expect.20

Are there good communications, for21

example, between the executive and the shop22

foreman and between one department and another? 23

Are procedures clear? Are they written by the24

people who use them? Have they been formally25

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approved? Are they up-to-date? Do people know1

what is expected of them? Are relations and2

responsibilities clear?3

There are 19 attributes that we4

looked for, based on the research work that we've5

done that we look for in an organization to assure6

high reliability. We look for these things in7

several different ways. First of all, our Site8

Project Officers review the safety culture on a9

daily basis. They are observing whether the10

licensees are making conservative decisions,11

whether the attitude of the staff is putting12

safety first, and that is done by our site13

officers on a day-to-day basis. They meet with14

the site manager every month, and that provides us15

an immediate assessment of what is happening on16

the site.17

Secondly, we carry out audits,18

both quality assurance, quality management,19

radiation protection, to assess the formal20

processes that exist within the site.21

Thirdly, we carry out a fairly new22

type of audit, an organization and management23

audit, which has been referred to previously by24

Mr. Blyth, which looks quite explicitly at those25

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19 or a subset of those 19 attributes, things like1

communication, work management as has been2

mentioned by Duncan earlier.3

We plan to carry out a formal4

organizational management audit of Bruce Power,5

assuming that they get their licence in June of6

this year, which will give us a direct measure. 7

We can also see the information that we receive8

today which is obviously the intent of Bruce9

Power. If we look at the statements that Bruce10

Power have been making to this Commission11

specifically on their vision, on the clarity of12

the statements that they make, those are the sorts13

of statements that we would expect to be made by14

an organization of high reliability.15

In terms of the main part of the16

organization, we've heard that the staff of OPG17

which is currently on the site will be18

transferring to Bruce Power. We have not done an19

organizational management audit of Bruce in the20

past. We have done organizational management21

audits of Pickering and Darlington which start22

from the strategic apex all the way to the shop23

floor.24

In those stations which we can25

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reasonably assume, given that the senior1

management of OPG was giving the same message to2

Bruce as it was to its previous station, that some3

of those findings would be consistent. The4

findings of our previous audits of Pickering and5

Darlington showed that there was basically a good6

safety culture in the people involved. There were7

plenty of difficulties which have been in front of8

this Board or this Commission on occasions. There9

are problems in work management that have been10

previously referred to, some difficulties in11

quality assurance that have been raised12

previously.13

We believe that the proposals that14

Bruce Power have made to us are appropriate. Time15

will of course tell whether the proposals in fact16

will translate into the sorts of levels of safety17

culture that we anticipate are necessary to18

produce an organization of high reliability.19

But our overall conclusion at the20

moment is that the statements that have been made21

by Bruce Power are appropriate. We will use our22

O&M audit slated for June as a baseline for23

continuing monitoring of how the improvements that24

Bruce Power are expecting will carry out or will25

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come to pass. Our staff at the site, our Project1

Managers, Project Officers, will be continuing to2

review on a daily basis what actually occurs in3

the field.4

I trust that gives you a feel for5

where the staff are coming from, Madam Chair.6

THE CHAIRPERSON: Thank you. My7

second question is with specific regard to the8

written submission H6.36. My question would be to9

OPG and then to staff.10

When I look at the attachment 111

which is the summary table of that report, OPG if12

you could correct me if my math is wrong here13

because I did what is call a "summary of the14

summary" for my own edification.15

I see 37 lines, and I see 20 of16

those were not assessed by the Commission, and I17

would ask the Commission the specifics of that.18

I see two unacceptable areas19

becoming conditionally acceptable. I see 1320

remaining the same which was conditionally21

acceptable. I see one acceptable becoming22

conditionally, and I see, I think it's one that I23

said remained the same. I'm trying to read my24

notes here.25

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But I guess those are my1

"summaries of the summaries." I guess my first2

question to OPG is: Is that more or less correct? 3

And, secondly, do you have any comments on that4

because that's in essence the status report?5

MR. GILCHRIST: Yes, Madam Chair. 6

That is an accurate summarization. If you would7

like more information about the details, I would8

ask that Robert Nixon, the Site VP, provide a more9

detailed answer.10

THE CHAIRPERSON: Well, perhaps11

what I will do is just ask the staff and then I'll12

come back to Mr. Nixon if I can.13

For the staff, for the 20 areas14

which were not assessed of the 37, without going15

into details of each of those 20, why would those16

areas not be assessed?17

MR. BLYTH: In the staff's18

assessment, we focused on the areas that we felt19

were most significant with respect to Bruce B or20

those requiring short-term action. A number of21

these are longer term issues such as generic22

action items and the like which will only be23

resolved over the longer period.24

THE CHAIRPERSON: But in essence,25

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there is very little change I guess in the1

assessment; am I correct?2

MR. BLYTH: That's correct. And3

one of the reasons for that is many of the4

conditionally acceptable items are items where5

there are improvement programs and the requirement6

for the rating to become acceptable is the7

completion of the program.8

Bruce Power is committed to9

continue those programs, but as the Commission is10

well aware, many of those activities are scheduled11

for completion next year, 2002/2003.12

THE CHAIRPERSON: So is it fair to13

ask the Commission staff then: Are you satisfied14

with the progress that has been made on those15

items that you assessed?16

MR. BLYTH: Yes, it is fair, and17

yes, we are satisfied.18

THE CHAIRPERSON: Okay. So then19

if I could come back then to OPG with regards to20

the assessment made by the staff on those items,21

is there anything that you would like to add to22

those comments?23

MR. PRESTON: Let me answer a24

point of clarification before we turn it over to25

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you, Robert.1

What we were trying to establish2

on the table, Madam Chair, is that the CMD had not3

addressed a particular category, but if you look4

at the right-hand column we do show our status,5

and there are several of them that were6

"conditional" at the time that have now been7

upgraded to "acceptable" by the CNSC staff.8

So if you look at the, for9

instance, Section 4.135, it shows that that is now10

complete. 4.22 shows that it's acceptable; 4.2311

shows that it's acceptable.12

So you have to look at the far13

right to get the total change since the last time14

it was rated as "conditionally acceptable."15

THE CHAIRPERSON: Is there16

anything further to add, Mr. Nixon?17

MR. NIXON: No. I guess that's18

what I was going to say. Four more of the areas19

have progressed to either acceptable or been20

closed by the CNSC. We have several others where21

we have submitted all the required documentation. 22

CNSC staff are currently reviewing that.23

THE CHAIRPERSON: Right.24

MR. NIXON: The rest, in general25

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terms I'm satisfied that we are making progress on1

all of these areas, and certainly we report on a2

regular basis to the site CNSC staff on these.3

THE CHAIRPERSON: Thank you very4

much.5

My last question is with regards6

to, I suppose, what I would call almost the Plan7

C. You've noted that the Commission Members have8

asked a number of questions about financial9

guarantees. And just perhaps to provide some10

framework for this, although the Commission's11

interest is health and safety, we are very12

interested in the abilities of the organizations13

to be able to operate the facilities safely, but14

also in a number of contingencies and15

possibilities, as remote as they may be, or as16

possible as they may be, that there is sufficient17

financial backing to ensure that the plant is18

handled in a healthful and safe manner, and that's19

what we are doing, rather than getting into the20

financial areas and any other context.21

In that regard, I guess one of the22

questions I would have is: We have some financial23

undertakings by British Energy, by Cameco as well24

in this regard. My question I suppose is: Is25

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there another level of security offered through1

OPG through the leasing for all those other first2

areas that didn't work in providing the financial3

security necessary? What is OPG's position in this4

with regards to the lease arrangements and other5

areas?6

MR. PRESTON: Well, OPG's position7

is that we clearly recognize we have the8

responsibility with respect to the decommissioning9

side of it.10

With respect to the operating11

aspects of it, that's for Bruce Power and its12

shareholders to sort out. In the event that there13

was some difficulty, it's possible that we might14

reinherit the facilities, but this is intended to15

be a transaction where Bruce Power will satisfy16

the CNSC that they can meet the ongoing operating17

aspects of it.18

We obviously have an interest in19

making sure that that's successful, and the lease20

provides for a variety of ways in which we will21

continue to monitor the facility, but our22

financial position stops with the decommissioning23

fund.24

THE CHAIRPERSON: Thank you. I25

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would just ask the Commission Members if there are1

further questions before we end this part of the2

hearing?3

Ms MacLachan?4

MEMBER MacLACHLAN: This is a5

question to staff:6

In the materials as I have7

reviewed them this is an application for a licence8

for Bruce Power, but it's also our understanding9

that OPG is responsible for decommissioning.10

What will the status be going11

forward? In the event the Commission approves the12

application by Bruce Power, what will the status13

of the OPG licences be such that they retain14

responsibility for decommissioning, going forward15

into the future for the next 10, 20, 30 years,16

however long their lease arrangement might last?17

MR. BLYTH: I'll ask Mr. Elder to18

address that question.19

MR. ELDER: Under our Act, it is20

the licensee who is responsible for providing a21

financial guarantee for decommissioning. What we22

will expect to happen in this case is that Bruce23

Power will provide a financial guarantee through24

Ontario Power Generation so that the actual25

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guarantee mechanism will be from Ontario Power1

Generation but it will be incorporated into Bruce2

Power's licence. The condition of maintaining3

that licence, that guarantee must be maintained in4

place.5

I'll give you an update right now6

where we are on those financial guarantees. 7

Ontario Power Generation has submitted detailed8

preliminary decommissioning plans. These have9

been reviewed and we are in the process of giving10

our comments back to Ontario Power Generation on11

that.12

Once those have been13

dispositioned, we'll be in a position to talk14

about the actual amounts of the financial15

guarantee and the mechanism of the financial16

guarantee.17

Once we are satisfied that, from18

our point of view, that there is a proper19

financial guarantee we will be coming to the20

Commission to amend the licence to include that21

guarantee into OPG's current licence and into22

Bruce Power's licence. So that Bruce Power's23

responsibility will be to make sure that that24

financial guarantee remains in place.25

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THE CHAIRPERSON: Any other1

questions at this time?2

I think it might be best to take a3

break at this time before we go on to the4

intervenors' presentations. I would like to thank5

the Applicants and the staff at this time.6

I would propose that those people7

not leave the hearing, that they stay, because my8

proposal would be at the end of the hearing that9

we may have another sort of overview or round of10

questions as well, so we would like you to stay.11

The intervenor area will become12

for other intervenors as well, but the other two13

areas will remain the same. So, just to make that14

clear.15

We are cognizant that the people16

in this room have to go into town for lunch so17

that my normal very stringent one-hour break will18

be extended for an hour and a half for lunch in19

order that people will do that.20

However, I would ask you to21

respect the fact that I do intend to start22

promptly. So I have now that it is 12:10 p.m.,23

and so that we will be starting at 1:40 p.m.24

Sorry?25

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My addition was being questioned1

here. Which means that we will be back here in2

this room. If people are not back in the room, I3

intend to start because I really do intend to have4

this Hearing today completed. I realize that5

there's going to be some stress, but please do6

your best to get back here on time.7

Thank you very much.8

--- Luncheon recess taken at 12:10 p.m.9

--- On resuming at 1:40 p.m.10

THE CHAIRPERSON: Ladies and11

gentlemen, if I could ask you to please take your12

seats.13

Just a reminder of the program for14

this afternoon. We will be having oral15

presentations by the Intervenors. Each16

presentation will be followed by a question period17

from the Commission.18

Subsequent to that we will have19

consideration of the written submissions and20

questions or comments from the Commission Members,21

and we will be having a further overview kind of22

questioning at the end of the day.23

I would just like to make some24

opening remarks with regards to the oral25

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presentations.1

We do have a guideline of 102

minutes per oral intervention. We do have a large3

number today, so I would ask for the cooperation4

of those people making the oral submissions in5

keeping to that guideline.6

If necessary, I will be reminding7

you that you're near the end of the time or you8

have exceeded your time, and I would like to9

respect the oral Intervenors, but at the same time10

it's my responsibility to keep the time management11

as well in there. So I thank you for your12

consideration in that regard.13

Without further ado then, I would14

like to turn to our first oral presentation. It's15

the oral presentation by the Municipality of16

Kincardine as outlined in CMD Document 01-H6.3 and17

I believe the Mayor is with us today.18

19

01-H6.320

Oral Presentation by the Municipality of21

Kincardine22

MAYOR L. KRAEMER: Is that loud23

enough?24

Good afternoon, ladies and25

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gentlemen.1

Bonjour, messieurs et mesdames.2

I wish to introduce myself. I am3

Larry Kraemer, the Mayor of the Nuclear Host4

Community of Kincardine. The entire community is5

pleased that the Canadian Nuclear Safety6

Commission has chosen Kincardine as its location7

for Bruce Power Day Two Hearings. This will allow8

the Commission to truly understand why in fact9

Kincardine and area is truly a Nuclear Community.10

Our community support is based on11

five key platforms: Education, dialogue, safety,12

integrity and community involvement. In order for13

me to explain these five key areas, I wish to note14

both the current practice of OPG and that of Bruce15

Power over the past nine months. I'll start with16

"education."17

With respect to education: The18

community clearly understands the need for an19

educated skilled work force that can handle the20

responsibilities of safely operating a Nuclear21

Power Plant under the auspices of the Nuclear22

Safety Commission. Currently Bruce Power has23

expressed a desire to see an expanded nuclear24

training program which will handle the25

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demographics of our current work force and provide1

the youth of our community with good educational2

opportunities.3

With regards to this objective, we4

are pleased to understand that OPG, Bruce Power5

has entered into discussions with the local6

community college with a desire to retool the7

existing marine engineering program to be more8

industry specific for the nuclear industry. To9

that end, the municipality has written letters to10

the appropriate government bodies supporting this11

initiative.12

Secondly, dialogue: Dialogue and13

communication represent the next key to community14

support. OPG, formerly Ontario Hydro, has a long15

history of daily, weekly and monthly16

communications with the community and we have been17

greatly encouraged by Bruce Power's communications18

which are continuing with this tradition. For19

example, the Nuclear Liaison Committee which is20

composed of representatives from the municipality,21

OPG and Bruce Power, meet on a monthly basis to22

discuss important issues such as plant safety,23

unit performance and community issues.24

On a daily or weekly time line, I25

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can pick up the phone, I can contact Robert Nixon,1

Duncan Hawthorne or Dr. Jeffrey and get a rapid2

response to my concerns and, most importantly, a3

commitment to the due diligence required to4

resolve these concerns in a timely manner.5

Next and most important, community6

concerns: The Mayor and Council must address with7

a hundred per cent certainty there's a safe8

operation of nuclear plants prior to any concerns9

of commercial profitability. Kincardine places a10

high regard for the role of the Canadian Nuclear11

Safety Commission in both its roles as Licensing12

Regulator as well as that of on-site Regulatory13

Control Inspection Team.14

In all of our discussions with OPG15

past and with Bruce Power future, full disclosure16

of safety concerns and pro-active measures have17

and will take the top priority of the community. 18

We have been pleased to see the steady performance19

improvement of the Bruce plant as it participates20

in the WANO Audit Program. These high standards21

and constant striving for improvement to safety22

and performance standards allow us to feel both23

confident and safe living in our community.24

Bruce Power has been pro-active in25

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its approach by its participation in the Bruce1

2000 Nuclear Safety Exercise and its involvement2

in some financial support of our ongoing Emergency3

Planning Program, in particular, its participation4

in our Municipal Operations Centre.5

Bruce Power has met with the6

municipality, and its business-like approach has7

given the community confidence that it can handle8

the technical requirements of operating a CANDU9

Nuclear Station in a safe and effective manner.10

As with all of our organizations,11

our most common and important element is people,12

and we appreciate Bruce Power's modern view with13

respect to its employee/employer relationship as14

proven by its partnership with both the Power15

Workers' Union, the Society of Energy16

Professionals and Cameco in the Bruce project. We17

believe Bruce Power is on target in its belief to18

look to its employees for suggestions and19

solutions to any problems within the company.20

The next key indicator for21

community support is integrity. It's very22

important, in small town life, due to the fact23

that nuclear issues must be addressed in an open24

and honest fashion, allowing all parties to have25

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input into identified problems and to resolve them1

with jointly-created solutions. Integrity is a2

value that is learned by both experience and in3

association with a new community partner.4

Specific examples of this trade5

have emerged through the open communication6

process that Bruce Power has had with its new7

employees and with the community. Open houses8

have allowed us the opportunity of getting to know9

Bruce Power, and concepts regarding technical10

challenges for restarting Bruce A and other key11

concerns have been addressed in an open and honest12

fashion, thus providing corporate integrity for13

all to view and adopt as a corporate position.14

In keeping with the spirit of open15

and transparent communications, Kincardine will16

want to understand and play a role in determining17

the future of nuclear waste disposal plants for18

the Bruce. Kincardine has always supported19

responsible efforts to dispose of waste generated20

by the Bruce Generating facilities, but it has21

some concerns and reservations about receiving22

waste from other Ontario communities.23

The Municipality of Kincardine has24

direct experience with Bruce Power's response to25

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our concerns regarding the future viability of the1

Bruce Energy Centre of which the community is a2

key stakeholder along with industry and OPG/Bruce3

Power.4

The Bruce Energy Centre is an5

energy concept park that relies on the6

availability of nuclear produced steam supply in7

order to foster alternative environment-friendly8

economic growth. This symbiotic relationship9

between industry, community and the nuclear10

facility in Kincardine represents a spirit of11

cooperation that is essential to community support12

for a nuclear installation. Kincardine has13

embraced nuclear power development while at the14

same time trying to diversify our local economy15

through an innovative energy park that clearly16

highlights the economic advantages of being a17

nuclear community.18

The Operator of the Bruce has19

ongoing obligations with respect to the supply and20

pricing of steam for the Bruce Energy Centre. As21

a result of the lay-up of the Bruce A Generating22

Station, these obligations have been met through23

temporary contingent arrangements. With the24

prospect of the recommissioning of Bruce A,25

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Kincardine wants to ensure that the long-term1

relationship between Kincardine, the community and2

the Nuclear Facility Operator for the long-term3

supply and pricing of steam is carefully4

considered by the Commission.5

For our part, we have commissioned6

KPMG to do a technical report outlining the7

opportunities that will ensure long-term cost8

advantage opportunities for the Bruce Energy9

Centre with respect to its umbilical cord10

relationship with the Bruce facility. Therefore,11

Kincardine is seeking Bruce Power's support for12

the KPMG technical solutions as a cornerstone to13

our community support for the present licence14

application.15

It is with great pleasure that we16

note that the former Vice-President of OPG, Robert17

Nixon, will be a Director on the Bruce Power team. 18

Mr. Nixon's appointment provides a critical19

continuity factor with the community. We were20

also pleased to learn that Duncan Hawthorne will21

become Chief Executive Officer of Bruce Power22

effective May 1st. Mr. Hawthorne is known and23

well respected within the community for his role24

with Bruce Power in the acquisition of Bruce25

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Generating Stations A and B.1

