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Ontario Power says extending Pickering nuke license could save ratepayers C$600M

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Ontario Power says extending Pickering nuke license could save ratepayers C$600M

A 10-year extension of the operating license for Ontario Power Generation Inc.'s Pickering nuclear generating station has the potential to save ratepayers in Canada's most populous province as much as C$600 million, according to a company executive.

The province-owned electricity generator is making progress with Canada's nuclear regulator on a plan that would see Pickering's license extended to 2028, CFO Kenneth Hartwick said on a conference call. The company expects its application to continue generating power at Pickering to be heard by the Canadian Nuclear Safety Commission later in 2018. The facility's existing license expires in August.

Preserving output from aging nuclear plants is a key element of Ontario's planned pivot to low-emitting fuel sources. In a long-term outlook issued in 2017, the province's Independent Electricity System Operator maintained commitments to refurbish Ontario Power's Darlington nuclear facilities and said it expected Bruce Power LP's Bruce A and Bruce B plants to remain in service until 2064. The plan anticipated that the 3,100-MW Pickering station would be shut in 2024.

"In 2017, we confirmed the potential for extending operations at Pickering beyond 2020," Hartwick said on the March 9 call. "This plan is in keeping with the province's long-term energy plan and based on the technical feasibility work performed to date with additional financial support" provided in a recent decision by the Ontario Energy Board.

If approved, the 10-year license extension will take the plant beyond commercial operation and allow the company to place it in safe storage after operations cease, Hartwick said. The company started disassembly of a unit at Darlington in 2017 and plans to have removal of reactor components and other parts completed by mid-2018. It intends to start reassembling the unit in mid-2018, with a targeted completion date of February 2020.

"Continuing Pickering's operation beyond 2020 is projected to save Ontario electricity customers up to C$600 million," Hartwick said. "It will also ensure Ontario continues to benefit from a safe, clean and reliable source of baseload generation during the refurbishment of Darlington and the initial refurbishments being planned for the Bruce nuclear units."

Separately, Ontario Power on March 8 reported net income attributable to shareholders of C$860 million in 2017, up from C$436 million in 2016. Revenue dropped year over year to C$5.16 billion from C$5.65 billion, while gross margin fell to C$4.47 billion from C$4.93 billion.