The community is also pleased with2

the strong participation of Andrew Johnson,3

Vice-President of Power Marketing on our local4

Economic Development Committee. His presence is5

intended to help the community diversify our6

economic development activities through safe7

alternate energy opportunities with what8

assistance Bruce Power may offer.9

Lastly, community support. The10

last but clearly one of our most important11

platforms is seeing Bruce Power become an integral12

part of our community. We have been very pleased13

to see Bruce Power site its corporate offices in14

the Municipality of Kincardine, and most15

importantly see its people buy homes and fully16

integrate into the social fabric of Kincardine and17

area. We feel that this strong commitment to18

Kincardine by Bruce Power will achieve a sense of19

belonging and bonds to the community that will20

enhance an excellent track record as previously21

achieved by OPG, formerly Ontario Hydro.22

If I may be succinct, I wish to23

clearly state that the Municipality of Kincardine24

along with its Elected Representatives is fully25

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supportive of Bruce Power's licensing application,1

including its current relicensing plans for Bruce2

B and that of potential plans to reconsider the3

restart of Bruce A, Units 3 and 4, and in the long4

term hopefully 1 and 2.5

Herein lies the future of our6

community. Through continued local dialogue with7

Bruce Power, OPG and the Canadian Nuclear Safety8

Commission, we hope to continue forward with a9

solid foundation for safe, well-planned10

development.11

THE CHAIRPERSON: Thank you very12

much, Mr. Mayor.13

And now the floor will be open to14

questions from the Commission Members.15

Dr. Giroux.16

MEMBER GIROUX: Yes. Thank you. 17

You have a strong statement in your presentation18

which you read saying that the entire community is19

extremely pleased that the -- I'm sorry. You have20

a strong support, and I'm not quoting the right21

sentence, about the elected representatives being22

in strong support of the application and what23

Bruce Power is planning to do. We will be hearing24

some contrary representations later on today.25

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My question is: What is the basis1

on which you establish your strong support, and2

specifically, has there been an election recently3

and has the presence of nuclear power up here in4

Bruce and Kincardine, has this been an issue5

during the election?6

MAYOR L. KRAEMER: Yes, I would7

say in a community like this it's always an issue. 8

The BNPD employs at least 30 per cent of our work9

force and has an impact on all aspects of our10

lives. There's barely a family, including my own,11

that doesn't have at least one member involved12

with the industry in one way or the other, and13

they - I shouldn't say "they" - but the generation14

of energy in this community goes right back, it's15

the heart of the very first CANDU commercial plant16

in the world and, of course, in Canada. So it17

goes back a long way and, you know, it's key to18

just about everything we do. They are our largest19

employer.20

I'm not sure if that answers your21

question correctly or not. If you are asking, was22

it part of the thing, part of the election, there23

were certain issues around it, yes.24

MEMBER GIROUX: Well, let's say25

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more specifically. I don't want details, but were1

the candidates, for instance, openly supporting2

nuclear power and others openly being opinionated3

against and making that an important part of the4

platform?5

MAYOR L. KRAEMER: I think the6

issues during the election in this local municipal7

election, which took place, November 13 was the8

final day for our municipal election, and the9

issues that surrounded the election, I would say10

the key issues were the Bruce Energy Centre and11

the future there around it. It's seen as a very12

important industry to provide secondary13

employment.14

As I'm sure many of you are aware15

in Canada, being a one-industry town, we always16

like to encourage all aspects of diversification17

we can, and I think the diversification side of18

the election had more to do with it than any19

direct - what's the word I'm looking for - I guess20

"controversy" relating to whether or not Bruce21

Power was going to be the licensee.22

From a community issue, if I may23

be allowed to speak in broader terms, it's seen by24

most people of our community - and I guess it's25

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hard to say the "entire" community - but by most1

people of our community it's seen as a distinct2

advantage that they will be officed here and that3

the communications and interaction and involvement4

and decision-making process will be very much5

streamlined and enhanced by being able to be made6

right at the point of control, and right within7

the community. That is seen as no small advantage8

by any stretch of the imagination.9

It didn't really play a factor in10

the election, I wouldn't say. I would say it was11

just more a general acceptance, to speak in broad12

terms, if that helps with your question.13

MEMBER GIROUX: Thank you.14

THE CHAIRPERSON: Mr. Graham.15

MEMBER GRAHAM: Two questions I16

have. The first one, you mention in your17

submission about the re-tooling of the community18

college. Has this proceeded? Has this happened19

or is this just a recommendation that you are20

having?21

MAYOR L. KRAEMER: In one aspect22

it has, but the specific one that I'm talking23

about I don't believe has. I think this week24

events have caught up that there has been an25

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announcement or there's about to be an1

announcement that Bruce Power will be sighting a2

school at the plant. Am I right on that, or is3

there -- a campus? Maybe they could clear that4

one up.5

MR. JEFFREY: Yes. Well, the6

announcement - the issue I referred to earlier in7

the Kincardine News that we are developing a very8

good relationship with Georgian College in terms9

of training people to come here and work in the10

plant, and we are aspiring that a lot of that11

intake would come from people in the locality.12

So we are making progress, and we13

hope that the training of these people at Georgian14

College will commence this fall. We're making15

good progress in that.16

MAYOR L. KRAEMER: The point I was17

referring to though was a separate issue to that18

one, which was the Marine Engineering Program at19

Georgian Campus in Owen Sound was in trouble and20

it was seen as a key source of skilled personnel21

for the industry, and we were urging the Ontario22

Government to either continue with that program or23

use that as a base expertise to expand it to a24

more nuclear specific program, and I don't believe25

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there's been word on that yet. At least I haven't1

seen it.2

MR. JEFFREY: We are making good3

progress. I mean, it's not going nearly as fast4

as we would like it to go, but we hope there would5

be instances going into that Marine Engineering6

course with modules to be added that are7

appropriate to nuclear expertise.8

THE CHAIRPERSON: Ms MacLachlan.9

MEMBER MacLACHLAN: You made10

reference to the Bruce Energy Centre.11

MAYOR L. KRAEMER: Mm-hmm.12

MEMBER MacLACHLAN: Who owns that13

centre?14

MAYOR L. KRAEMER: It's owned by15

IEDC, Integrated Energy Development I believe is16

the primary developer and there are six industries17

there. They have had a long-term arrangement18

formerly with Ontario Hydro which was supported by19

-- started by the Ontario government.20

There's a steam-line which runs21

from Generating Station A that provided extremely22

competitive steam in the past to the Energy23

Centre, but with the lay-up of A that was no24

longer available and it's been supplied by an25

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oil-fired package boiler since the lay-up.1

MEMBER MacLACHLAN: And what is2

the role of that Centre?3

MAYOR L. KRAEMER: The role of the4

Centre?5

MEMBER MacLACHLAN: Yes.6

MAYOR L. KRAEMER: Of the Energy7

Centre?8

MEMBER MacLACHLAN: Yes.9

MAYOR L. KRAEMER: It's private10

enterprise, its an initiative to diversify the11

energy industry. The goal has been to attract12

energy-intensive industry to the area around the13

plant. It has I believe seven or eight acres14

under glass with a greenhouse that provides15

tomatoes in the off-season and it's been a very16

good thing. And there's a juicing plant that17

provides a lot of processed tomatoes as well as18

make many other specialized offerings.19

There's an alfalfa cubing plant20

which processes in the neighbourhood of I believe21

around 40,000 acres of alfalfa every year.22

There's a plastics extrusion23

facility called Biex, has been St. Lawrence24

Technologies and an alcohol plant. Commercial25

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Alcohol has a plant there where they provide fuel1

alcohols as well as high grade alcohol for the2

distillation market.3

MEMBER MacLACHLAN: Who's paying4

for the energy since the steam is no longer5

available from Bruce?6

MAYOR L. KRAEMER: Who's paying7

for it?8

MEMBER MacLACHLAN: Mm-hmm.9

MAYOR L. KRAEMER: The industries10

pay for it, but it cannot be produced at the cost11

that it was formerly produced at. Bruce Power has12

taken over, or is proposing to take over the13

contracts as part of the transfer, I understand.14

MEMBER MacLACHLAN: So then the15

interest of the Town is ensuring that that Centre16

is able to continue on in the future for17

diversification of the economy?18

MAYOR L. KRAEMER: We would very19

much like to see it. It's at about one-tenth the20

size of what it's proposed to be at, and we would21

very much like to see it grow and very much like22

to see it add diversification to our community as23

well as provide extended support for CANDU24

technologies.25

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It's been supported by AECL in1

various forms, verbally as well as in some of this2

literature as a promotional source. We feel it's3

an excellent initiative.4

MEMBER MacLACHLAN: Is the Centre5

subsidized by government? You say it's privately6

owned by IEDC?7

MAYOR L. KRAEMER: It's not if the8

sources of energy are produced for it in the9

manner that it was intended. However, if they're10

produced by fossil fuel sources, then yes it will11

have to be. So therein lies the challenge.12

THE CHAIRPERSON: Thank you very13

much. We will now move to the oral presentation14

by the Power Workers' Union as outlined in CMD15

Document 01-H6.4, and I believe President16

MAcKinnon is with us today.17

18

01-H6.419

Oral Presentation by the Power Workers' Union20

MR. MacKINNON: Thank you.21

Madam President, Members of the22

CNSC, my name is Don MacKinnon and I am President23

of the Power Workers' Union. With me today are24

Terry Pigeau, Vice-President Sector One; Harold25

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Hergott, our PWU Nuclear Regulatory Coordinator on1

the Bruce Site; Dennis Fry, Sector One Bruce Site2

Representative and PWU nominee to the Bruce Power3

Inc. Board of Directors. As well as Dave Shier,4

our Sector One Nuclear Staff Officer.5

We welcome this opportunity to6

appear before you and present our support for7

Bruce Power's acquisition of an operating licence8

for the Bruce Site.9

The Power Workers' Union10

represents some 2,200 members on the site. It is11

also a limited partner in the new company.12

Bruce Power. Our presentation to13

you will consist of identifying the needs of our14

members working at a nuclear facility, our view of15

the Bruce Power licence application, informing you16

about the state of labour relations on the site,17

and finally our view and commitments around the18

path ahead.19

Let me now be specific about our20

members' priorities. The most basic needs of our21

members are health and safety for them, their22

families and their communities, long-term23

security, and the need for work that both utilizes24

and provides for further development of their25

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skills.1

In order for us to ensure that our2

members' needs are met, we have to ensure that the3

business is safe and successful. The most4

profitable nuclear stations are the safest. In5

other words, safety and production are6

complementary. Business excellence is achieved7

through people excellence. Achieving this8

excellence increases the value of the business,9

thereby providing a higher level of security for10

the employees. Therefore, the very things that11

our members need are exactly what will make Bruce12

Power Incorporated successful.13

MR. PIGEAU: I would like to now14

talk about the PW review of the Bruce Power15

filings around both the objective and scope.16

The PWU obtained all of Bruce17

Power's operating licence filings. They were made18

quite available to us immediately upon request. 19

We have examined them all to assess any impact on20

our members' needs of health and safety and their21

long-term security. We are also interested in22

Bruce Power's position regarding previous23

commitments that have been made to CNSC by OPG.24

It's our position regarding these25

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filings that the PW supports the Bruce Power1

operating licence application in full. We have2

found and conclude that CNSC and IIP commitments3

are to be honoured. There will be no physical4

changes to operations. Day-to-day operations will5

remain unchanged. Safety and the environment will6

not be compromised.7

Two further points: In addition8

we see great potential in having local lines of9

accountability, as has been mentioned numerous10

times today so far, and ownership along with - and11

this is quotes from the Day One Hearing - "High12

Level On-Site and Accountability with CNSC13

Oversight."14

One final point on this: The15

Bruce Power Safety Advisory Supervisory Committee16

that will report directly to the Board of17

Directors is seen as a real strength for the PWU18

and will have direct dialogue with that group.19

MR. FRY: Madam Chair,20

Commissioners, I would like to go over the Bruce21

Power/PW labour relationship.22

Our experiences to date have all23

been based on complete openness between the24

parties. This has led to a greater understanding25

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of both people and business needs setting the1

stage for a very productive relationship. Our2

presentation will now focus on some current3

efforts.4

From the very beginning Bruce5

Power clearly demonstrated its intent to work with6

this Union. The Bruce Site lease arrangement with7

Ontario Power Generation was contingent on Bruce8

Power getting a Memorandum of Understanding with9

each of the Unions. We will discuss the10

Memorandum of Understanding in more detail later11

in our presentation.12

Having a PW member on the Board of13

Directors provides an opportunity for us to have a14

high level access point to give input and gain15

much more understanding of the business issues. 16

When we made known our intention to intervene on17

the Bruce Power application, all submissions were18

made readily available to us.19

We've had very positive20

experiences to date in joint efforts with Bruce21

Power. Examples include: Holding a joint meeting22

with CNSC staff on human performance issues,23

implementing eight of the elements of the24

international system for loss control, planning25

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joint health and safety committees effectiveness1

improvements.2

As we mentioned earlier in our3

presentation, the Memorandum of Understanding4

signed by Bruce Power and the Power Workers' Union5

warrants more discussion. It provides the road6

map for the path forward. The MOU is a very7

innovative document that both parties are proud8

of. It is the foundation for a new type of9

Union/management relationship. It commits the10

parties to certain behaviours in working together11

cooperatively. It also provides for both12

employment security for our members and labour13

stability for the business (i.e. no distractions).14

In addition, a joint working party15

of PWU and management has been formed to deal with16

labour relations issues, and a tripartite17

(PWU/society and Bruce Power) business improvement18

group is developing its charter and objectives.19

In the Memorandum of20

Understanding, the parties also commit to making21

improvements to both plant and people performance.22

Some examples are: establishing23

fix-it now multi-disciplined work teams; working24

to improve staff structure; developing new labour25

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contracts; and committing to work collaboratively1

on barriers to getting work done and other2

jurisdictional issues.3

The PWU concludes that everything4

is ready for the transition of the Bruce Site5

operating licence to Bruce Power. The members on6

the site are eagerly looking forward to it. All7

of their lower level needs of safety and security8

are taken care of and they are keen to be involved9

in working towards their own and the new company's10

higher level needs.11

Many of our members who have12

chosen to remain on the site are currently helping13

Bruce B improve its performance. They understand14

any decision on a Bruce A restart is contingent on15

Bruce B performance improvements. They look16

forward to that task and are hoping that the17

business case for Bruce A is positive.18

The slide above depicts the19

elements that come together to form a critical20

mass to performance improvement. Our members know21

that the status quo could be improved on, they22

have a vision of how rewarding this new workplace23

could be, and they believe that the culture of24

involvement that Bruce Power will be creating and25

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has created will get us there.1

Thank you very much.2

THE CHAIRPERSON: Thank you. The3

floor is now open for questions from the4

Commission Members.5

Mr. Graham.6

MEMBER GRAHAM: The question I7

have is with regard to the part of your8

presentation with the path ahead, and you have a9

list of I guess priorities that you -- I believe10

it's on page 11. I'm sorry, it's page 10.11

My question I guess is that some12

of these objectives certainly are going to require13

some financial involvement, some financial14

investment. Also your Unions have become a15

partner in this agreement, I believe, as far as a16

financial partner in the agreement of Bruce Power;17

is that correct?18

MR. HERGOTT: That's correct.19

MEMBER GRAHAM: In that agreement20

that you have between Bruce Power and yourselves,21

is there anything in that agreement that makes22

sure that the profits of this plant will stay23

within the country and not go to the parent24

company or so on, that the money stays as a25

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reinvestment? Is that part of the MOU?1

MR. HERGOTT: I will turn the2

equity investment question over to Don.3

MR. MacKINNON: Yes. The4

agreement we have ensures that any moneys that we5

attain through this agreement would stay within6

the Power Workers' framework and, therefore, in7

the Province of Ontario, in Canada.8

MEMBER GRAHAM: That's just your9

part which is three or four per cent? I forget10

the exact amount.11

MR. MacKINNON: We have a two per12

cent equity share with an option of two more in13

the future.14

MEMBER GRAHAM: So four per cent. 15

So four per cent of the profits have to stay in16

Ontario, but there's nothing in the MOU that the17

entire profits would have to stay and cannot be18

removed out of the country, and so on, to the19

parent company or to the U.S. and so on?20

MR. MacKINNON: There is nothing21

within the agreements we have with Bruce Power22

that deal with that. That question would have to23

be directed to Bruce Power, what they do with24

their share.25

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MEMBER GRAHAM: Okay. Also, this1

morning in the questioning we heard that down the2

road - two years, three years - when Bruce A, if3

it gets going and so on, the labour force would be4

approximately in both plants operating5

considerably less per kilowatt hour or per unit6

cost, I guess, than what it is today.7

Is that in concurrence with your8

figures also and the way you see it?9

MR. MacKINNON: Well, based on10

what we saw or what you heard this morning, there11

are staff still at the Bruce Site that would have12

left if in fact they had continued to be13

attributed to Bruce B.14

MEMBER GRAHAM: Yes.15

MR. MacKINNON: So if units do16

start up on the A Site, there will be staff17

readily available to go there.18

We believe that, and we've seen19

this demonstrated elsewhere, that Bruce Power's20

commitment not to force people to leave the site21

is in fact true. And what numbers we can value to22

attrition we don't know at this time.23

THE CHAIRPERSON: Dr. Giroux.24

MEMBER GIROUX: Yes, thank you. A25

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comment and a question.1

I think this is a very significant2

presentation that we hear, and in the years in3

which I have sat here as a Commission Member and4

Board Member, that's one of the most optimistic5

presentations I have heard and I hope this is6

going to be carried forward. I wanted to stress7

that.8

I have two questions. The first9

one is very simple: Is there a duration in the10

Memorandum of Understanding? Is there a time11

limit on this or is it open?12

MR. MacKINNON: The MOU is part of13

our or will become part of our current Collective14

Agreement which will time out in April of 2002.15

MEMBER GIROUX: Which is a year16

from now?17

MR. MacKINNON: Yes.18

MEMBER GIROUX: Would it be a19

correct assumption to assume that you would be20

planning to carry it forward into the next21

agreement?22

MR. HERGOTT: Part of the MOU23

calls for us to begin single table negotiations24

and we'll certainly be doing that prior to the25

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timing out of the current agreement under the1

normal bargaining process, and it will certainly2

be our intent to carry this relationship and3

hopefully enhance this relationship forward4

through the bargaining process.5

MEMBER GIROUX: Because we would6

be looking for a two-year duration for the7

licence.8

MR. HERGOTT: Yes.9

MEMBER GIROUX: Could you be more10

specific in terms of the MOU? You have very11

interesting words in your presentation about12

labour peace and no distractions. Do I translate13

this correctly into "no strikes" and "no14

grievance," and how else can this be translated?15

MR. MacKINNON: I think the very16

fact that we were able to negotiate an MOU like17

that in the middle of a term of a collective18

agreement with OPG where OPG in fact was the19

Owner/operator is significant, that the members20

here ratified that overwhelmingly, and it has new21

things in it that they hadn't seen before. There22

is flexibility built into that MOU that weren't23

previously there.24

I think it goes a long way to25

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demonstrate the Union's commitment and the1

membership commitment to working with the new2

owners to, in fact, have labour stability, labour3

peace and a productive environment.4

MEMBER GIROUX: Thank you.5

THE CHAIRPERSON: Thank you very6

much. I would ask that the people in the first7

two sets of Intervenors, if you could let the next8

group come forward? I like to see people right in9

front of me.10

MAYOR L. KRAEMER: Thank you.11

THE CHAIRPERSON: Thanks. We're12

adapting to facilities as we go along here.13

The next presentation is by the14

South Bruce Impact Advisory Committee and this is15

outlined in CMD Document 01-H6.5, and we have the16

Chair with us today.17

18

01-H6.519

Oral Presentation by the South Bruce Impact20

Advisory Committee21

MR. RIBEY: Thank you, Madam22

Chair, Members of the Canadian Nuclear Safety23

Commission. Perhaps I should introduce myself24

first. I'm Howard Ribey, I am a member of Council25

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for the Municipality of Kincardine. I am Chairman1

of the Impact Advisory Committee and I was the2

former Reeve of Bruce Township which was the host3

of the BNPD before amalgamation.4

It is my pleasure on behalf of the5

South Bruce Impact Advisory Committee to welcome6

you to the Bruce and to show our support for the7

application by Bruce Power for a licence to8

operate the Bruce A and the Bruce B Nuclear9

Generating Stations.10

We understand that Ontario Power11

Generation licences to operate cannot be12

transferred and that new licences to Bruce Power13

are required under the Nuclear Safety and Control14

Act.15

The South Bruce Impact Advisory16

Committee is a committee made up of elected17

representatives from the municipalities of18

Kincardine, Saugeen Shores, Arran-Elderslie,19

Huron-Kinloss and the County of Bruce. As well20

there is representation from Bruce Community21

Development Corporation and Ontario Power22

Generation. Bruce Power will also become a voting23

member when your Board approves the operating24

licence for the Bruce Site.25

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The IAC meets monthly to review1

operations and conditions as well as concerns2

relevant to the operations of the Bruce Nuclear3

Power Development Site. This is an excellent4

format for elected personnel to be informed of the5

changes in employment numbers, unit shutdowns,6

waste management, environmental issues and any7

other issues including licence applications which8

we are dealing with today. We work closely with9

OPG and in the past 10 months with Bruce Power to10

ensure a healthy, safe and viable environment for11

our community.12

We have reviewed the document13

provided by your staff and the transcript of the14

meeting of February 8, 2001 at which your Board15

gave its initial consideration to this16

application, and we offer the following comment.17

Mr. Jeffrey in his oral18

presentation referred to Bruce Power's commitment19

"Safety First." This is fundamental to our success20

and is essential to our long-term business goals. 21

In a later statement he comments: "We have found22

that the Bruce Site has highly qualified staff and23

Labour Unions that want this business to be a24

success."25

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The IAC has always stressed that1

safety must be the initial consideration and agree2

that the BNPD staff can and will support Bruce3

Power in its commitment to make the site a4

world-class facility.5

In Mr. Hawthorne's presentation he6

explained the responsibility of the Safety7

Supervisory Committee chaired by an independent8

member of Bruce Power Board and the strategy to9

improve the safety culture by implementing the10

International Safety Rating Systems with progress11

being measured by and independent12

internal/external auditor.13

We feel this is an excellent14

approach to safety and would be pleased if updates15

on these reports were made available to the IAC so16

that progress could be monitored at our committee17

meetings.18

In the CNSC comments, it was19

gratifying to read that the application provided20

all the information required by the regulations21

associated with Nuclear Safety and Control Act for22

an operating licence for a class 1A facility and23

that the CNSC staff reviewed this material with24

the focus on nuclear safety aspects.25

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They also commented on the1

approach Bruce Power intended to take with the2

Ontario Power Generation ongoing improvement3

program by their intention to retain the4

organization, staff programs, policies and5

procedures for the Bruce Site and that CNSC staff6

reviewed the changes Bruce Power planned to make7

and finds them acceptable.8

Your staff commented on the9

technical qualifications of Bruce Power, and we10

would agree that the experience of their11

operations in the United Kingdom and in the United12

States should be somewhat similar to operations13

with CANDU reactors. We feel that the retention14

of present staff, and with Ontario Power15

Generation's cooperation and support services that16

it is reasonable to expect a smooth transfer of17

operations.18

We would also agree that there is19

potential for longer term issues but feel that20

with Bruce Power's commitment for recruitment and21

training of new staff that these issues can and22

will be addressed.23

In regards to Bruce Power's24

financial qualifications, your staff has obviously25

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reviewed this issue and we were pleased with the1

recommendations in regard to their financial2

ability to maintain the station in a safe shutdown3

of all units for an extended period, should the4

need arise.5

We are pleased that the CNSC6

staff, through their due diligence, recommended to7

your Board the approval of the issuance of a Power8

Reactor Operating Licence to Bruce Power for Bruce9

A and B Nuclear Stations with an expiry date of10

October 31st, 2003. This is supported by the IAC11

and we are confident in saying that it would be12

supported by the community at large.13

Madam Chair and Members of the14

Board, the questions raised by your Board15

indicates to us that your commitment is to assure16

that Bruce Power can and will have the resources,17

be it financial, contractual or through personnel18

resources, be able to operate the BNPD in a safe19

and responsible manner. We feel that given the20

presentations on commitments by Bruce Power's21

executive staff and the Canadian Nuclear Safety22

Commission staff recommendations that this can be23

achieved.24

In regards to your own question,25

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Madam Chair, as to the consultation with the1

community, staff and public and their perception2

of the proposal, we would offer the following3

statements?4

Like all communities where nuclear5

facilities operate, the Bruce community does have6

those in our midst who continue to question and to7

resist explanations of the positive aspects of8

nuclear energy economically and environmentally9

for the benefit of mankind. However, please be10

assured that those of us who continue to support11

nuclear energy as a source of electrical12

generation are, by far, in the majority to those13

who oppose it.14

Because we are a relatively less15

populated area than other areas where nuclear16

operations exist, many neighbours, friends or17

relatives are employed at the BNPD. These18

employees can be some of the greatest ambassadors19

for this proposal. Many, many employees have20

indicated to their community their support of this21

proposal.22

Bruce Power and Ontario Power23

Generation have been very open to the host24

municipality, the IAC service groups in the urban25

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municipalities and the media in explaining the1

transition and whose responsibility it is with2

regards to the various aspects of the Agreement.3

And if I could just stray from my4

context for just one moment, I did table with5

Carmen Ellyson this morning an envelope that6

contained a number of press clippings of articles7

and editorials that you could review at your8

leisure really to see the support that the9

proposal has from our community.10

Bruce Power, since the initial11

announcement, has taken some very positive12

initiatives which we fully endorse.13

Number 1, they have stressed14

Safety First as their No. 1 driver; two, have15

established their head office in the host16

municipality; three, reaffirmed their commitment17

to retain present staff, shown commitment to18

recruit new employees and partnerships with19

colleges and universities for specialized20

training, have committed financial resources to21

the host municipality for emergency planning22

initiatives, and made financial contributions to23

various community projects, one of which is a24

Women's House of Bruce County.25

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Commitments such as these are an1

indication to the IAC that Bruce Power can and2

will be a responsible corporate citizen in our3

community. With the support and scrutiny by CNSC4

staff we are confident that this facility will5

continue to be operated in a safe and responsible6

manner.7

Madam Chair, Members of the CNSC8

Board, the IAC fully endorses the application of9

Bruce Power for an operating licence for Bruce A10

and B and respectfully requests that your Board11

give favourable consideration to this licence12

application.13

Thank you.14

THE CHAIRPERSON: Thank you very15

much. The floor is open for questions from the16

Commission Members.17

I just have a question with18

regards to the South Bruce Advisory Committee. 19

Could you tell me a little bit about yourselves.20

MR. RIBEY: Well, I indicated it21

is made up of elected representatives from the22

surrounding municipalities of the site really, and23

it has been an ongoing committee for a number of24

years really, and through it we do discuss a25

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varied number of issues pertaining to the1

operations of the site.2

THE CHAIRPERSON: Mainly economic,3

would that be --4

MR. RIBEY: Certainly economics is5

one of the issues. When they anticipate that6

there could be a reduction in employees, we would7

be one of the first parties that would be made8

aware of it really, so that those elected9

representatives don't get questioned on it on the10

street on issues like that really. It's a very11

worthwhile committee and it has worked well.12

THE CHAIRPERSON: I believe that13

that is the only question.14

Thank you very much.15

MR. RIBEY: Thank you.16

THE CHAIRPERSON: Our next oral17

presentation will be by Citizens for Renewable18

Energy as outlined in CMD Document 01-H6.6.19

And Mr. Kleinau is with us, I20

believe. Welcome to the Commission.21

22

01-H6.623

Oral Presentation by Citizens for Renewable Energy24

MR. KLEINAU: Thank you very much,25

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Madam Chair, and Members of the Commission, good1

afternoon.2

My name is Sigfried Kleinau,3

better known as Ziggy, and we thank you very much4

for the opportunity to make this presentation on5

behalf of the directors and over 1,000 members of6

the Citizens for Renewable Energy, a non-profit7

organization incorporated in Ontario in 1996. I8

would like to mention that we had a number of our9

members here for the morning session to show their10

support. Most of them unfortunately had to leave11

because of time constraints, they are very much --12

they have very heavy schedules, so just to take13

that into consideration.14

We have reviewed the Applicant's15

submission requesting the operating licence as16

well as CNSC's staff CMD 01-H6 and also numerous17

other relevant documentation, but we had a 33-page18

fax and following after that an 18-page fax less19

than 48 hours before this Hearing and we,20

unfortunately, are not able to comment on that,21

and I would like the Commission to take that into22

consideration.23

We strongly oppose the combined24

application for Bruce A and Bruce B as both plants25

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were previously separately assessed. The need for1

this is especially obvious now with Bruce A in a2

defueled guarantee shutdown state. Issues in both3

plants are so decisively different that separate4

Hearings are absolutely necessary to assess the5

status in all lof their complexities.6

Now, our submission was sent in at7

a fairly early date and we received a press8

release from Ontario Power Generation, British9

Energy about the joint venture to provide10

electricity from a wind farm, and we are certainly11

very appreciative of this move and hope that it's12

not just a public relation exercise and that they13

will follow up on even more of this kind of power14

that does not require any fuel, that does not15

pollute and that does not leave any waste. So we16

are certainly able to endorse that kind of a move.17

We fully agree with staff's18

findings that this Operating Licence Application19

is unprecedented especially with the applicant20

coming to Canada with no experience in operating21

CANDU Heavy Water Reactors, and also being just22

not an Owner/Operator but only a lessee operator. 23

That's another big argument in looking closely at24

this application here.25

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The other novelty is that the1

applicant will not own but only lease the nuclear2

plants and, therefore, not have any responsibility3

for the high level radioactive waste resulting4

from the operation, nor for the looming5

decommissioning of the reactors.6

As the applicant's parent company,7

British Energy, has no assets in Canada, financial8

liability has to be addressed. In our opinion the9

letters of financial guarantees are completely10

inadequate.11

Even staff qualify their finding12

uses phrases like "currently capable of fulfilling13

the provisions" and "the letters provide an14

adequate amount of operational financial assurance15

at the present time".16

The parent company is presently17

involved in a drastic expansion phase in the18

U.S.A., also they are reported to be having19

difficulties in the U.K. with aging reactors and20

falling electricity prices in a deregulated21

marketing environment.22

Because of these problems, the23

financial guarantees could vanish overnight. This24

would mean that the commitment regarding safety25

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upgrades, especially the fire protection program,1

the CAI issues and the completion of the OP, GIP2

projects would be in jeopardy.3

In their application submission4

CMD 01-H6.1, Bruce Power constantly mentions their5

safety and commitment but they never really define6

what they mean by "Safety First".7

Could it be that they want to keep8

their shareholders safe from financial losses? It9

almost gives that impression when we see under10

"Bruce Power Values," "Safety First." This is11

fundamental to our success and is essential to us12

achieving our long-term business goals." That's13

in quotes.14

In many references, safety and15

commercial performance are intimately combined. 16

With the Applicant preparing to sell into the17

upcoming deregulated competitive electricity18

market, these statements have an ominous ring and19

our suspicions would be well-founded.20

A little over a year ago the21

United Kingdom Nuclear Energy Regulator, the22

Nuclear Installation Inspectorate, released a23

scathing report on British Energy pointing to24

staff cutbacks affecting safe operation levels. 25

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They found remaining staff working unreal hours of1

overtime and that there was an over reliance on2

outside contractors who were not always familiar3

with nuclear operations.4

Going through the applicant's5

submission with all its safety assurances, we can6

not find a single reference to a nuclear emergency7

plan. The possibility of a nuclear accident of8

fire can never be discounted. A licence condition9

exists where a nuclear emergency plan has to be in10

place to be granted an operating licence.11

Even though we notice from the12

staff's report - that's the CNSC staff report -13

that there is one presently being reviewed by14

Emergency Measures Ontario, we find it significant15

that there was no mention of this important16

integral part of nuclear operation in Bruce17

Power's application.18

In CMD 01-H6 we find numerous19

references where staff addresses problem areas of20

improvements as well as short-term contractual21

arrangements. Their conclusion seems to be always22

that by monitoring and assessing progress by CNSC23

staff at the site, compliance with the licence can24

be guaranteed.25

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Just at the end of last year the1

Auditor General of Canada in his report pointed to2

critical shortcomings in CNSC's safety3

assessments. In 27.23 in his CNSC Audit and Power4

Reactor Regulation he recommends, and I quote:5

"The CNSC should implement a6

quantifiable rating of safety7

performance, taking into8

account the safety-related9

portion of other systems used10

in the industry, and should11

use this rating, along with a12

more rigorous and integrated13

risk assessment and other14

qualitative information, to15

systematically determine the16

level and type of regulatory17

efforts required."18

In regard to staff's ability to19

perform its inspection and monitoring tasks, he20

writes in 27.34:21

"The present vacancy rate22

(about 12 per cent overall, 823

per cent in power reactor24

regulation line) and the25

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lengthy periods of vacancies1

in technical positions have a2

significant impact in our3

view of the CNSC's ability to4

effectively inspect and5

regulate the nuclear industry6

despite management's efforts7

to reduce that impact."8

In light of these shortcomings and9

the ability to regulate the use of nuclear energy10

and materials to protect health, safety, security11

and the environment, and with the unproven ability12

of the Applicant, both financial and operational,13

we are highly concerned with this operating14

licence application.15

Now, in our presentation on the16

Bruce A licence renewal last year, we proposed an17

Independent Panel Hearing under the Canadian18

Environmental Assessment Act to assure that in the19

event of a sale or a lease of the facility the new20

owners or operators will (a) meet stringent21

conditions of safety and accountability to workers22

and the public; (b) provide proof that the aging23

components will be fully compliant with all codes24

and certificates applicable to safe operation. We25

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need to extend this request to the Bruce B1

operating licence application.2

As well, due to the numerous3

outstanding issues that need to be addressed, and4

I would like to introduce the Board to the5

employment issues for this part of the community6

to an article called "Generating Jobs," and it7

says here:8

"Wind power generates about9

five times more jobs than are10

required in nuclear or11

coal-fired plants and one12

wind turbine will reduce13

emissions by over 1,00014

tonnes of CO2 per year."15

And I would like to leave this16

with the Commission to have a look at it. It's17

done by a research fellow at the Australian18

Cooperative Research Centre for Renewable Energy,19

University of Murdoch in Australia and it applies20

absolutely to this continent, not just to21

Australia.22

And employees are getting23

retrained all the time. So we don't see any24

reason why instead of putting 320-million into25

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possibly reopening two reactors in the A section1

and instead putting it into this renewable energy2

effort.3

In conclusion, we respectfully ask4

the Commission to acknowledge the overwhelming5

public concern with the Bruce Power Licence6

Application and the ability of CNSC staff to7

perform proper inspection and monitoring tasks. 8

We request the withholding of an operating licence9

to Bruce Power under the NSC Act Subsection 24(4)10

until the wide-ranging issues covered in the11

Application are addressed through a fully12

independent Panel Environmental Assessment13

Hearing.14

Now, I still just want to put back15

this aspect here that the CNSC staff said this is16

a completely new type of licence that you are17

issuing because it's not an Owner/operator, it's a18

lease operator, and again, there are so many19

issues that have never come before the Board20

before, so I would hope that this would be taken21

into consideration.22

Thank you very much for this23

opportunity.24

THE CHAIRPERSON: Thank you very25

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much, and we would be very interested in making1

sure we have a copy of that information that you2

discussed.3

MR. KLEINAU: Right.4

THE CHAIRPERSON: The floor is now5

open for questions from the Members.6

Dr. Carty.7

MEMBER CARTY: Good afternoon, Mr.8

Kleinau.9

MR. KLEINAU: Good afternoon, Dr.10

Carty.11

MEMBER CARTY: You make mention in12

one of the first paragraphs of your letter about13

responsibility for high-level radioactive waste14

and looming decommissioning, and I was wondering15

if you are aware of the fact that in its written16

submission OPG has reconfirmed that it has the17

obligation to decommission the site and also18

responsibility for waste management?19

MR. KLEINAU: Yes, I'm quite aware20

of that. Of course, that again is part of the21

taxpayers' contribution to something that this22

lease operator is going to leave behind and where23

I guess the profits count and the waste is the24

taxpayers' consignment.25

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MEMBER CARTY: But I don't think1

OPG is really a public sector company anymore, is2

it?3

MR. KLEINAU: Well, it's very well4

known that they're certainly guaranteed their5

funding by the Ontario Government. And of course6

the decommissioning figures that they come up7

with, in our estimation, don't even come close8

because in some of the examples -- I mean, there's9

some decommissioning going on in the United States10

and it has been the experience that it costs more11

to decommission those plants than it cost12

originally to build them, so that has to be taken13

into consideration too, that these figures14

probably will not meet the need of this operation.15

MEMBER CARTY: There is also a16

commitment on paper for the provision of17

applicable financial guarantees. This is in the18

submission that the Commission has received.19

MR. KLEINAU: Yes. Right, yes,20

yes, I'm aware of that.21

MEMBER CARTY: I just wondered if22

you could give us an indication from your23

organization how many of your members are actually24

from the Bruce area?25

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MR. KLEINAU: This is one of the1

core areas of our organization. Bruce and Grey2

County and Perth County but then most -- then3

quite a few of the members around the Pickering4

Nuclear Plant, and so it actually is concentrated5

around the nuclear areas.6

And of course what we're trying to7

do is saying that there's cleaner and safer ways8

to generate electricity and it's been proven from9

European examples that they're starting to go that10

way.11

THE CHAIRPERSON: Sorry, Dr.12

Barnes.13

MEMBER BARNES: Bruce Power14

indicated earlier that they had invited all kinds15

of people, including those opposed to nuclear16

power, to meet with them and share their concerns. 17

Did your organization or you yourself take up this18

opportunity?19

MR. KLEINAU: We had that20

invitation. Unfortunately, I was laid up due to a21

hip replacement operation and I was not able to22

attend.23

MR. BARNES: But you indicated24

that you have many people in your organization in25

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this area. Do you not have a structure that some1

of those could have represented the views?2

MR. KLEINAU: Yes, but there's a3

problem with people that have -- I mean, people4

have to have knowledge about the nuclear5

operations, and I do not have very -- very6

complement board in regard to nuclear power7

generation expertise.8

So it would have to be me who9

would have to attend to be able to take in the10

information and also to ask questions.11

MEMBER BARNES: I presume the12

offer is still open though for such meetings? I13

see nodding.14

MR. KLEINAU: Well, I'll be15

certainly happy to attend any other meetings and16

certainly comply.17

THE CHAIRPERSON: Dr. Giroux.18

MEMBER GIROUX: Yes. Mr. Kleinau,19

your calling in your presentation for a full20

assessment under CEAA, I don't know of any trigger21

under CEAA that would generate this assessment at22

this time and I don't know if you can indicate one23

or are you just asking us on our own decision24

power to trigger such an assessment?25

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MR. KLEINAU: Well, I mean, there1

has been an assessment for the Pickering A restart2

and, as I mentioned before, we feel that because3

of this novelty in the licence application that4

there should be an assessment looking into all the5

different issues including the financial issues6

and the background of the lessee to just ensure7

that everything is being covered.8

Of course, I mean, there has been9

talk in this licence application that the Bruce10

Power is intending to look at reopening the Bruce11

A, the reactors, the 25-year-old reactors, and12

that's another thing. I mean, 25-year-old13

reactors, they certainly need a very close look to14

see if they still can be made operational. And15

this would be definitely something that an16

environmental assessment could look at and should17

look at.18

MEMBER GIROUX: But you still are19

not arguing under CEAA?20

MR. KLEINAU: Pardon?21

MEMBER GIROUX: You're not arguing22

under CEAA, the Canadian Environmental Assessment23

Act? You're not saying that CEAA should be used?24

MR. KLEINAU: I don't have the Act25

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with me here to say exactly which portion would be1

applicable for this request but I could certainly2

send that in to the attention to your Board.3

MEMBER GIROUX: Thank you.4

THE CHAIRPERSON: Ms MacLachlan.5

MEMBER MacLACHLAN: My question6

also had to do with CEAA and if you do have a7

recommendation on the specific provision under8

which --9

MR. KLEINAU: I can hardly10

understand you, sorry.11

MEMBER MacLACHLAN: My question12

also was with respect to CEAA and if you do have a13

specific provision or set of provisions under CEAA14

that you are recommending the Commission use to15

trigger an assessment, I would appreciate that you16

do send that information in. Thank you.17

MR. KLEINAU: Certainly, yes, yes. 18

I believe it's Section 16 paragraph 1, in that19

area. We mentioned it at the Pickering20

Application. And, as I say, I will be glad to21

supply that to the Board.22

THE CHAIRPERSON: Mr. Graham.23

MEMBER GRAHAM: Yes. A question24

or a comment, I guess a question I would like to25

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comment on, the second paragraph on page 2 of your1

notes regarding that NII released a scathing2

report on British Energy pointing out the cutbacks3

affecting safety operations, and they found the4

remaining staff working unreal hours and overtime5

and so on, and that's quite strong.6

Would you like to comment further7

and then I will maybe perhaps hear from British8

Energy, or Bruce Power, I mean.9

MR. KLEINAU: Okay. Now, we are10

also connected with the World Information Service11

on Energy based in Amsterdam and we also have a12

member -- you might laugh, but I have a member in13

the U.K. and I have been getting quite a few of14

the newspaper clippings from the Guardian15

Newspaper, that's where I got this information16

from.17

MEMBER GRAHAM: So the information18

was not directly from the report; it was from a19

newspaper article and their interpretation of the20

report?21

MR. KLEINAU: Yes. A newspaper22

article reported on this audit and also quoted the23

Inspectorate.24

MEMBER GRAHAM: Madam Chair, could25

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we perhaps hear from Bruce Power on that?1

THE CHAIRPERSON: Yes, but I would2

also like to recognize that this morning we had a3

discussion on this already, so I just don't want a4

complete repeat of that. But I think it is fair5

to ask Dr. Jeffrey to do that.6

MR. JEFFREY: Yes. Madam Chair, I7

was going to say that this is the subject of the8

NII audit that I was questioned on this morning,9

and the issue of overtime was one of the10

recommendations in the NII report and that was11

addressed by the reference I made to "workload12

planning."13

THE CHAIRPERSON: Dr. Giroux.14

MEMBER GIROUX: Yes. Since we15

have raised the issue of an independent assessment16

under CEAA, could we ask staff to confirm or tell17

us whether there is or there is not a trigger in18

CEAA that might be used here to trigger such an19

assessment? I'm sure staff must have a record of20

that.21

MR. BLYTH: Yes, we certainly22

looked at whether or not CEAA was activated as23

part of this process for licensing of Bruce Power,24

and our determination was that it was not25

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activated because the usage of the facilities was1

not going to change. Bruce A would remain in its2

current shutdown state and Bruce B would continue3

to operate as a Power Reactor.4

MEMBER GIROUX: Thank you.5

THE CHAIRPERSON: Further6

questions.7

Thank you very much, sir.8

Earlier we had an understanding9

that Great Lakes United wouldn't be here at this10

time, that they would be here at four o'clock. I11

just wanted to check before we move on. We will12

be coming back to them, but I just wanted to13

confirm that they aren't in the audience. Okay.14

Then we move then to the next15

presentation which is an oral presentation by the16

Town of Saugeen - I hope I pronounced that17

correctly - Shores as outlined in Document18

O1-H6.8.19

And you can correct my20

pronunciation.21

22

01-H6.823

Oral Presentation by Town of Saugeen Shores24

MAYOR M. KRAEMER: Chair, Members25

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of the Commission, fellow Intervenors, staff and1

members of the public, to my right is Councillor2

Fred Schildroth. My name is Mark Kraemer and the3

pronunciation is actually "Saugeen Shores."4

THE CHAIRPERSON: Okay. Thank you5

very much.6

MAYOR M. KRAEMER: As Mayor, it7

gives me great pleasure to attend this hearing on8

behalf of all the residents of Saugeen Shores. 9

For the benefit of the Board, Saugeen Shores is10

the amalgamated Municipality of the former Town of11

Port Elgin, Town of Southampton and the Township12

of Saugeen.13

Saugeen Shores was formed on14

January the 1st of 1999. Up until that time Port15

Elgin was recognized as one of two host16

municipalities of the Bruce Nuclear Power17

Development housing approximately 39 per cent of18

the employees.19

Ontario Hydro and its successor20

company OPG have been and continue to be very21

important corporate members of our community. 22

Since the 1960s they have been our largest23

employer and were pro-active in assessing impacted24

communities in dealing with the stress placed on25

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infrastructure due to a trebling of populations.1

Over the years Ontario Hydro and2

OPG developed a close working relationship with3

the neighbouring communities recognizing the huge4

impact they had on our daily lives, both5

economically and environmentally. To keep the6

flow of information moving freely, various7

initiatives like the Impact Advisory Committee and8

production of quarterly report cards were some of9

the ways we were kept up-to-date.10

While we certainly did not agree11

with IIPA or NAOP, or NAOP as it was referred to,12

and the subsequent impact on our area of the13

closure of Bruce A, we would say that Ontario14

Hydro has been a good corporate citizen.15

The passage of Bill 35 was16

something that we followed with much interest, not17

only for its ultimate impact on distribution of18

power in Ontario but also as to its impact of19

regulating the divestiture of 65 per cent of the20

production capabilities of Ontario Hydro and the21

creation of the five successor companies.22

We believe that Bruce A would be23

high on the list of sites available for sale or24

lease due to the manner in which it was dealt with25

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by OPG. They clearly had no intention of1

rehabilitating this station even though two of2

four units were economically viable when laid up3

in 1998. Thus when the announcement that British4

Energy was actively pursuing an agreement with OPG5

for the lease of BNPD it was not a great surprise6

but it did raise some interesting scenarios not7

previously experienced in the nuclear arena in8

Canada, that of private sector reactor operation.9

As a municipality, the continued10

operation of Bruce A and Bruce B, from an11

economical perspective, is imperative; however,12

this should not be done without due consideration13

of the following areas: Firstly, safety; secondly,14

environmental issues; thirdly, community impact;15

and fourthly, employee impact.16

It is our feeling that Bruce Power17

has recognized the importance of all of these18

impact areas and are prepared to deal effectively19

and fairly with any and all issues surrounding20

them.21

We have read their application to22

CNSC and the report of CNSC staff with their23

corresponding recommendations and believe many24

community concerns are amply covered.25

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Safety issues are being dealt with1

by implementing the International Safety Rating2

System or ISRS which requires that progress be3

measured by an independent external auditor. 4

Bruce Power has entrenched a safety-first5

commitment as one of their core values. We6

believe this augers well for the safety of the7

employees, the environment and our communities.8

Environmental issues are clearly9

of the highest priority. Once again, everything10

we have read in the various documentation11

satisfies us that the high standard of12

environmental protection we have become accustomed13

to will continue to be the standard in the future14

with Bruce Power.15

The continued involvement of CNSC16

as a regulator and licenser of both Bruce Power17

and as a producer and OPG as a storage service18

provider gives our communities the same level of19

comfort environmentally as is currently in place.20

Any concerns about the change from21

public to private sector operation that we may22

have had regarding corporate citizenship and23

community responsibility have proven to be24

unfounded. Bruce Power has been most cooperative25

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in providing transparent information on a timely1

basis throughout our municipality.2

They are committed to becoming an3

important part of our community and fostering a4

long-term relationship where they are the stewards5

of BNPD, not the pillagers of Bruce County.6

The commitment of $30-million to7

examine the potential rehab' of Bruce A is a8

considerable investment in developing that9

long-term relationship and to maximize employment10

opportunities for our youth.11

The last major community concern12

is the willingness of any operator to deal with13

the existing work force in a fair and14

compassionate manner.15

These are the residents of our16

communities, with many of them having 20, 30 or17

more years of service to the BNPD. Bruce Power18

recognized the valuable asset represented by the19

experienced CANDU trained work force on site and20

has dealt with them in a manner commensurate with21

the individual needs of the employees. We commend22

them for this approach and applaud them for23

recognizing an immediate need to hire new24

employees.25

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In closing, we believe that Bruce1

Power will be a valuable addition to our2

communities and strongly support their application3

for licences to operate Bruce A and Bruce B4

Nuclear Generating Stations.5

THE CHAIRPERSON: Thank you very6

much.7

The floor is now open for8

questions from the Commission Members.9

Thank you very much.10

We will now be taking a 15-minute11

break. It is three o'clock. At 3:15 exactly12

we'll be back here and start again. Thank you13

very much.14

--- Recess taken at 3:00 p.m.15

--- On resuming at 3:15 p.m.16

THE CHAIRPERSON: Thank you,17

ladies and gentlemen.18

We are now going to go to the oral19

presentation by Great Lakes United. This is20

outlined in CMD Document 01-H6.7 and Ms Wooster.21

Thank you very much.22

23

01-H6.724

Oral Presentation by Great Lakes United25

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MS WOOSTER: Thank you very much. 1

I'm going to read our testimony.2

Great Lakes United is an3

international coalition of over 170 environmental4

and community groups, labour Unions and sports5

organizations from Canada, the United States and6

First Nation Territories. We represent tens of7

thousands of individuals around the Great Lakes.8

We were founded in 1982 and were9

dedicated to protecting and conserving the Great10

Lakes/St. Lawrence River ecosystem.11

My name is Margaret Wooster and12

I'm the Executive Director.13

We have been briefed by one of our14

board members of the relicensing application of15

Bruce Power to operate the reactors of the Bruce16

Nuclear Power Development which will be dealt with17

at this Hearing today. We are writing today to18

strongly urge, and I'm speaking today, to strongly19

urge the Commission to defer this decision until20

Bruce Power has undergone a full and independent21

Environmental Assessment.22

Having been involved in previous23

licensing hearings before the Atomic Energy24

Control Board and now the CNSC, we hope that you25

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will receive our testimony with due regard.1

The applicant, being a new entity2

in Canada, and not having any experience operating3

heavy water reactors like the CANDU version, can4

in no way be assessed regarding its competency to5

safely operate this huge Nuclear Generating Plant,6

the largest in the world.7

Even though most of the present8

operating staff will be carrying on their duties9

under the proposed entity in the short term, it is10

the business environment in a competitive market11

system that will govern every decision of the new12

leadership.13

The business conduct of Bruce14

Power's parent company, British Energy, has been15

harshly criticized by the Nuclear Installation16

Inspectorate, the United Kingdom nuclear17

regulatory body. In its 1999 report the NII18

warned that British Energy had cut essential19

safety-related staff to the point where safety20

could become compromised, that the remaining staff21

was working far too much overtime and that British22

Energy had developed an over reliance on outside23

contractors who were not always familiar with the24

reactors they were working on.25

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Problems throughout the company's1

nuclear fleet resulted in drastic declines in2

their share values prompting the Dow Jones stock3

index to drop British Energy from its listed4

premium stocks.5

In CMD 01-H6 we find under 3.6.26

financial qualifications that the Canadian Nuclear7

Safety Commission staff has checked the financial8

status of British Energy and Cameco and determined9

that:10

"They are currently capable11

of fulfilling the provisions12

of the letters of financial13

guarantee to Bruce Power."14

They continue in the next15

paragraph:16

"CNSC staff is of the opinion17

that the letters of financial18

guarantee provide an adequate19

amount of operational20

financial assurance at the21

present time."22

These are serious limitations, and23

in light of the substantial commitment made by24

Bruce Power to complete large safety projects like25

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OPG's environmental qualification program, we1

seriously question their financial capacity.2

In their lease agreement Bruce3

Power is required to operate the facilities in4

accordance with "good utility practices." In the5

definition it states that the "prudent" nuclear6

operator is required to make decisions in7

practices, methods or activities to accomplish8

desired results "at a reasonable cost consistent9

with good business practices, reliability, safety,10

expedition and applicable law."11

The statement appears to12

prioritize the cost factor and place safety, not13

in any way defined, well down the line to14

insignificance; whereas the public good requires15

just the opposite, operating nuclear reactors with16

a need to have public safety placed above17

everything else since any accident would have18

devastating consequences that cannot be mitigated.19

In numerous important operating20

issues we read the assurance that CNSC staff will21

closely monitor and conduct audits and assessments22

of Bruce Power performance.23

We question the capability of CNSC24

to perform the intended supervision, as the25

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Auditor General of Canada in his report released1

December 20th, 2000 points to the under-staffing2

in the regulatory department. In 27.34 he states:3

"The present vacancy rate and4

the lengthy periods of5

vacancies in technical6

positions have a significant7

impact, in our view, on the8

CNSC's ability to effectively9

inspect and regulate the10

nuclear industry despite the11

management's efforts to12

reduce that impact."13

This clearly shows the biggest14

problem in allowing an unqualified applicant to15

operate nuclear reactors in a competitive business16

climate without sufficient CNSC supervisory17

capacity.18

All these listed concerns should19

be serious enough to cause the Commission to20

invoke the NSC Act where, in Subsection 24(4) it21

has the power to deny the issuance of a licence,22

as it reads:23

"No licence may be issued,24

reviewed, amended or replaced25

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unless, in the opinion of the1

Commission, the applicant2

'(a) is qualified to carry on3

the activity that the licence4

will authorize the licensee5

to carry on; and (b) will in6

carrying on that activity7

make adequate provision for8

the protection of the9

environment, the health and10

safety of persons and the11

maintenance of national12

security and measures13

required to implement14

international obligations to15

which Canada has agreed."16

We strongly urge the Commission to17

withhold issuance of an operating licence to Bruce18

Power subject to a full independent environmental19

assessment.20

Too many issues remain unresolved21

concerning the potential risks posed by Bruce A22

and Bruce B to the health and safety of the23

public, to Great Lakes waters and wildlife and to24

Canada's international obligations under the25

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Boundary Waters Treaty and the Great Lakes Water1

Quality Agreement.2

We are sending this delegate, and3

that is me, to make this presentation today. I4

respectfully submit this on behalf of Great Lakes5

United, our Board of Directors and our 170 member6

organizations.7

Thank you.8

THE CHAIRPERSON: Thank you. The9

floor is now open for questions from the10

Commission Members.11

Ms MacLachlan.12

MEMBER MacLACHLAN: Thank you for13

your presentation.14

On page 2 of your presentation you15

state "problems," and you're referring here to16

British Energy:17

"Problems throughout the18

company's nuclear fleet19

resulted in drastic declines20

in their share values21

prompting the Dow Jones stock22

index to drop BE from its23

listed premium stocks."24

Could you provide us with details,25

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please, behind that statement?1

MS WOOSTER: I'm going to defer2

here to my Board member Ziggy Kleinau.3

MR. KLEINAU: Yes. Again we have4

connection to the World Information Service on5

Energy and they send out monthly bulletins6

actually, bi-weekly bulletins, and this was taken7

from their information, World Information Service8

on Energy, and they're giving this information out9

to their members.10

MEMBER MacLACHLAN: Could you give11

us the time-frame and do you have any details?12

MR. KLEINAU: I will supply it to13

the Board, I haven't got it with me but I14

definitely will make that commitment.15

MEMBER MacLACHLAN: Okay. And if16

I may, Madam Chair?17

THE CHAIRPERSON: Sorry, Ms18

MacLachlan, I think perhaps it would be19

appropriate to have Dr. Jeffrey speak to that20

point.21

MEMBER MacLACHLAN: I was just22

going to ask that.23

THE CHAIRPERSON: Oh, sorry.24

Then I would ask for British25

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Energy to comment on that quote in this1

submission.2

MR. JEFFREY: Yes. I would3

provide the information from my memory but I think4

it's fairly accurate.5

British Energy was floated at a6

share price of 200 pence in 1996. The share price7

increased to a value of about, somewhere between8

600 and 700 pence as of around about 18 months9

ago.10

The share price then fell very11

substantially about a year ago or with some12

further restructuring in the electricity market in13

the U.K., and reached a low of about 120 pence.14

As of today the share price is15

around 280 pence, which compares with the 20016

pence of when we were floated.17

In the period from '96 until now18

there has been a return of value to shareholders19

of round about 450-million. So you have to adjust20

the 280 pence upwards to something in excess of21

300 pence.22

I will provide a note of that23

information if you would like it.24

MEMBER MacLACHLAN: Thank you. I25

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just wanted that in context and to hear from both1

parties.2

And then I would also ask, in your3

submission you recommend that a full environmental4

assessment review take place.5

I assume that your recommendation6

is also making reference to CEAA and I was7

wondering if you saw any particular clauses in8

CEAA that would be triggered, what provisions,9

what kind of framework are you making this10

recommendation pursuant to? Can you help me with11

that?12

MR. KLEINAU: I would like to give13

you that information post-hearing wise because, as14

I said, I haven't got full provisions of the CEAA15

here and I certainly will cooperate in that regard16

and will send that out as soon as possible.17

MS MacLACHLAN: That's fine, thank18

you. I didn't realize when I read these19

submissions that you, as an individual, were20

linked to both organizations.21

MR. KLEINAU: Well, I'm a board22

member. I am with the Nuclear Great Lakes Task23

Force which is one of the four task forces that24

Great Lakes United operates and so quite a bit of25

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the information does come through to my status as1

a member on the nuclear --2

MEMBER MacLACHLAN: Thank you.3

THE CHAIRPERSON: Mr. Graham.4

MEMBER GRAHAM: The question I5

have is to Bruce Power, British Energy. Is it6

correct then that you have been dropped from the7

listing -- not dropped from the listing, but from8

the premium stock listings?9

MR. JEFFREY: The Dow Jones one I10

can't quote, unless David knows. We have -- we11

started our life not in the FTSE 100, which is the12

U.K. equivalent.13

MEMBER GRAHAM: Yes.14

MR. JEFFREY: We moved up to be15

within the FTSE 100, but then when our share price16

fell at the same time as the dot-coms became17

extremely fashionable, we fell out of the FTSE 10018

and today we're sort of 120 or something like19

that.20

MEMBER GRAHAM: Another question I21

have for Great Lakes United. You talk about, I22

believe it's 170 members, I believe that's23

organizations not 170 members. How many First24

Nations do you have and are any of them here25

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today?1

MS WOOSTER: There's nobody here2

today. Maria Mabe, who is a First Nations staff3

person on our staff I believe was at the last4

hearing.5

MEMER GRAHAM: Yes.6

MS WOOSTER: And we have, I don't7

actually know, five or six First Nations groups8

that are members of Great Lakes United including9

the Indigenous Environmental Network which10

represents hundreds of groups around the Great11

Lakes. Hodnisoni(ph) Environmental Task Force,12

the Assembly of First Nations are all members, and13

we have two First Nations board members of the 2414

board members.15

MEMBER GRAHAM: But are there any16

First Nations members from this area, from the17

Bruce area?18

MS WOOSTER: Yes.19

MEMBER GRAHAM: Which First20

Nations are members from this area?21

MS WOOSTER: Well, I think all of22

the members that are members of either Assembly of23

First Nations or Indigenous Environmental Network24

that are members of Great Lakes United...25

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MR. GRAHAM: No, no, not -- just1

because they're members of the Assembly of First2

Nations, I don't mean that automatically makes3

them a member. I'm just saying how many are4

actual members in this area of First Nations?5

MS WOOSTER: Are you talking about6

like individual people or--7

MEMBER GRAHAM: No, individual8

First Nations.9

MS WOOSTER: Or groups?10

MEMBER GRAHAM: I'm saying, I11

don't want you just to claim that because they12

belong to the Assembly of First Nations they're13

automatically a member. I want to know are there14

members here from this immediate area, First15

Nations?16

Put it this way: Do all the First17

Nations in the immediate area of Bruce, are they18

members of Great Lakes United?19

MS WOOSTER: No.20

MEMBER GRAHAM: Okay, thank you.21

THE CHAIRPERSON: Dr. Giroux.22

MEMBER GIROUX: Thank you. I23

would like to explore further the reference to the24

performance of British Energy because we have25

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heard the argument from Bruce Power that they have1

experience and know-how and they are able to2

manage the Bruce complex here.3

Great Lakes states in their first4

paragraph on the second page two things: That5

they had developed an over-reliance on outside6

contractors who are not familiar with the reactors7

they were working on for one thing; and then you8

also state that the decline in share values was9

due to the problems throughout their nuclear10

fleet.11

I would like you to address this12

and comment. Do you accept this statement or are13

you contrary?14

MR. JEFFREY: I don't believe the15

statement to be accurate. The first part of it16

comments on the NII Audit Report that I outlined17

this morning. I said that we had arrangements in18

place with contractors. The NII had got concerns19

about the use of contractors. We have accepted20

their comments. I do believe the arrangements21

which we had in place were safely supporting the22

operation of the power stations, and the NII Chief23

Inspector at the time said that there was no24

immediate challenge to the safety of the operating25

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stations.1

His concern was, as I said this2

morning, that with contractors potentially ceasing3

to trade and change of ownership that that might4

not be available in the longer term.5

But we have taken those comments6

from the NII Audit and, as I said, we have changed7

our policy with respect to contractors.8

With respect to the relationship9

between the NII report and our share price, I do10

not believe there's a connection. The connection,11

as I said a few moments ago, was the introduction12

of the changes and the way in which the13

electricity markets operate in the United Kingdom.14

These new arrangements were fully15

brought into operation on the 27th of March and16

our share price has substantially recovered over17

the past 12 months and, as I said, today stands at18

round about 280 pence.19

MEMBER GIROUX: Thank you.20

THE CHAIRPERSON: Dr. Carty.21

MEMBER CARTY: Just one question. 22

About the second last paragraph on page 2 of your23

letter which refers to the supervisory capacity of24

CNSC staff, and the question is: In the Auditor25

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General's report of 2000 - this is a question,1

Madam President, of staff - were any of the2

comments specifically targeted to supervisory3

capacity at the Bruce facility?4

MR. BLYTH: Jim Blyth. No, I5

don't believe any of those comments of the Auditor6

General were that specific.7

MEMBER CARTY: Thank you.8

THE CHAIRPERSON: Mr. Graham.9

MEMBER GRAHAM: A further question10

to CNSC staff. Has there been a financial11

analysis done of British Energy's stock and of the12

company and its ability to carry on the massive13

expansions that it has in the last couple of14

years? Has there been an analysis done of its15

capability of taking over the Bruce plant?16

MR. ELDER: No, we have not done17

an analysis of their stock or their overall18

financial obligations. We concentrated on the19

qualification of Bruce Power who actually is the20

Applicant in this case.21

THE CHAIRPERSON: Yes?22

MS WOOSTER: I would like to ask23

if you can tell me how many supervisory staff24

there are?25

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MR. JEFFREY: On Bruce?1

MS WOOSTER: Yes, on Bruce.2

THE CHAIRPERSON: We did actually3

discuss this morning how many staff were at the4

Bruce area, but I will ask CNSC staff to repeat5

that.6

MR. BLYTH: We have seven7

full-time staff in our Bruce office.8

THE CHAIRPERSON: And the9

supervisor is...?10

MR. BLYTH: And the supervisor is11

Mr. Jim Douglas.12

THE CHAIRPERSON: Has that changed13

at all over a period of time?14

MR. BLYTH: I'll let Mr. Douglas15

address that.16

MR. DOUGLAS: It's been fairly17

stable for the last year and a half to two years.18

It's been fairly stable for the19

last year and a half to two years. It fluctuates20

maybe one or two people but not much more than21

that. And right at the moment we have a full22

complement. In fact, we usually work on the rule23

of thumb of being one project officer per24

operating reactor and we've got four operating25

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reactors at the moment, six people and me as1

supervisor.2

MS WOOSTER: So one supervisory3

staff? Is that what he's saying?4

THE CHAIRPERSON: Thank you. 5

Thank you very much for your presentation.6

We'll now move to the oral7

presentation by the Canadian Nuclear Workers8

Council and Grey-Bruce Labour Council as outlined9

in CMD Document 01-H6.9, and I believe Mr.10

McCaffrey is with us today.11

12

01-H6.913

Oral Presentation by Canadian Nuclear Workers14

Council and Grey-Bruce Labour Council15

MR. LYLE: Thank you, Madam Chair,16

Members of the Commission. Jeff Lyle is my name.17

THE CHAIRPERSON: Okay.18

MR. LYLE: Anyway, I'm here on19

behalf of the Canadian Nuclear Worker Council of20

which I am a Board Member.21

I would like to make some brief22

comments to support the transfer of the operating23

licence from the nuclear facilities the Bruce to24

the company known as Bruce Power.25

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I'm joined today on my left by Mr.1

David Trumble, President of the Grey-Bruce Labour2

Council who will present the views of local labour3

organizations.4

The Canadian Nuclear Worker5

Council was founded in 1993 as an umbrella6

organization of workers from all facets of the7

Canadian Nuclear Industry who are represented by8

Unions or worker associations. The purpose of the9

council and the list of our member organizations10

are attached on Appendix 1.11

The purpose of our member12

organizations of the Grey-Bruce Labour Council are13

attached as Appendix 2.14

Members of the Commission, thank15

you for this opportunity to come before you and16

present the views of nuclear workers from many17

organizations across the country as well as those18

of the Grey-Bruce District Labour Council. We19

will try to avoid duplicating those issues20

addressed in previous presentations and21

concentrate instead on the national view of the22

Canadian nuclear worker and international nuclear23

worker's perspective and the view of local labour24

organizations.25

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In the view of Canadian nuclear1

workers, the transfer of the nuclear licence from2

Ontario Power Generation to Bruce Power rests3

largely on three main elements. One is the4

contribution of nuclear energy to Ontario and5

Canada's electricity supply; two, is the fitness6

of Bruce Power as the Owner and operator of7

nuclear power facilities; and three, the8

continuing of employment opportunities in the9

Grey-Bruce Region. The representative of the10

local labour council will address point three and11

I will address the others.12

Mr. Trumble will speak first on13

the local labour perspective.14

MR. TRUMBLE: Thank you, Jeff, and15

thank you Madam Chair and Commissioners.16

I will just introduce myself. I'm17

Dave Trumble. I'm currently President of the18

Grey-Bruce Labour Council. I have been President19

of the Council for the last six years. I have20

also been on the executive of the Council since21

1989.22

In addition, I also sit as a23

Labour Director on the Bruce-Grey, Huron-Perth,24

Georgian Triangle local training board.25

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The Grey-Bruce Labour Council1

through our education committee has been very2

active informing people in communities throughout3

the region about the opportunities that Bruce4

Power represents for the region. Bruce Power's5

involvement in local communities to date is also6

extremely encouraging. The Labour Council has7

been involved directly with Bruce Power in some8

community activities where we have been able to9

observe the company first-hand in the communities. 10

Our judgment is that Bruce Power exhibits a strong11

sense of good corporate citizenship.12

In regards to local employment,13

the Grey-Bruce Labour Council has a long history14

of involvement in labour adjustment training and15

labour market-needs analysis in our region. Our16

activities in these matters are managed through17

our participation with Bruce-Grey, Huron-Perth,18

Georgian Triangle Training Board. Two of our19

delegates to the Labour Council actually sit on20

the Executive.21

To date Bruce Power has expressed22

to our Council and to the Training Board a desire23

to staff its work force as required with local24

talent. The company's Executive Vice-President25

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for Human Resources has met with representatives1

of both the Council and the Training Board to2

review labour market information and has indicated3

a strong desire to work pro-actively with both to4

establish procedures for local hiring.5

Continuity of business and6

employment activities can only be seen as vital in7

a region that is not blessed with an abundance of8

well-paid employment opportunities. Of particular9

interest to the District Labour Council is the10

prospect that Bruce Power will hire 50 apprentices11

each year for the next 20 years. We are all too12

aware of the familiar story of young people being13

forced to leave smaller regional centres like the14

Grey-Bruce area to find employment in larger urban15

centres. The loss of population can be disruptive16

to families and communities, and the loss of17

technical expertise is often irreplaceable.18

The successful transfer of the19

licence to Bruce Power will help prevent the drain20

of young people from our region and make an21

important contribution towards keeping our22

communities vital and thriving.23

A strong sense of good corporate24

citizenship, meaningful jobs for the local work25

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force and a demonstrated willingness to work with1

community groups are strong and compelling reasons2

for the Grey-Bruce Labour Council to support the3

licence application by Bruce Power and we are4

pleased to do so.5

MR. LYLE: Members of the6

Commission, you will hear in other submissions7

adequate testimony on the record about the8

performance of Bruce Power's major partner British9

Energy in managing and running nuclear plants. 10

The company has carved out a very productive11

business for itself by purchasing nuclear plants,12

some of which were seen as failing operations and13

turning them into profitable enterprises.14

In our view the company's long15

experience in nuclear operations amply16

demonstrates that it possesses the technical and17

managerial expertise to operate the Bruce plants18

at the level of safety and excellence required in19

our Canadian setting.20

As you've heard in past21

presentations to the Commission, the Canadian22

Nuclear Worker Council is a member of the World23

Council of Nuclear Workers. Among the benefits of24

our association with that body is the opportunity25

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it offers us to link with nuclear workers in other1

countries and exchange information on everything2

from nuclear health and safety issues to work3

methods and practices used.4

Of significance for this Hearing5

is a perspective we bring from our colleagues who6

work in British Energy's operation in the U.K. 7

Our counterparts in Britain have sent the8

following remarks to me which I'm pleased to place9

on the record here, and they will be identified as10

Appendix 3 as our attachment.11

I guess due to the time I'm going12

to omit Section 6. In conclusion, the Bruce13

Nuclear Power facility represents a tremendous14

opportunity for economic and social continuity in15

the Grey-Bruce Region. It also represents a major16

contribution to Ontario's energy supply and to our17

environmental well being.18

Members of the Commission, from19

what you would have heard in our remarks here and20

in the other presentations, we trust you will21

agree with our confident belief that there is no22

serious impediment to the transfer of the23

operating licence from Ontario Power Generation to24

Bruce Power.25

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Thank you.1

THE CHAIRPERSON: Thank you very2

much.3

The floor is now open for4

questions from the Commission Members.5

Thank you very much.6

We will now move to the oral7

presentation by the Society of Energy8

Professionals as outlined in CMD Document9

01-H6.10, and I believe the President is with us10

today.11

12

01-H6.1013

Oral Presentation by the Society of Energy14

Professionals15

MR. THROOP: Madam President,16

Members of CNSC, Commission staff and fellow17

intervenor representatives, my name is Colin18

Throop and I am the President of The Society of19

Energy Professionals.20

With me here today are Mr. Rod21

Sheppard, Mr. John Hebb, and Mr. Bob Wells, who22

are three society Unit Directors here on Bruce23

Site.24

We welcome the opportunity to25

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appear before you on this second day of public1

hearing as Intervenors showing support to Bruce2

Power Incorporated's application for licences to3

operate Bruce A and B Nuclear Generating Stations.4

The Society of Energy5

Professionals represents some 6,000 employees from6

the corporations which have been created and7

continue to be created out of the old Ontario8

Hydro organization, as well as Professional9

Engineers at Toronto Hydro.10

Our members are employed as11

supervisors, professional engineers, scientists12

and other professional and administrative and13

associated staff. I'm pleased to attest to their14

professionalism, integrity and commitment to15

excellence and performance in all areas,16

particularly environmental health and safety.17

Subject to the granting of these18

licences and financial close of the lease19

agreement between Bruce Power and Ontario Power20

Generation, approximately 700 of these21

representative employees from OPG will be22

transferred to and become Bruce Power employees23

here at the Bruce Site. As well, under a two-year24

service agreement between OPG and Bruce Power a25

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few representative employees will be located at a1

satellite office in Toronto working alongside OPG2

employees.3

Other service agreements with OPG4

include many of our highly specialized technical5

representative members who belong to the nuclear6

operation support services organization of OPG.7

The Society's mission is to strive8

to ensure the best rewards, career opportunities9

and working conditions for its members. 10

Recognizing that our member successes are closely11

tied to the employer successes, we have always12

pursued a cooperative, collegial relationship with13

our employers. We believe that we are in the14

forefront of those enlightened Unions and15

employers that are developing less16

confrontational, more productive ways of coping17

with both our mutual and different interests.18

We have been working cooperatively19

this past year with both Bruce Power and OPG in20

order to ensure a seamless transaction and21

financial close. We consider the nurturing of22

this relationship to be a high priority mission23

both for the success of the employer and our24

members.25

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We also want to ensure that1

environmental security and workplace health and2

safety are enhanced and strengthened in the move3

towards competition.4

We are extremely pleased that OPG5

chose British Energy and Bruce Power's proposal to6

lease the Bruce Station as we are aware of their7

established reputation and values around8

achievement through people, safety first, profit9

through progress, openness, respect and10

recognition and professional and personal11

integrity.12

Relative to the Memorandum of13

Understanding, we have in place with OPG a14

collective agreement for a three-year term 2001 to15

2003 inclusive. In addition to the Memorandum of16

Understanding that has been developed between the17

Society and Bruce Power, the three-year agreement18

rolls over to Bruce Power.19

Under the terms Bruce Power has20

agreed to assume all of the obligations of that21

collective agreement subject to those amendments22

that are set out in the Memorandum of23

Understanding. The Memorandum of Understanding24

was ratified by over 90 per cent of our Bruce Site25

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membership reflecting our labour stability and the1

desire and commitment of both parties to establish2

a positive, mutually beneficial relationship.3

This initial experience is our4

first step in being open with each other in order5

that we may understand each other and our journey6

towards mutual respect and trust.7

I would like to add that the8

Memorandum of Understanding is independent of the9

equity arrangement with Bruce Power Incorporated10

for both ourselves and the PWU. The equity11

understandings are for the life of the operating12

plant.13

Relative to the joint working14

team, the joint working party is constituted to15

serve as joint forum for both Bruce Power16

Management and the Society's elected officials to17

discuss and progress any labour relations matters. 18

This current working forum is off to a good start,19

initially focusing its attention on the20

implementation of the Memorandum of Understanding,21

but has since expanded its mandate to include22

solving our collective agreement matters in order23

to support the business. There is a genuine24

commitment to worker involvement and win/win25

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solutions.1

Relative to the independent review2

panel, the independent review panel was3

established jointly by the Commission in its4

configuration as AECB and Ontario Hydro Nuclear in5

June, 1999 to review the state of labour6

management relations and to assess their impact on7

both safety of operations of nuclear facilities8

and on implementation of Hydro's nuclear recovery9

plan. The report in part indicated that the10

labour relations environment was sour and some11

significant employee morale problems existed. We12

can now confidentially say that our new management13

leaders have displayed a style of very positive14

and inclusive labour philosophy which specializes15

in an interspaced versus an adversarial based16

approach to dispute resolution. This labour17

management relationship is seen by our membership18

as being a quite positive sieve at this early19

stage.20

Relative to safety culture, our21

representative employees feel that the Bruce Site22

is a safe place to work but improvements are23

warranted and always welcome. We also know that24

most profitable plants are also the safest plants.25

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The safety and health of our1

members, their families and their communities2

along with the protection of the environment are3

some of our members' top priorities.4

Relative to the international5

safety rating system, the International Safety6

Rating System is not an accident prevention system7

but recognized internationally as a loss control8

process. It is a tool to assist us in preventing9

losses which contribute to an increase in10

performance and production, thereby resulting11

ultimately in a new safety culture on site.12

OPG and Bruce Power have jointly13

sponsored implementation of the International14

Safety Rating System for the Bruce Site. It has15

been decided to set a goal of achieving a five out16

of a possible 10 on the International Safety17

Rating System by the end of the first quarter of18

2002. This target has jump-started our members'19

involvement in working towards implementation,20

implementing the necessary performance21

improvements at Bruce B so that Bruce A restart22

can be considered.23

We fully support the elements that24

have been initiated to date and look forward to25

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further expansion of the program.1

We currently have members on each2

element team and I expect to have more as the3

program expands. We look forward to the day that4

the program is part of the fabric of day-to-day5

work processes.6

Relative to succession planning,7

Bruce Power has committed itself to making a8

substantial investment in the recruitment of young9

people and the ongoing training of current staff10

to ensure that there is a pool of skilled11

employees available. In our view if we all12

succeed in achieving the goals that we have set13

out for ourselves, the Bruce Site will become a14

very attractive and desirable workplace.15

Relative to tripartite16

relationships, we have demonstrated our commitment17

and involvement in working together towards a18

safe, positive, productive and harmonious19

workplace among the Society, Bruce Power and the20

Power Workers by actively participating in forums,21

for instance the Bruce Improvement Group which has22

now been integrated into the BOLT, the Bruce23

Operational Leadership Team and the International24

Safety Rating System and the Bruce Improvement25

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Program and Joint Working Party and communication1

teams and the CNSC Human Factors Presentation and2

Equity Partnership.3

We are working on the premise of4

negotiation on a mutual interest bargaining basis. 5

Both Union and management want worker engagement6

and we are looking forward to working together on7

future initiatives such as single table8

negotiations.9

In closing, the local Union10

leaders are very confident in the senior11

leadership of Bruce Power. They are confident12

that the future prospects for a safe, reliable,13

competent and progressive operation of our Bruce14

station looks better now than they have for quite15

some time. We believe that our respective leaders16

continue to gain experience from working together,17

and the anticipated culture and associated18

behaviours will continue to adapt in order to meet19

the challenges of a competitive marketplace. We20

are on the road to success and meeting the desired21

results.22

The Society is therefore fully and23

actively supporting the Bruce Power licence24

application.25

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THE CHAIRPERSON: Thank you very1

much.2

The floor is now open for3

questions from the Commission Members.4

Dr. Carty?5

MEMBER CARTY: No, I don't.6

THE CHAIRPERSON: No, you don't.7

Dr. Barnes.8

MEMBER BARNES: I notice on page 49

where you mentioned setting a goal of achieving a10

five out of a possible 10 on the International11

Safety Rating System. Where are you at the12

present time?13

MR. THROOP: In first evaluation,14

as was stated by Duncan this morning, we have15

undertaken nine elements of the 20 element scale,16

so in terms of our best possible at this point in17

time, given that we have not undertaken all 2018

elements, the best we could possibly do would be19

the five, and as we grow with experience on20

implementing the elements of that we will grow21

towards the 20 and certainly target towards the22

full program as it's defined.23

MEMBER BARNES: Okay.24

THE CHAIRPERSON: Dr. Giroux.25

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MEMBER GIROUX: Thank you. I have1

commented earlier with the Power Workers Union2

about the significance of the relationship being3

presented to us and this applies to the Society.4

Am I correct in assuming that the5

MOU is in place for the duration of your6

collective agreement?7

MR. THROOP: It is.8

MEMBER GIROUX: Which covers this9

licence which is applied for?10

MR. THROOP: That is correct. And11

we have a three-year agreement which runs to12

December, 2003 and we have every expectation to13

renew the MOU at that point in time or incorporate14

it into our collective renewal.15

MEMBER GIROUX: Thank you. And16

does it contain about the same clauses as the one17

with the Power Workers' Union like labour peace18

and no distractions and -- I think that is the19

wording.20

MR. THROOP: I think those are the21

basic ones, and I'll direct it to Mr. Sheppard22

here as a member of the joint working party.23

MR. SHEPPARD: Yes. Most of the24

articles in the Memorandum of Understanding are25

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somewhat similar and yes, we have -- sorry,1

mediation and arbitration in our collective2

agreement as it is, so that carries on into the3

new period of the contract.4

MEMBER GIROUX: Thank you.5

THE CHAIRPERSON: Thank you very6

much for your presentation.7

We will now move to the oral8

presentation by the Integrated Energy Development9

Corporation as outlined in CMD Document 01-H6.11,10

and I believe that the Chairman, Mr. MacGregor is11

with us.12

MR. MacGREGOR: Yes, thank you.13

I just would like to note that it14

isn't clear from the CMD Document the background15

of the corporation, so if you wouldn't mind16

outlining that, if you intended to do that that it17

would be great.18

19

01-H6.1120

Oral Presentation by Integrated Energy Development21

Corp.22

MR. MacGREGOR: Sure. Integrated23

Energy Development Corp is a private Ontario24

company primarily engaged in developing enhanced25

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activities around nuclear power plants. We1

believe that through co-generation and off-peak2

uses of non-carbon based electricity there can be3

a whole paradigm shift towards sustainable4

development through sustainable energy5

development.6

We are privately funded. We are a7

private company. We've been at the Bruce Energy8

Centre for a long time, since its origin, and we9

work away at trying to diversify the friendly10

atom.11

THE CHAIRPERSON: Thank you very12

much. You can start your presentation now, thank13

you.14

MR. MacGREGOR: Thank you. If I15

may, there have has been a number of events that16

have occurred recently and I would like to deviate17

slightly from my written executive summary. I18

have copies of that, if the Commission Members and19

yourself would like to have them.20

THE CHAIRPERSON: Certainly, we'd21

like you to do that, but I would ask you to22

respect the 10-minute limit.23

MR. MacGREGOR: Yes, I will.24

As a strong proponent of nuclear25

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energy, Integrated Energy Development Corp is1

pleased to support Bruce Power Inc.'s application2

for licences to operate Bruce Nuclear Generation3

Stations A and B.4

This is where the deviation comes5

in. From a safety and regulatory perspective,6

there is no greater safety issue facing human kind7

than the preservation of an appropriately balanced8

atmosphere, and any rational thinking person now9

knows that the earth's delicately balanced10

atmosphere is seriously threatened with carbon11

dioxide emitted from burning high-carbon content12

fossil fuels. In this regard I am grateful for13

the opportunity to express my opinion on the14

environmental relevance of nuclear energy and the15

prospect of broadening its role in response to16

sustainable economic development and climate17

change.18

As I concluded in the executive19

summary portion of my March 20th written20

submission to the CNSC, IEDC believes that there21

remains a clear and present opportunity to launch22

the beginning of a nuclear renaissance at Bruce23

Nuclear.24

IEDC contends that the business25

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culture inherent in energy companies structured1

similar to Bruce Power Inc. will, should they2

decide to make it their business, successfully3

exploit this opportunity.4

However, since submitting my March5

20th, 2001 rationale for supporting Bruce Power6

Inc.'s licence application, the cluster of7

energy-intensive industry situated at the Bruce8

Energy Centre has learned that nuclear-derived9

process steam will never again be made available10

to the Bruce Energy Centre regardless of its11

12-year history of supply from the Bruce12

Generating Station A.13

Bruce Energy Centre industry has14

also learned that access to nuclear-derived15

electricity by directly connecting the Bruce16

Energy Centre into the generation facilities at17

Bruce Nuclear will not be accommodated.18

Even though a current KPMG report19

developed in conjunction with Acres International20

confirms that accessing both energy mediums at21

Bruce Energy is technically viable, OPG and Bruce22

Power have stated safety and regulatory issues now23

prohibit the provision of nuclear-derived steam24

and direct access to electricity to the Bruce25

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Energy Centre from Bruce nuclear on which the1

Bruce Energy Centre was originally premised.2

Compounding the Bruce Energy3

Centre dilemma, IEDC's recent initiative to4

develop a natural gas fueled combined cycle cogen5

facility to help mitigate the nuclear asset6

optimization plan impact failed to materialize7

primarily because OPG would not provide access for8

the facility to be situated at the shutdown Bruce9

Heavy Water Plant site which is outside the10

nuclear exclusion zone for both Bruce Generating11

Stations A and B.12

Even though the Bruce13

co-generation could have underpinned the Bruce14

Energy Centre while complimenting Bruce Nuclear15

and help support the provision of a large, natural16

gas infrastructure to the area, it now appears17

that Ontario Hydro's often touted promise of18

sustainable development and co-generation19

occurring at the Bruce Energy Centre, in20

conjunction with Bruce Nuclear, could fail to21

materialize.22

Clearly, the practice of23

nuclear-based co-generation together with the24

production of hydrogen and oxygen from water using25

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nuclear-based electricity is certain to develop1

somewhere early in the 21st century in response to2

climate change.3

In this regard, the IEDC regrets4

that the important environmental activity cannot5

be initiated in the Bruce where CANDU technology6

was given its commercial birth and where the Bruce7

Energy Centre has offered so much promise.8

Therefore - and this is way9

outside my mandate but I beg your indulgence -10

IEDC respectfully requests a rational explanation11

from the CNSC as to why nuclear-based processed12

steam, either by means of turbine extraction or13

primary steam through an appropriate re-boiler14

system, cannot be returned to industrial use at15

the Bruce Energy Centre.16

As well, since the origin of all17

electricity transported out of Bruce Nuclear on18

route to Western Ontario was generated at Bruce19

Nuclear, IEDC respectfully requests a rational20

explanation as to why a direct delivery of21

nuclear-based electricity cannot be provided to22

the Bruce Energy Centre to qualify the Bruce23

Energy Centre industry as an embedded generator24

load.25

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THE CHAIRPERSON: Thank you for1

your presentation.2

The Members of the Commission have3

a copy of the presentation.4

I would just remind you of the5

purpose of the Hearing, and I just remind you that6

the Hearing is with regards to the Bruce Power7

Inc.'s applications for licences to operate Bruce8

A and B Nuclear Generating Stations.9

MR. MacGREGOR: I appreciate that.10

THE CHAIRPERSON: So our mandate11

and the issues to be discussed at the Commission12

Hearing today are restricted to those areas13

specifically.14

There may - and I repeat 'may'15

because I may be ruling on this sooner than later16

- there may be an area that does touch us and17

that's with regards to your statement, the last18

paragraph and I quote:19

"OPG and Bruce Power Inc.20

have stated safety and21

regulatory issues are22

prohibiting the provision of23

nuclear-derived processed24

steam and direct access to25

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electricity to the BEC from1

Bruce Nuclear on which the2

BEC was originally premised."3

So that may be the narrow area of4

the view of the Safety Commission. In that vein,5

I would like to turn to the Commission staff for6

any comments on that.7

MR. BLYTH: Jim Blyth.8

Unfortunately we are not in a9

position to comment. We've never seen the10

proposal, either in Ottawa or in the site office.11

THE CHAIRPERSON: Perhaps Mr.12

MacGregor then you might give some details as to13

what exactly are the safety and regulatory issues?14

MR. MacGREGOR: I don't know.15

THE CHAIRPERSON: What are they16

based on?17

MR. MacGREGOR: I really don't18

know what they would be because we have had for 1219

years a supply of nuclear steam that went through20

the boiler system and then through a re-boiler21

system that energized the industry at the Bruce22

Energy Centre for 12 years.23

We are now on a fossil-based24

source of energy since Bruce Generating Station A25

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was laid up.1

So it was there. I don't know why2

it wouldn't be again there.3

With regard to the electricity4

component it's nothing more than a special5

connection that would afford a unique opportunity6

to wrap a major energy-intensive industrial base7

around the friendly atom.8

So I have no understanding, no9

comprehension as to why there would be a safety10

issue or a regulatory issue.11

THE CHAIRPERSON: Okay. I'm going12

to just allow a little bit more elaboration of13

this by Bruce Power, realizing that I may be14

ruling that this is not pertinent to the Hearing15

today.16

But would you care to comment, Dr.17

Jeffrey?18

MR. JEFFREY: I will set the19

background and Duncan will follow with some of the20

technical issues and we will attempt to keep it21

very brief.22

We have committed to continue to23

supply steam through the boiler that was described24

earlier through the oil-fired boiler in perpetuity25

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of our tenancy at the Bruce Power. We have said1

that we will provide that steam at cost. We will2

not, as a company, seek to make any profit out of3

that operation.4

Mr. MacGregor has referred to the5

practices which existed up until the shutdown of6

Bruce A to supply nuclear steam directly from the7

plant to the Energy Centre. In the very top level8

look that we have had regarding this, we believe9

that that could be a conflict with good, modern,10

safety practices and Duncan will amplify on that11

in a minute.12

With respect to the electricity,13

our licence is to supply electricity into the14

Hydro One substation. It is not part of our15

licensing to supply electricity directly to16

industrial customers and, again, we think tapping,17

from a superficial view or a preliminary view, we18

believe that tapping into the station electricity19

supply system upstream of the Hydro One20

transformers would be prejudicial to the safer21

operation of the plant.22

Duncan, would you care to23

elaborate on that?24

MR. HAWTHORNE: Yes. If I can25

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say, Madam Chair, we're tremendously sympathetic1

to the views of the Energy Centre. We took the2

report that was commissioned by KPMG as being a3

technical evaluation. We provided help and4

support to the creation of that piece of work. 5

And really there's two or three key issues which6

are fundamental to this discussion.7

One is that when the situation8

existed where Bruce A operated there was an excess9

of nuclear steam because the steam generating10

capability of the steam generators was greater11

than that required to power the turbines, so12

excess steam existed there. And a very innovative13

approach was developed through a re-boiling14

situation direct steam, this excess steam in an15

indirect coupled manner to the Energy Centre.16

Two situations have changed since17

then in terms of nuclear steam. One is that even18

with the restart of Units 3 or 4 there is no19

longer an excess steam capability.20

The second thing is that since the21

Bruce A has shut down, the Commission is well22

aware that there has been a significant amount of23

environmental qualification work ongoing on all of24

the nuclear fleets, in fact, to maintain the25

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integrity and the barriers between various1

systems.2

The KPMG report as it currently is3

produced would suggest that in the absence of any4

impediment, if you like, any safety impediment,5

the proposal would be that we would couple all of6

the steam lines from all of the reactors together7

to ensure that regardless of which unit was on8

outage there was a consistent steam supply.9

We believe from our own evaluation10

- we have not asked CNSC staff - from our own11

evaluation of how that sort of coupled12

configuration could compromise the very costly and13

comprehensive EQ programs we are conducting on the14

site, we see those things to be in direct15

conflict.16

The potential exists because of17

the pressure differentials, et cetera, through the18

re-boiling that under a boiler tube leak scenario19

from any of the reactors we could end up with20

tracheated steam being delivered off-site and,21

clearly, that would compromise our safety barrier. 22

So that was our initial view with respect to the23

steam option.24

In addition to that, as I said25

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initially, there is no excess steam from Bruce B1

either and so any steam diverted would be to the2

detriment of the turbine efficiency.3

The matter of electrical supply,4

the same sort of issue here. In order to provide5

a tee-off - forgetting Robin's comment about6

wholesale and retail - the technical manner, an7

evaluation was conducted to consider when it may8

be possible to tee-off from the station electrical9

supplies.10

There are many safety case11

constraints about Class 4 power and the12

reliability of nuclear systems. In order to13

suggest a manner by which we could tee-off from14

those supplies, we would have to warrant and15

guarantee all of the electrical supply systems16

that are hanging off that and that would include17

everything at the Energy Centre to be nuclear18

grade. Clearly, again, there would be an enormous19

safety case implication and, you know, we, from20

our only initial overview of this, we see that as21

a potential conflict with the overall reliability22

demands of the electrical supply systems for the23

site.24

Just to reiterate what Robin said,25

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we did however, in the same way we have treated1

our employees here, we have sought to ensure a2

seamless transition and all of the contracts, all3

of the services provided to all of the off-site4

communities are guaranteed by Bruce Power as a5

seamless transition as part of this process.6

MR. JEFFREY: And finally, we are7

very sympathetic, we have been working with groups8

of people here. I have offered to Mayor Kraemer9

of Kincardine that I would be entirely willing to10

join with him in the presentation to the11

provincial Minister of Energy or the provincial12

Minister of Finance, if it is public policy in13

Ontario, to look for provincial subsidies in order14

to ensure the ongoing viability of these units.15

THE CHAIRPERSON: Realizing that16

the safety of Bruce Power under our Act, that it17

is really the company's responsibility to have a18

safety culture and a safety program that is above19

and beyond really what is required by the20

Commission, I just think that that's important to21

recognize that.22

Just one more point on this line23

of questioning. CNSC staff, do you have any24

comments on Bruce Power, just with regards to25

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safety?1

MR. BLYTH: My only comment would2

be that Bruce Power has primary responsibility for3

safety and if they feel that the safety of the4

plant is compromised, they should certainly not be5

approaching us for approvals.6

THE CHAIRPERSON: In order to be7

expedient, I'm not going to rule on the8

admissibility of the questions or whatever at this9

time. What I would like to do is move to10

Commission questions with regards -- you gave us11

an original presentation as well, and the12

Commission is very interested in the relationship13

of Bruce Power to the community in general and we14

think that that is important, and so I will open15

the floor to questions from the Commission Members16

in the broad sense of the relationship with the17

community, et cetera, and the material in your18

presentation in general, but not with regards to19

the request that you made, okay.20

MR. MacGREGOR: Thank you.21

THE CHAIRPERSON: So the floor is22

now open for questions.23

Okay, thank you very much.24

MR. MacGREGOR: Thank you.25

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THE CHAIRPERSON: The next1

presentation is an oral presentation by Bruce2

Community Development Corporation as outlined in3

CMD Document 01-H6.12, and I believe that Ms4

Fisher is with us today.5

MS FISHER: That's right.6

THE CHAIRPERSON: Thank you very7

much for joining us and the floor is now yours.8

9

01-H6.1210

Oral Presentation by the Bruce Community11

Development Corporation12

MS FISHER: Well, thank you very13

much, Madam Chair and other Commissioners, number14

one for coming to Kincardine to hold these15

Hearings.16

I guess the precedent was set a17

few Hearings ago and I'm glad to see that you will18

take the time and allow so many people to be able19

to attend to hear these. It's very valuable for20

the community as well. So thank you very much.21

The Bruce Community Development22

Corporation (known as the Bruce CDC) wishes to23

thank the CNSC for the opportunity to comment on24

Bruce Power Inc.'s operating licence application25

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as it relates to the Bruce Nuclear Power1

Development site.2

My name is Barb Fisher and I am3

here today in the capacity as Chair of the Bruce4

Community Development Corporation.5

I should note that through the6

past quarter century -- that seems like a long7

time -- and a few different career profiles, I8

have been particularly active in the South Bruce9

Lakeshore Area with direct experience in issues10

and efforts related to Ontario Hydro/Ontario Power11

now known, the Bruce Energy Centre (industrial12

park), the community and their13

inter-relationships.14

The Bruce CDC is also a member of15

the South Bruce Impact Advisory Committee which16

made an earlier presentation today.17

The Bruce CDC is a federally18

affiliated not-for-profit corporation governed by19

a volunteer Board of Directors. Industry Canada20

provides contribution funding through its21

Community Futures Program to enable the Bruce CDC22

to undertake activities consistent with its23

mandate to assist with Community Economic24

Development strategies.25

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The Bruce CDC has a fourteen-year1

history in initiatives including small business2

financing and support, strategic planning, tourism3

product development and efforts to enhance4

industrial development opportunities.5

So you can see by that length of6

time that we have had the ups and downs and the7

flows with the things that have happened in and to8

our community as it relates to BNPD site9

employment. However, the CDC has always been10

supportive of the efforts to move forward.11

The licensing request before the12

CNSC (if approved) represents the first private13

sector entrance into the nuclear generation14

industry in Canada and in Ontario. As such, it15

demands the same stringent due diligence16

consideration to ensure that the safety of17

workers, residents and communities are not18

jeopardized.19

Bruce CDC fully endorses the past20

and present high safety standards to protect the21

interests of not only the BNPD site and its22

workers, but also that of the broader community23

and environment.24

Bruce Power, as the licence25

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applicant, has to date demonstrated their1

commitment to those values that guide their2

relationship with the community. Since the July3

11, 2000 lease announcement between OPG and Bruce4

Power, BPI has progressed with establishing a5

corporate-community presence.6

Some examples of how has been7

achieved include:8

Full briefing of municipal and9

community leaders in July, 2000 regarding the BNPD10

lease announcement as well as media briefings; the11

public dissemination of information packages to12

over 500 community stakeholders, organized two13

Town Hall public meetings and participated on the14

local "OpenLine" radio show; they launched a Bruce15

Power web site that provides information,16

articles, newsletters and corporate information;17

and participates in the Kincardine Economic18

Development Committee and maintains lines of19

communication with other economic development20

agencies.21

Related to the CNSC Hearings,22

Bruce Power has taken steps to highlight the CNSC23

process, timing and contacts.24

Further, they have provided25

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opportunities to discuss the Bruce Power Plan with1

interested community members. These have included2

a reception for community and municipal leaders to3

discuss the Bruce Power Licence Application4

process, postcard mail-out to every household5

noting the CNSC Hearings and contact information;6

posting the Bruce Power CNSC submission on the7

website as well as making available to libraries a8

range of information and reference material9

pertaining to the lease agreement and the CNSC10

Hearing information; offers to meet with community11

representatives and municipalities to discuss and12

clarify issues; and provide direct mail to various13

community stakeholders regarding the upcoming CNSC14

Hearings.15

This morning there was a question16

with regards to the general acceptance of the17

community with regards to those activities and I18

would like to confirm the positive response by the19

community in support of this transition.20

In our day-to-day work we are21

throughout the community almost on a daily basis22

involved in almost every sector and subcommittee23

that might exist around, and I can tell you that24

there is very wide and broad acceptance and25

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support for what is happening.1

Bruce Power has also participated2

in several community events including: United Way3

contribution to supply local food banks;4

sponsoring events with the Women's House of Bruce5

County and Women's Centre in Owen Sound; donating6

hockey apparel and assistance with fundraising7

related to youth hockey teams from each of Saugeen8

and Nawash First Nations; participating in9

fundraising for the Bluewater Summer Playhouse10

theatre; a major sponsorship in the first annual11

Kincardine Super Cities Walk for Multiple12

Sclerosis.13

Based on such activities, it is14

evident that Bruce Power intends to continue with15

the local tradition established by Ontario Hydro16

and OPG of maintaining strong communication links17

with community stakeholders, as well as being an18

active corporate member of the community.19

Bruce Power has also been direct20

in its discussion with municipal and community21

representatives regarding:22

Safety - being the pinnacle23

priority with assurance that safety will not be24

compromised. An example of this is the25

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establishment of the Watchdog "Safety Advisory1

Committee" of the Bruce Power Board of Directors;2

Regarding productivity - the need3

for continuous safety and productivity improvement4

and their undertaking to proceed with improvement5

programs initiated as part of the NAOP process;6

Regarding staffing - completion of7

the labour/skills inventory and plans to recruit8

and train the next generation of nuclear workers.9

As well, BPI has confirmed that10

they have established a strategic alliance with11

OPG to ensure access to needed technical expertise12

through transition. Given the parameters of the13

deregulation legislation, it is in the mutual best14

interest of Bruce Power and OPG to complement each15

other.16

This, combined with Bruce Power's17

proven track record in transitioning nuclear18

plants, offers the necessary level of confidence19

that this challenge will be met while maintaining20

and exceeding safety considerations;21

Organizational culture -22

proceeding with strategies to invest in workers23

thus contributing to corporate success;24

And I, like some of you on the25

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Board Commission today, have been to many of the1

hearings in the past and I'm very pleased with the2

presentation made by both the Society and the3

Power Workers' Union and the change that has4

happened, and I think that is due largely to a lot5

of work done by Bruce Power to make that6

successful, and it's well recognized in the7

community as well.8

And regarding the recovery of9

Bruce A - that upon detailed assessment and10

business case development, a decision will be made11

as to if recovery is financially viable.12

Bruce CDC welcomes Bruce Power to13

the community and has no hesitancy in endorsing14

their CNSC operating licence application to15

operate the Bruce A and Bruce B Nuclear Generation16

Stations.17

Bruce CDC anticipates that the18

transfer of operating responsibilities and assets19

to Bruce Power will not only return Bruce B to20

world-class nuclear generation levels, but will21

provide the best possible opportunity for the22

re-investment of capital, including the recovery23

of Bruce A units. This action would signal a24

long-term commitment to the BNPD site as well as25

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help to stabilize the economic swings suffered1

over the past several years.2

Further, Bruce CDC is optimistic3

that the transfer of decision-making to a Bruce4

Power corporate head office situated in the5

community will result in improved cooperation and6

pro-active participation in the industrial7

diversification of the South Bruce Lakeshore area.8

There are inherent features and9

economic opportunities that are presented by10

virtue of being adjacent to one of the largest11

nuclear facilities in the world. Bruce CDC is12

expectant that Bruce Power will become an active13

and enabling partner in the industrial14

diversification model as proposed by Integrated15

Energy Development Corporation.16

This model for industrial17

development has been well studied and articulated18

in several reports and presentations (most19

recently AGRA Earth and Environment as well as20

KPMG).21

Integrated Energy Development22

Corporation (IEDC) is present today and has made23

submission to the CNSC. It is noted that this24

industrial development priority was re-affirmed in25

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the 1999 South Bruce Economic Diversification1

Strategy.2

This industrial model has the3

support of the Municipality of Kincardine, other4

communities in Bruce and Grey as well as various5

economic development interests. Such an6

industrial strategy is a key component to moving7

beyond local economic dependency on the BNPD site8

for long-term community economic health and9

safety.10

I would like to take a few moments11

to highlight to the CNSC an outstanding concern of12

the South Bruce Lakeshore community. Upon first13

review, it may appear that the following points14

fall outside the purview of CNSC's consideration.15

Community safety factors must16

incorporate community economic health and safety. 17

This is particularly relevant in a rural18

development that is highly impacted by activities19

and decisions of the single major employer in a20

geographic region. As an agency with21

responsibility to assist with community economic22

development, the Bruce CDC is concerned with how23

economic activities and issues impact the24

long-term social and economic conditions of the25

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community.1

A brief review of history may be2

appropriate at this juncture.3

1960 - Ontario Hydro began initial4

nuclear construction at Douglas Point.5

Mid-1980s - construction ended6

(3,800 jobs lost) with full transition to nuclear7

operations.8

1985 - recognizing the impact to9

the community, Ontario Hydro supported development10

of the Bruce Energy Centre as an economic11

diversification tool.12

1985-1990 - Ontario Hydro marketed13

Bruce Energy Centre internationally as an14

industrial location offering long-term electricity15

and steam rate enticements.16

This resulted in six companies17

investing over $50-million capital in new18

investment to start business operations.19

Early 1990s - Ontario Hydro policy20

was changed resulting in rural electricity rate21

charges applied to Bruce Energy Centre companies. 22

This was in spite of an OEB recommendation that23

the Bruce Energy Centre be provided with a special24

rate status.25

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Early 1990s-2001 - Development at1

the Bruce Energy stagnated due to lack of2

resolution related to long-term electricity3

pricing strategies. This resulted in no new4

investment activities and, more significantly, the5

loss of expansion investment by existing BEC6

companies.7

1998 - Electricity rate was8

reduced from rural rates to municipal rates9

following the Ontario Power Generation (Ontario10

Hydro) announcement of lay-up of Bruce A and11

transfer of 1000 workers.12

This rate remains in effect until13

"market opening" of the deregulated electricity14

market.15

Early 1990s to present - Time and16

resources have been invested by the community, the17

Municipality and the BEC developer toward18

developing needed strategies to address19

outstanding electricity and steam costing/supply20

issues. Feasible strategies have been identified;21

however, have not as yet secured the attention of22

OPG.23

The current status of the24

industrial ventures that chose to locate and25

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invest at the Bruce Energy Centre, based on1

long-term and cost-advantaged electricity and2

steam rates, is tenuous.3

This is due to the lack of a clear4

strategy to address electricity and steam5

cost/supply issues. There is a significant6

concern that the area may lose industrial7

diversification gains made over the past 20 years.8

The rationale for the BEC is as9

valid today as it was 20 years ago. The BEC model10

remains the best opportunity by which to attract11

industrial investment and contribute to economic12

health and safety.13

I think you might have just heard14

that from the previous presenter, and we're15

talking of the community. Throughout the course16

of today it's been highlighted a number of times,17

the concern with regards to the economic death of18

the company to be able to be there. We see it19

from a community perspective as the same thing,20

that there is economic safety and health and21

safety responsibility to the community as well.22

The Bruce CDC appreciates the23

complexities of the OPG/Bruce Power lease24

agreement and also the requirements to satisfy25

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regulatory and transitional diligence.1

However, one of the transitional2

items of specific interest to the community that3

is outstanding is that of the Bruce Energy Centre.4

Bruce CDC is requesting that OPG5

and Bruce Power secure the infrastructure6

necessary to deliver cost-advantaged electricity7

and steam as was originally intended and8

contracted for, and that is as it relates to our9

major employer as well.10

As previously noted, Bruce CDC11

acknowledges that although the current status and12

advancement of the Bruce Energy Centre falls13

outside the scope of the CNSC's primary focus, it14

is central to the diversification strategy that15

affords the community a level of economic16

confidence and health.17

As such, we felt it sufficiently18

important to digress from the typical CNSC19

submission. However, in spite of these comments,20

the Bruce CDC confirms it supports Bruce Power's21

application for licensing.22

Madam Chair, I thank you and the23

Commissioners for the opportunity to speak today.24

THE CHAIRPERSON: Thank you for25

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your presentation, and the floor is now open for1

questions from the Commission Members.2

There are no questions. Thank you3

very much.4

MS FISHER: Thank you.5

THE CHAIRPERSON: We'll now take a6

15- minute break.7

Mr. Martin, you can sit down, and8

we'll just take a 15-minute break and so that will9

be at 10 minutes to; is that right?10

Yes, ten to we will be back in our11

seats, thank you, and we will be very ready.12

--- Recess taken at 4:35 p.m.13

--- On resuming at 4:50 p.m.14

THE CHAIRPERSON: Ladies and15

gentlemen, could I ask you to please take your16

seats.17

The next hearing item is an oral18

presentation by the Sierra Club of Canada as noted19

in CMD Document 01-H6.13.20

Mr. Martin.21

22

01-H6.1323

Oral Presentation by the Sierra Club of Canada24

MR. MARTIN: Thank you. Good25

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afternoon, Madam Chair, Commissioners, ladies and1

gentlemen.2

And I know that you are very glad3

to see us, seeing that we are the last4

presentation.5

THE CHAIRPERSON: We are.6

MR. MARTIN: My name is David7

Martin and I'm accompanied today by my colleague8

Irene Kock. I'm going to cut this short a bit. 9

I'm here on behalf of the Sierra Club of Canada, a10

national environmental organization with about11

5,000 members.12

With regards to the documentation,13

we did eventually receive most of the balance but14

not in time to review and consider them before the15

deadline for supplementary submissions last week.16

With regard to Bruce B Safety17

Issues: CNSC staff chose not to review the current18

status of the many outstanding safety issues at19

Bruce B or the status of the Integrated20

Improvement Program (IIP). Staff suggest that21

Commissioners ignore these issues until fall 200222

and that a two-and-a-half-year licence be provided23

expiring in the fall of 2003.24

There is ample evidence that these25

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issues should not be ignored. The previous staff1

report, 00-M51 entitled "Mid-Term Report on the2

Performance of Bruce NGS B", of September 19th,3

2000, as you know, gave only a "conditionally4

acceptable" rating to fifteen issues, including5

fire protection, maintenance backlogs, management6

of aging of station components, staff training and7

qualification, and radiation protection programs,8

amongst other issues.9

A report on the IIP programs,10

00-M61.1, from October 2000, raised concerns about11

the competition for resources between normal12

operations and maintenance and the IIP programs,13

as well as noting that the IIP projects as a whole14

are two years behind schedule.15

A baseline of information on16

outstanding safety issues and IIP project status17

is needed from which to judge safety issues under18

the lease arrangement between OPG and Bruce Power. 19

These safety issues are relevant regardless of20

which company operates Bruce B and must be21

disclosed as part of the CNSC review of the Bruce22

Power licence application. It is unacceptable to23

approve the licence application and allow24

important safety issues to be subject to back-room25

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deals. The public deserves to know the real risk1

of these aging reactors that are being placed for2

the first time under private control.3

And I'll note that we did receive4

a copy of CMD 01-H6.36 about two weeks ago which5

is OPG's own review of performance and operations,6

but this is from the licensee's perspective only.7

With regard to Contracting out and8

Staffing Issues: Bruce Power intends to contract9

out certain CANDU-specific technical support work10

to AECL and OPG. This raises the compounded11

problem of inadequate quality assurance programs12

at both AECL and OPG. The inadequacy of those13

programs has been repeatedly documented by the14

CNSC, coupled with an untested quality assurance15

program run by a new company, namely, Bruce Power.16

In addition, OPG and Bruce Power17

will be competitors if Bruce Power receives a CNSC18

licence to operate Bruce B. While this conflict19

of interest for OPG as a key contractor to its20

main competitor is loosely identified, no specific21

measures are set out to address the sense for both22

companies to address the matter.23

Bruce Power states that "sharing24

of generic support makes good business sense for25

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both companies." That's in slide 16 of CMD1

01-H6.1. However, this seemingly friendly2

business climate between the two companies may3

quickly sour, once the restructured electricity4

sector in Ontario is actually launched.5

Other concerns include issues such6

as Bruce Power's internal capability of7

supervising and assessing technical support work8

which it contracts out. This issue of technical9

competence within the licensee's own organization10

was identified by the U.K. nuclear regulator in11

its 1999 report on British Energy, Bruce Power's12

main parent company. The "Safety Management13

Audit" report by the Nuclear Installations14

Inspectorate (NII) was carried out to assess the15

effect of staff downsizing undertaken by British16

Energy on the safety of its nuclear stations. The17

NII concluded that British Energy was relying too18

heavily on contractors to fulfill its19

safety-related obligations and had undertaken20

excessive downsizing.21

While Bruce Power states that it22

will retain all existing staff at the Bruce Site,23

as well as some from OPG head office, it has also24

acknowledged that retirement of staff over the25

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next ten years will considerably reduce the size1

of the Bruce work force by attrition.2

And I note that we heard this3

morning from Bruce Power that fully one-half of4

the staff will be retiring.5

Bruce Power seems to be assuming6

that the potential staff shortages will also be7

offset by increased staff productivity.8

This leads to another concern that9

was addressed by the NII Audit of British Energy. 10

The NII report concluded that the "management of11

change" process was in effect being used to12

rationalize staff reductions after the fact. The13

NII also found cases of staff working significant14

overtime and evidence of the under-reporting of15

overtime.16

CNSC staff state that the Bruce17

Power "management of organizational change"18

documentation is based on the modified British19

Energy process which reportedly responds to the20

NII Audit findings. A February 5th, 2001 request21

by Sierra Club for a selection of references22

included reference No. 14 of CMD 01-H6, the23

British Energy response to the NII Audit findings. 24

And I'll just note that this document was received25

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last week and includes primarily time lines for1

addressing the 100 plus NII recommendations and2

has no substantive information.3

Guarantees must be put in place to4

ensure that the age-related attrition of the Bruce5

Site work force is managed in a way that does not6

reduce the margin of safety, regardless of which7

company operates the plant. It remains to be seen8

whether Bruce Power's "management of change"9

program will be able to prevent an erosion of10

safety due to staff retirement, coupled with an11

over-reliance on productivity improvements in the12

remaining workers.13

With regards to MOX Plutonium14

Fuels: The Sierra Club accepted an invitation from15

Bruce Power to meet to discuss the licence16

application and related issues at a meeting on17

March 16th, 2001. At this meeting, Bruce Power18

representatives would not rule out the possibility19

of using mixed oxide-plutonium fuel at the Bruce20

nuclear stations in the future. While the full21

proposal to import mixed oxide-plutonium fuels22

from the U.S. and Russia for use in Canadian23

reactors may not be implemented for a number of24

years, a controversial testing program is25

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presently underway at AECL's Chalk River Nuclear1

Laboratories, and the Canadian government avidly2

supports the use of mixed oxide-plutonium fuel.3

There are a number of outstanding4

concerns regarding the oxide-plutonium fuel import5

plan, including transportation and reactor6

hazards, as well as civil liberty and7

international security issues. The Sierra Club8

requests that the CNSC institute a condition on9

the Bruce Power licences to prevent the testing or10

use of mixed oxide-plutonium fuel at the Bruce11

Nuclear Stations. A formal licence amendment12

should be required in order to do so, and we ask13

that the CNSC make a commitment at this time, to14

require full public hearings by an impartial Panel15

as defined under the Canadian Environmental16

Assessment Act prior to approving a licence17

amendment for testing or use of mixed18

oxide-plutonium fuel at the Bruce Nuclear19

Stations.20

Finally, in conclusion, we have21

heard today that "Safety First" should be the22

by-word. Certainly we agree in principle. In23

practice we believe that the way to achieve this24

is to withhold the licence until there is closure25

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and resolution on key safety issues.1

And, in summary, this submission2

discusses three main areas. First, the3

undisclosed safety status of the Bruce B nuclear4

station.5

There are numerous unresolved6

safety issues at Bruce B, seen in the7

"conditionally acceptable" ratings by CNSC staff8

in previous reports.9

Madam Chair, as you yourself10

observed this morning, there has been very little11

change in progress at Bruce B. In addition, there12

has been a two-year delay in the Integrated13

Improvement Program and reorganization of the IIP14

with the transfer from OPG's head office back to15

the nuclear station sites. The IIP projects have16

incorporated CNSC safety-related requirements, so17

these delays definitely have safety implications.18

These issues are not adequately19

addressed in the current licence application20

documentation. The existing licence expires in21

fall 2001 and the safety performance of Bruce B22

should be reviewed in detail on the current23

licence schedule.24

Secondly in summary, effects of25

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contracting and staffing policies on reactor1

safety: The record of British Energy, Bruce2

Power's main parent company in the UK with respect3

to contracting out of safety-related services and4

excessive downsizing of the work force raises5

concerns about similar potential trends at the6

Bruce stations.7

Downsizing at the Bruce nuclear8

stations caused by retirement of a significant9

part of the existing work force, coupled with10

pressure for increased staff productivity by Bruce11

Power, may result in reduced overall safety. 12

Regardless of which parent company holds the13

licences, the licensee should be required to14

provide assurances that it will maintain15

appropriate staff levels and training programs, as16

well as the internal capability to supervise and17

assess technical support work which it contracts18

out. Bruce Power should not be allowed to rely on19

its competitor, OPG, for contract services for20

safety-related technical support work.21

And finally, mixed oxide-plutonium22

fuel use at the Bruce nuclear stations: The23

testing or use of mixed oxide-plutonium fuel at24

the Bruce nuclear stations which has not been25

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ruled out by Bruce Power must not be allowed to1

proceed without a licence amendment, as well as2

full public hearings by an impartial Panel as3

defined under the CEAA.4

The CNSC should provide this5

assurance now, given the outstanding safety and6

security issues related to this controversial7

program.8

I thank you for your patience and9

we would be pleased to answer any questions you10

might have.11

THE CHAIRPERSON: Thank you very12

much, Mr. Martin.13

The floor is now open for14

questions from the Commission members.15

Dr. Giroux?16

MEMBER GIROUX: Yes, I have two17

questions. The first one, I would like to explore18

a bit more your statements about the dangers of19

competition between OPG and Bruce Power and the20

fact that they might have a sort of service21

agreement that might be compromised by22

competition.23

Could you spell out a bit more the24

mechanics that you see and how this could be25

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prevented?1

MR. MARTIN: Well, I mean, I think2

you'd agree it's kind of a strange situation, this3

cooperation between nominal competitors, and I4

think the risks are somewhat obvious.5

We heard from Mr. Drinkwater this6

morning suggesting that other nuclear competitors7

cooperate. I'm not personally aware of such8

activities, but if true, the nuclear industry is9

certainly unlike any other industry I know.10

And the other thing I would note11

is that under the Ontario government's market12

power mitigation agreement, the Bruce lease is13

rationalized. I mean, you know, part of the14

reason for this happening is the introduction of15

competition.16

So, you know, I think these should17

raise serious questions in the minds of the18

Commission. I don't know if that's helpful.19

MEMBER GIROUX: Thank you. Well,20

that answers a question.21

My other question is for staff and22

that's concerning the testing of MOX and using of23

MOX fuel.24

Am I not right that there is de25

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facto the proposed licence that there would be no1

possibility to use MOX fuel; is that correct?2

MR. BLYTH: The proposed licence3

and all de facto power reactor licences have a4

condition in the licence that the fuel design5

cannot be changed without the approval of the6

CNSC, and certainly introduction of MOX fuel would7

be a major design change, so it could not be done8

without approval.9

MEMBER GIROUX: Would that be a10

formal amendment to a licence that would have to11

be approved by the Commission and discussed in a12

public hearing?13

MR. BLYTH: The licence would not14

require us to go to a public hearing. Having said15

that, the Minister of Natural Resources of Canada16

has said that before this would happen there would17

be public inquiries in accordance with the18

requirements of Acts like CEAA and things like19

that.20

So, yes, it would happen. By the21

letter of the licence it's not necessary, but in22

this case it would clearly happen.23

MEMBER GIROUX: Thank you.24

THE CHAIRPERSON: Other questions. 25

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Ms MacLachlan?1

MEMBER MacLACHLAN: This is a2

question to staff.3

On page 1 of the Sierra Club's4

submission they state that:5

"CNSC staff chose not to6

review the current status of7

the many outstanding safety8

issues at Bruce B, or the9

status of the Integrated10

Improvement Program.11

Staff suggest that12

Commissioners ignore these13

issues until fall 2002 and14

that a two-and-a-half-year15

licence be provided expiring16

in the fall of 2003."17

May I please have your response to18

that statement?19

MR. BLYTH: Yes. Well, I'll ask20

Peter Elder to respond.21

MR. ELDER: CNSC staff did review22

the current safety issues associated with Bruce23

and there was a list of significant issues in CMD24

01-H6.25

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CNSC staff did not discuss the1

current status of all these issues since a2

detailed status report would largely be discussing3

the performance of the current licensee, Ontario4

Power Generation, rather than Bruce Power who is5

the Applicant before you today.6

CNSC staff did confirm that Bruce7

Power was aware of the current issues and had8

commitments -- and of the commitments Ontario9

Power Generation had made to address these issues10

and that we are confident that the issues would11

progress at the same rate as they are progressing12

under Ontario Power Generation.13

I would note that Ontario Power14

Generation did submit a status report that you15

discussed this morning and that we do have a16

formal letter from Bruce Power saying that they17

agree that this report represents a baseline for18

the facility with respect to the overall plant19

status and progress and regulatory actions.20

CNSC staff will be using this as a21

baseline to report on Bruce Power's performance. 22

And that if we -- our feeling on the licence,23

length of the licence was that we needed enough24

time to make sure we were assessing Bruce Power's25

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performance and not Ontario Power Generation's1

performance.2

MEMBER MacLACHLAN: Thank you.3

THE CHAIRPERSON: Other questions?4

I just wanted to mention that we5

have taken note of your comments with regards to6

logistical issues in providing the materials, and7

we also heard from Mr. Kleinau as well in terms of8

some logistics, different ones, but some issues9

and I have directed the Secretariat to look at10

addressing those issues for you and you can be11

assured that we will endeavour to be more timely12

in the documents as well.13

So we appreciate you bringing14

those to our attention and ask you to continue to15

bring those to our attention.16

Okay.17

MR. MARTIN: Thank you for that.18

THE CHAIRPERSON: You're welcome.19

Any other questions or comments?20

Well, thank you very much for your21

presentation and we will now move to the written22

submissions that we have.23

24

Written Submissions25

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I would first of all like to note1

for the record and for those people that are2

represented here today that just did written3

submissions that are not doing oral submissions,4

that Commission members take these documents very5

seriously and they do read every one of them and6

make comments on them, so we do take them into7

account. We'd like to thank those people that8

have taken that time to submit their written9

submissions to us for considering that the10

Commission needed to know that information.11

So thank you very much and I would12

like to have that in the record.13

So now I'm going to go through the14

documents and ask after each one if there's any15

comments from the Commission members. We will not16

have necessarily the oral, the questioning part,17

but we will have perhaps some comments on that. 18

So I will proceed with that.19

20

01-H6.1421

Written submission from County of Bruce22

THE CHAIRPERSON: Starting with23

Document H6.14 The County of Bruce. Are there any24

comments?25

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--- No response1

2

01-H6.153

Written submission from Municipality of4

Kincardine; Office of the Regional Nuclear5

Emergency Planning Coordinator6

THE CHAIRPERSON: H6.15, the7

Municipality of Kincardine, the Regional Nuclear8

Emergency Planning Coordinator. Are there any9

comments?10

--- No response11

12

01-H6.1613

Written submission from Business Improvement Area14

THE CHAIRPERSON: Document H6.16,15

Business Improvement Area. Are there any16

comments?17

--- No response18

19

01-H6.1720

Written submission from Bruce Hydro Retirees21

Association22

THE CHAIRPERSON: Document H6.17,23

Bruce Hydro Retirees Association. Any comments?24

--- No response25

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01-H6.181

Written submission from The Corporation of the2

Municipality of Arran-Elderslie3

THE CHAIRPERSON: Document H6.18,4

Corporation of the Municipality of5

Arran-Elderslie? Are there any comments?6

--- No response7

8

01-H6.199

Written submission from The Corporation of the10

Township of Huron-Kinloss11

THE CHAIRPERSON: Document H6.19,12

Corporation of the Township of Huron-Kinloss. Any13

comments?14

--- No response15

16

01-H6.2017

Written submission from Kincardine and District18

Chamber of Commerce19

THE CHAIRPERSON: Document H6.20,20

Kincardine and District Chamber of Commerce. Are21

there any comments?22

--- No response23

24

01-H6.2125

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Written submission from Mr. John Bennett1

THE CHAIRPERSON: Document H6.21,2

Mr. John Bennett. Are there any comments?3

--- No response4

5

01-H6.226

Written submission from Kincardine Township,7

Tiverton Public School Home and School Association8

THE CHAIRPERSON: Document H6.22,9

Kincardine Township, Tiverton Public School Home10

and School Association. Are there any comments?11

--- No response12

13

01-H6.2314

Written submission from Municipal Electric15

Association16

THE CHAIRPERSON: Document H6.23,17

Municipal Electric Association. Are there any18

comments?19

--- No response20

21

01-H6.2422

Written submission from Citizens Action Coalition23

of Indiana24

THE CHAIRPERSON: Document H6.24,25

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Citizens Action Coalition of Indiana. Any1

comments?2

MEMBER GIROUX: Yes.3

THE CHAIRPERSON: Dr. Giroux.4

MEMBER GIROUX: The letter states5

that the primary Owner of Ontario Power Generation6

is British Energy.7

I would like to just comment that8

this comes from Indiana now but they might have9

done better research.10

THE CHAIRPERSON: Any further11

comments?12

13

01-H6.2514

Written submission from One Sky-Canadian Institute15

of Sustainable Living16

THE CHAIRPERSON: Document CMD17

Document 6.25, One Sky-Canadian Institute of18

Sustainable Living. Any comments?19

--- No response20

21

01-H6.2622

Written submission from the Association of Major23

Power Consumers of Ontario24

THE CHAIRPERSON: Document 6.26,25

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Association of Major Power Consumers of Ontario. 1

Any comments?2

--- No response3

4

01-H6.275

Written submission from Don't Waste Michigan6

THE CHAIRPERSON: Document 6.27,7

Don't Waste Michigan. Any comments?8

--- No response9

10

01-H6.2811

Written submission from Don't Waste Michigan,12

Grand Rapids13

THE CHAIRPERSON: Document 6.28,14

Don't Waste Michigan, Grand Rapids. Any comments?15

--- No response16

17

01-H6.2918

Written submission from Lone Tree Council19

THE CHAIRPERSON: Document H6.29,20

Lone Tree Council.21

--- No response22

23

01-H6.3024

Written submission from Stakeholders' Alliance for25

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Electricity Competition & Customer Choice1

THE CHAIRPERSON: Document H6.30,2

Stakeholders' Alliance for Electricity Competition3

and Customer Choice. Are there any comments?4

--- No response5

6

01-H6.317

Written submission from Ontario Legislative8

Assembly9

THE CHAIRPERSON: Document H6.31,10

Helen Johns, MPP, from the Ontario Legislative11

Assembly, the MPP for Huron Bruce. Is there any12

comments?13

--- No response14

15

01-H6.3216

Written submission from Municipality of Northern17

Bruce Peninsula18

THE CHAIRPERSON: Document CMD19

6.32, Municipality of Northern Bruce Peninsula. 20

Is there any comments?21

--- No response22

23

01-H6.3324

Written submission from Canadian Nuclear25

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Association1

THE CHAIRPERSON: Document 6.33,2

the Canadian Nuclear Association. Are there any3

comments?4

MEMBER BARNES: Yes.5

THE CHAIRPERSON: Dr. Barnes.6

MEMBER BARNES: I refer to the7

third paragraph there which indicates that British8

Energy has entered into an agreement to lease9

facilities for an initial period of 18 years with10

an operation to extend for 25 years, i.e., up to11

43 years; is this correct?12

MR. JEFFREY: Yes, it is.13

MEMBER BARNES: And given the14

current age of the reactors, how do you see the15

long-term use of these facilities over that sort16

of period?17

MR. JEFFREY: Well, clearly the18

extension of the lease beyond the 18 years takes19

us to a 40-year life.20

MEMBER BARNES: Yeah.21

MR. JEFFREY: And it would require22

an application for plant life extension.23

It's interesting, when you look24

around the world at the present, the way in which25

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nuclear power plants are now applying for plant1

life extensions.2

If you look in the United States,3

for example, there have been a number of plant4

life extensions already lodged with the NRC and5

the approval given. I think it's estimated that6

80 out of the hundred U.S. nuclear plants will7

probably apply and receive a plant life extension8

which takes them from 40 years operating life to9

60 years operating life.10

Based on the due diligence which11

we have carried out, we do believe there is a12

realistic possibility at the appropriate time of13

carrying out all the necessary engineering work14

and making an appropriate submission at that time.15

But it would be premature at this16

stage to say anything that is absolutely definite17

about that. It would require a lot of engineering18

work closer to the date.19

MEMBER BARNES: Yes. Thank you. 20

That was an interesting comment.21

THE CHAIRPERSON: Any further22

comments on the Canadian Nuclear Association?23

--- No response24

25

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01-H6.341

Written submission from Citizens for Alternatives2

to Chemical Contamination of Michigan3

THE CHAIRPERSON: Moving then to4

CMD Document 6.34, Citizens for Alternatives to5

Chemical Contamination of Michigan. Any comments6

or questions?7

Any comments?8

Yes, Ms MacLachlan.9

MEMBER MacLACHLAN: Yes, thank10

you. I have a comment that I would like to direct11

to staff.12

In the second paragraph, page 2,13

the submission states, and I quote:14

"Nuclear power plants emit15

noxious radioactive gases and16

wastes to both the air and17

water, many of which18

concentrate in the food19

chain, some of them thousands20

of times, some hundreds of21

thousands of times."22

Would you comment on that23

statement, please.24

MR. BLYTH: Yes, thank you. I'll25

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pass that question to Dr. Patsy Thompson from our1

Radiation and Environmental Protection Group.2

DR. THOMPSON: Yes, the3

assessments that have been conducted --4

THE CHAIRPERSON: Closer, Dr.5

Thompson.6

DR. THOMPSON: It's a problem when7

you're as short as I am and the wire is so -- the8

assessments that have been conducted at the Bruce9

stations as well as at the other stations indicate10

that the releases of radioactive materials to the11

environment are at very low levels and have not12

had any documented or predicted environmental13

effect.14

Of the radionuclides that are15

emitted either to the atmosphere or to the Great16

Lakes, the only one to my knowledge that has a17

bio-cumulation potential is cesium with a18

bio-cumulation potential of about 3000.19

In terms of the other20

radionuclides they don't tend to bio-concentrate21

in the food web the way organic contaminants22

would, for example. So there's a comment on23

tritium here and tritium does not bio-cumulate in24

the food chain and in organisms in general.25

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MEMBER MacLACHLAN: Thank you. 1

And I have a second question, if I may.2

This is something that -- this is3

a question I would like to address to staff. It4

is an issue that has occurred elsewhere but it is5

also highlighted in this submission as well.6

My question is this: What legally7

enforceable tool or mechanism or instrument do you8

intend to use to require OPG to decommission the9

Bruce facility?10

And the ancillary question is: 11

What financial instrument -- we talked a bit this12

morning about letters of guarantee, financial13

guarantees, but there are other instruments as14

well. Those other instruments are stated in the15

policy document for decommissioning.16

Could you please comment on that,17

please.18

MR. BLYTH: Yes, thank you. I19

will pass that question to Dr. Ken Pereira,20

Director General of Fuel Cycle.21

DR. PEREIRA: Thank you. Under22

the terms of the lease that have been signed23

between Bruce Power and OPG the responsibility for24

decommissioning and for financial guarantees25

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remains with Ontario Power Generation.1

Ontario Power Generation has2

proposed that a consolidated financial guarantee3

be provided for all of the current Ontario Power4

Generation facilities.5

To address that issue, Ontario6

Power Generation has supplied to the CNSC7

preliminary decommissioning plans for all of the8

facilities. CNSC staff have reviewed those9

preliminary decommissioning plans and has provided10

comments back to Ontario Power Generation for the11

nuclear power stations.12

What is left to do is for us to13

review the decommissioning plans for some of the14

waste facilities and then to also review the15

financial guarantees that would be required to put16

into practice those decommissioning activities.17

And so the responsibility for18

decommissioning and for putting in place financial19

guarantees rests with Ontario Power Generation.20

Staff will be coming to the21

Commission later this year with a proposal on how22

to proceed about putting in place financial23

guarantees based on our review of the financial24

aspects of the decommissioning proposals.25

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MEMBER MacLACHLAN: Thank you. I1

have a supplementary to that. I understand the2

consolidated approach to all of the facilities to3

which OPG is a licensee. They will not be a4

licensee for the Bruce facility.5

And I think it almost unfair to --6

I mean, we have a situation where OPG is or will7

be a private enterprise and its licensee will be a8

private enterprise. The Commission is not a party9

to the lease.10

I don't know -- I had the11

understanding that while the lease is an12

agreement, it is not a formal legal document at13

the moment, and I'm not sure that - and maybe you14

can comment on this also - whether or not the15

lease will be provided to the Commission and16

whether or not it will be appended to the licence17

for Bruce, but I don't see the lines of legal18

enforceability between the Commission and OPG with19

respect to the Bruce facility, and maybe you can20

clarify that for me.21

DR. PEREIRA: I can comment on22

that. I will let Mr. Blyth comment on the23

provision of the lease to the Commission, but24

under the terms of the lease and the agreement25

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between Bruce Power and OPG, OPG remains the Owner1

of the Bruce facility, the entire Bruce Nuclear2

Generating Station, and so if British Energy were3

to walk away from the installation, we the CNSC4

under the Nuclear Safety and Control Act could5

require the Owner to deal with the facility, to be6

responsible for the facility and to decommission7

the facility.8

So legally we can place an9

obligation on the Owner to act as required under10

the Nuclear Safety and Control Act.11

Mr. Blyth.12

MEMBER MacLACHLAN: Thank you. I13

look forward to the next response, but could you14

provide me, if not now, in the near future with15

the Section in the Act that allows the Commission16

to do that.17

MR. BLYTH: It's Section 16 -- 26.18

MEMBER MacLACHLAN: 16.26. Bingo!19

DR. PEREIRA: No, Section 26.20

MR. BLYTH: Yes, it is Section 2621

of the Act that gives us that authority, and we do22

have -- we have a copy of the lease. It was not23

our intention to append it to the licence, but we24

are in possession of the lease.25

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MR. ELDER: I will just add to it1

and how we expect the financial guarantee to be2

tied into Bruce Power's licence is that under the3

Regulations it is the licensee, that is Bruce4

Power, who has to provide us with the licence,5

with the financial guarantee.6

We have informed them we don't7

care how that guarantee - if it comes from a third8

party, that's all right, but it has to be informed9

that we can then tie it into their licence and10

have it attached firmly to the Bruce part and to11

cover the decommissioning of Bruce.12

MEMBER MacLACHLAN: And if I may,13

has the instrument been chosen? I mean, we spoke14

a little bit about -- sorry. We spoke a little15

bit this morning about the difference between a16

letter of comfort and a more enforceable17

instrument like a bond or a letter of credit or18

insurance.19

Has the particular instrument been20

recommended by staff at this point?21

MR. BLYTH: Not at this time.22

MEMBER MacLACHLAN: And can you23

please comment on the timing for your financial24

recommendation?25

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MR. BLYTH: Yes.1

Well, staff expect to be able to2

come to the Commission with a recommendation3

either at the August or the October meeting.4

Just a comment on the instrument,5

there is a CNSC guideline document on what would6

constitute an appropriate instrument, it's CNSC7

guide -- you have it there, okay, C206.8

MEMBER MacLACHLAN: Yes, thanks. 9

There are a number of alternatives in here. Thank10

you.11

THE CHAIRPERSON: Dr. Giroux.12

MEMBER GIROUX: Yes. I would like13

to follow up on the questions from Ms MacLachlan.14

Would it be appropriate to have in15

the licence an explicit statement about the16

ownership of OPG on the station and about OPG's17

remaining responsible towards the decommissioning?18

You said that the lease is19

referenced in the licence and the lease explicitly20

or implicitly states that, and I'm just wondering21

whether the licence itself should have some22

statements. What would be your view on that?23

MR. BLYTH: My view would be to24

err on the side of caution and seek legal advice.25

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It is -- the licence would be a1

licence -- if the Commission decides to issue a2

licence to Bruce Power it would be Bruce Power's3

licence and we would need to get legal advice to4

make sure that we had the necessary constraints on5

our requirements on OPG.6

I'm sorry I can't be clearer at7

this time.8

THE CHAIRPERSON: Thank you. Any9

further question?10

--- No response11

12

01-H6.3513

Written submission from Mr. John Kirby14

THE CHAIRPERSON: Then there15

remains one written submission which is O1-H6.3516

which is from Mr. John Kirby. Are there any17

comments or questions on Mr. Kirby's written18

submission?19

--- No response20

Since we considered H36 and 3721

earlier in the day, I don't intend to ask for22

further comments on those. That brings to the end23

the written submissions.24

As you will recall, I mentioned to25

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the applicant and to the staff and to OPG that I1

would be coming back in terms of some overview2

questions, and perhaps OPG would like to move3

forward again.4

So I'm opening questions to in5

fact the total day in terms of both oral and6

written submissions and I open the floor now for7

Commission Member questions.8

Dr. Barnes.9

MEMBER BARNES: Well, Mr. Martin10

and Sierra Club did raise the interesting issue of11

the so-called potential competition between OPG12

and Bruce Power.13

I just wondered, in a more general14

sense, do you see this as a problem? It could15

have come up at that particular Commission item.16

MR. JEFFREY: No, I don't see it17

as a problem at all. This morning we talked about18

the importance through the CANDU Owners Group to19

ensure that there was progression and growth of20

understanding of the engineering science which21

lies behind the CANDUs, the 22 CANDU reactors and22

indeed some of the overseas CANDU reactors as23

well.24

So I don't see there being any25

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conflict in terms of the underlying safety issues1

associated with engineering science or2

developments such as human factors or issues of3

that sort. These are generic.4

If you look, for example, at the5

United States, through organizations such as INPO,6

if you look world-wide through organizations such7

as WANO, there is an immense amount of cooperation8

and sharing and pooling of information regarding9

the safe operation of nuclear plants.10

If I draw on British Energy's own11

experience of the deregulation of the electricity12

industry in 1990, and then the restructuring of13

the nuclear industry in 1996, I think I can attest14

from first-hand experience the enormous15

cooperation that continues between, I call it,16

between the nuclear fraternity.17

We understand some of the issues18

which we generically face as an industry and we19

are determined to work together to ensure the safe20

and proper operation of the plants.21

MR. DRINKWATER: We agree with Dr.22

Jeffrey's assessment and, as I said this morning,23

I think we've looked at this and we've looked at24

the experience ourselves in the United States and25

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we think that it is compatible to have both1

competition and cooperation.2

THE CHAIRPERSON: Dr. Barnes?3

MEMBER BARNES: Just as a second4

comment, I missed the first Hearing Day of this so5

it may have come up then, but still some time has6

passed.7

In a number of the documents there8

has been of course the reference to potential9

start-up of the reactors in Bruce A, and this is10

not so much part of the licence, but would you11

care to make any comment at this point about your12

estimation of the company about that potential for13

start-up of at least two of the reactors in A?14

MR. JEFFREY: I'm very happy to do15

so, and I fully endorse the comment you've made16

that it's not part of the present licence17

application because that covers the Bruce A units18

and their current shutdown stage.19

We have spent over the past few20

months about $25-million Canadian in terms of21

doing a detailed engineering assessment of the22

state of Units 3 and 4. We went to the Bruce23

Power Board and to Cameco and to the British24

Energy boards with a proposal that the outcome of25

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this work was favourable and we believed, both1

from an engineering viewpoint and also from a2

market viewpoint, of bringing another 1,5003

megawatts of energy into the Ontario system that4

there was a sound business case for the restart of5

Units 3 and 4.6

We requested from the Bruce Power7

Board the authority to proceed to spend a further8

$30-million Canadian over the next few months and9

the Bruce Power Board agreed with the10

recommendation that there was a sound business11

case and we should proceed to commit that amount12

of money.13

At some stage along that path,14

having done that work, we will obviously be coming15

back to the Commission with a proposal regarding16

the restart.17

MEMBER BARNES: And do you have18

any comment on 1 and 2?19

MR. JEFFREY: Our focus at this20

point of time has been on 3 and 4.21

There are more significant issues22

associated with 1 and 2 and at this point of time. 23

Whilst we wouldn't categorically rule it out, we24

just want sensibly to get on and do what we are25

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confident we can do well.1

MEMBER BARNES: Thank you.2

THE CHAIRPERSON: Further3

questions from the Commissioners?4

I understand that Bruce Power has5

some of the financial data that was discussed this6

morning and perhaps I'll give you an opportunity,7

if you wish, to discuss that.8

MR. JEFFREY: And I would9

appreciate your advice on how you would like it10

presented, because it's rather a massive11

complication of complex figures. I will give a12

very top line on this.13

THE CHAIRPERSON: Right.14

MR. JEFFREY: It wasn't part of15

our submission. We had been asked questions from16

the Commission regarding certain aspects of the17

finances of British Energy and of Cameco. We have18

had that information researched and we have a19

statement which has been typed up.20

And the top level numbers is that21

Cameco have guarantees in respect of one other22

investment in addition to the Bruce investment. 23

The other investment is 140-million and the Bruce24

investment is 40-million, so the commitments25

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against parent company guarantees for Cameco are1

180-million.2

From British Energy plc, the3

parent company guarantees against the American4

plants -- sorry, I should have said all the5

numbers are millions of dollar Canadian, we've6

converted them all into a uniform base -- against7

British Energy plc, British Energy's commitment on8

the American plants is 156-million and against9

Bruce's is 222-million. So that adds up to10

380-million. So that was one of the answers. 11

That was one of the questions that was raised.12

The second question relates to the13

liquidity of both companies. David Gilchrist was14

able to quote the present year but there was a15

question asked of historical information.16

We have got information on both17

British Energy and Cameco that stretches back four18

years and the sums show on British Energy plc19

liquidity that varies between 1400-million, and at20

one point of time it gets up to 2-billion and at21

this point of time it's just under 1-billion.22

So over the four years it's varied23

from 1.4 up to 2, at this point of time it's just24

under 1-billion and that compares with the total25

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of 378 which is the total against AmerGen and1

Bruce.2

With respect to Cameco3

Corporation, it varies over the years from4

.5-billion to its presents level which is .8 of a5

billion, and that compares with Cameco's total6

parent company guarantees against their7

investments of 180-million.8

So those numbers I think confirm9

the ball-park numbers that David mentioned10

earlier.11

I would just like to clarify what12

we're talking here is the parent company13

guarantees to cover the eventuality that the units14

are closed down, all of them are closed down for a15

period of six months. That's the way in which16

that was calculated. So this is money that can be17

drawn at the request of the Board of Directors of18

Bruce Power from the parents.19

That is totally separate from an20

earlier discussion which we had on the funding of21

decommissioning. The arrangements for providing22

for decommissioning are quite separate. Through23

the lease, Bruce Power pays a sum of money through24

the lease on an annual basis to OPGI, that is25

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physical money, that's cheques, and in addition1

there are other payments of the variable element2

payment.3

The annual payment against the4

fixed element includes, amongst other things, the5

best industry estimates of what over the 18 years6

of the lease will amply provide for7

decommissioning. So decommissioning is physical8

money which is paid from Bruce Power to OPGI. And9

OPGI, as David Drinkwater mentioned earlier this10

morning, then have a back-to-back arrangement with11

the provincial government.12

I just wanted to clarify that13

those are two totally different types of money14

used for different purposes.15

THE CHAIRPERSON: Mr. Graham.16

MEMBER GRAHAM: You're saying that17

the U.S. contribution is 156, I think this morning18

you said it was 200 and I wasn't sure if that was19

200 Canadian or 200 U.S., but you say it's20

actually 156 Canadian?21

MR. JEFFREY: Yes, 156-million22

Canadian.23

MR. GRAHAM: Canadian. Just one24

other clarification. I think I gathered from your25

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answers you said that this money was set aside in1

case -- in the event that all four units were down2

for more than six months.3

MR. JEFFREY: Yes, for up to six4

months.5

MEMBER GRAHAM: Up to six months.6

MR. JEFFREY: It's to cover the7

O&M cost, it's to pay wages and operating costs.8

MEMBER GRAHAM: Does it have to be9

all four or if two were down, can you draw against10

this or is it only if all four?11

MR. JEFFREY: No, two things. One12

is the call-down of money will be at the13

discretion of the Bruce Power Board, so it is14

there to be called upon if cash is required by the15

Bruce Power Board to do essential work to bring16

the reactors back or to put them into a safe17

state, what have you.18

In calculating the sum of money19

required we have assumed a very pessimistic20

scenario because Duncan said that I think the21

maximum time period the reactors had ever all been22

out at the same time - was it six days? - nine23

days, so it's a very pessimistic assumption that24

there is no earning capacity from the plant25

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because all four of them are shut down.1

MEMBER GRAHAM: The only other2

question I have and I guess it is to CNSC staff,3

that the fact that there's has been fluctuation in4

the work statement anywhere from 1.4-billion down5

to 1-billion, or up to 2-billion, down to6

1-billion and that fluctuates substantially over7

the economy and the way the markets move and so8

on. Are you satisfied that the security of the9

222-million, you have the necessary security that10

you don't have to go to bonds or anything else or11

you have it secured?12

MR. ELDER: We looked at all this13

data that they are talking about during our14

review. Independently we went into their old15

annual reports and looked at how it varied over16

the last three years, and part of that variation17

-- because it varied is why we put into the18

licence condition an annual reporting requirement19

for Bruce Power to come back to us on an annual20

basis and tell us where they actually are so that21

we can monitor this and make a decision if it was22

an appropriate measure for the longer term.23

We are satisfied at the current24

time, and that's why we said for the current, this25

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current licence period we are satisfied, but we1

will be monitoring this data and in the longer2

term see if another mechanism may or may not be3

necessary.4

MEMBER GRAHAM: Is there anything5

in the licensing condition I guess that can change6

this amount or change the method in which it's7

secured over the duration of this licence period?8

MR. BLYTH: Well, we would have9

the option of amending the licence if we felt it10

was necessary. In that case, we would probably11

have to come to the Commission for the amendment. 12

So you would be in the loop.13

THE CHAIRPERSON: I just was14

reminded that OPG might have wanted to comment on15

Mr. Graham's earlier question.16

MR. DRINKWATER: Which earlier17

question is that? I did comment on the18

competition one.19

THE CHAIRPERSON: We just thought20

that you were trying to indicate that you wanted21

to get in after Dr. Jeffrey.22

MR. DRINKWATER: Well, I did want23

to make a comment on Commissioner MacLachlan's24

comments and questions around the decommissioning25

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fund, but if you're ready to take that I would be1

happy to make that comment.2

THE CHAIRPERSON: Ms MacLachlan,3

are you comfortable with that?4

MR. DRINKWATER: The question was5

about making sure and being satisfied there was a6

legal basis for ensuring that the commitment of7

OPG could be enforced relative to the8

decommissioning obligation that we are9

undertaking.10

And as staff have indicated11

earlier, they're in the process of commenting on12

decommissioning plans of OPG and we will be having13

interaction with staff around that, and then once14

those are determined there will have to be a15

determination of the issue of the financial16

guarantee, et cetera.17

Certainly from OPG's perspective18

we would be happy to work with staff during that19

period to come up with something that would give20

them and the Commission more comfort about the21

enforceability of that because OPG intends to22

stand behind that commitment.23

So we would be happy to try and24

work with staff over the coming months as they25

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look at this issue and come up with something that1

would give both staff and Commission Members more2

comfort.3

THE CHAIRPERSON: Further4

questions?5

I have a question to staff, and6

it's with regards to the fact that there will be7

an agreement in place between Bruce Power and8

Ontario Power Generation.9

If we issue a licence, what10

comfort could be included in the licence that11

would - "prevent" is the wrong word - that would12

"monitor" and have an opportunity to look at any13

changes in that agreement?14

The agreement will be signed, and15

what would give us comfort in terms of conditions16

on that area?17

Can they change the agreement18

between them during the licensing period and would19

we be aware of that in terms of the Commission and20

be able to comment on that or reflect on that?21

MR. BLYTH: There is a possibility22

that it's covered in the reporting requirements. 23

I suppose that could be formalized in terms of a24

licence condition, if necessary.25

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My colleague has suggested that it1

would not be inappropriate for the Commission to2

ask both OPG and Bruce Power to take on such a3

commitment.4

THE CHAIRPERSON: If they5

undertook that commitment, I guess the question6

would be what would be the mechanism by which the7

Commission would ensure that that would take8

place?9

MR. BLYTH: Some kind of periodic10

reporting mechanism or an obligation to inform us,11

the Commission, if there were changes to the12

agreement. There seem to be possible ways.13

THE CHAIRPERSON: Bruce Power,14

would you like to comment on that?15

MR. JEFFREY: Yes. Well, for our16

part we would be entirely prepared to agree to17

that as a licence condition.18

Could I just pick up the point19

though, the earlier point about the 222-million if20

that's having to be placed in bonds or securities21

not available to British Energy plc?22

That would require a fundamental23

renegotiation of the transaction. The basis of24

the transaction has always been on the assumption25

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of a parent company guarantee, and that1

arrangement has stood the test of the time in the2

United States.3

THE CHAIRPERSON: Okay. If we can4

just get OPG's agreement?5

MR. DRINKWATER: OPG would be fine6

with a mechanism where amendments to the lease7

document were shared with staff. That's not a8

problem.9

THE CHAIRPERSON: Thank you.10

Because it's been a long day, I11

wanted to, before we sum up, I'll just see if12

there's any further questions from my colleagues.13

I just would like to give -- there14

could be items, as you just mentioned, that kind15

of perhaps fall through the cracks in our16

questioning or that you didn't have an opportunity17

to comment on. I just wanted to give Bruce Power18

an opportunity to do that.19

MR. JEFFREY: No, thank you, we20

are content.21

THE CHAIRPERSON: Thank you.22

Staff, are there any issues that23

you thought you would have liked to have commented24

on that you didn't have that opportunity?25

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MR. BLYTH: No, we're satisfied.1

THE CHAIRPERSON: Ontario Power2

Generation?3

MR. DRINKWATER: No, Madam Chair,4

we are satisfied.5

THE CHAIRPERSON: Well, thank you6

very much. Then I will turn it over to the7

Commission Secretary.8

9

Closing remarks10

MEMBER JACK: Thank you, Madam11

Chair.12

I will be very brief, ladies and13

gentlemen. Today's public Hearing is obviously14

now being brought to a close. The Commission will15

proceed to consider its decision, and that16

decision and the reasons for it will be published17

as soon as practicable, probably in about three18

weeks' time.19

And I would again reiterate the20

Chair's comment thanking you for your21

participation.22

Merci beaucoup.23

THE CHAIRPERSON: I would like to24

just finally thank the people of Kincardine again25

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for their welcome. It's been a very nice process1

for us and we've enjoyed the hospitality and the2

service that we've received here.3

And I would also like to thank4

those people that work so hard around because when5

we move to different locations it's not always as6

easy as it is in our home base at 280 Slater, so7

to the translators, to the court reporters and to8

the staff. Thank you very much.9

Thank you very much.10

--- Whereupon the hearing concluded at 5:55 p.m.11