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Execs fired as cost of reviving Pickering nuke plant estimated at $4 billion
32 minutes ago
COLIN PERKEL
TORONTO (CP) - Ontario's new Liberal government moved swiftly Thursday to take control of the province's giant electricity generating utility, firing its top three executives after a report blamed senior managers for botching the restoration of the Pickering nuclear plant.
Canadian Press Photo
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There was no decision on whether the province would press ahead with efforts to get Canada's largest and oldest nuclear power plant fully back in service, which the report estimated could end up costing $4 billion and take another five years.
"It is a horrible mess," said Energy Minister Dwight Duncan, who noted the project is still costing taxpayers $25 million a month.
"This is an affront to the people of Ontario."
Duncan said he had no choice but to get rid of the three top executives at Ontario Power Generation and replace its board of directors. The overhaul has driven up electricity prices in Ontario and shaken public faith in the province's power supply, he said.
Severance terms were not released for OPG's chief executive officer Ron Osborne, chairman Bill Farlinger, and chief operating officer Graham Brown - all appointees by the former Conservative government.
Duncan blamed that regime for failing to properly oversee the publicly owned utility as deadlines to restore the Pickering plant changed 13 times and the total cost spiralled out of control.
"They did virtually nothing about it," said Duncan.
"The findings point to mismanagement of one of Ontario's most important energy assets."
The New Democrats called for a criminal investigation and a forensic audit.
"You do not get billions of dollars of waste from engineering problems," said NDP member Marilyn Churley.
"Give me a break. It comes from negligence and misappropriation of funds."
In 1997, four units at Pickering A just east of Toronto were taken offline for safety reasons. Work to get them running again began in 1999.
Only one of the four units has returned to full service and that happened only in the last couple of months - more than two years late. The cost to restore that unit was $1.25 billion - almost triple the $457 million originally estimated.
Duncan said it was too early to speculate on the future of nuclear power in Ontario, which supplies about 35 to 40 per cent of the province's electricity.
Under pressure from soaring electricity prices caused by tight supplies, former Tory energy minister John Baird appointed Jake Epp in May to investigate what had gone wrong at Pickering.
In his report Thursday, the former federal energy minister laid the blame for the fiasco on the provincial government, under whose watch the project went so badly amiss, as well as on senior management and OPG's board of directors.
"The failure of this project was pervasive," said Epp.
Epp blamed a management culture that accepted sliding deadlines and excuses and incomplete information for "consistently unreliable and unrealistic" estimates of cost.
"It is that type of culture which does not take responsibility and which is not accountable which needs to be changed," said Epp.
"Waste is a natural outcome."
Disorganization was so pervasive that workers were regularly forced to wait up to three hours just to get into the facility, a situation that got even worse after the Sept. 11 terrorist attacks in the United States.
The report estimates the total cost of restoring service at the Pickering A plant could be almost quadruple the originally approved cost of $1.1 billion.
It could take until August 2008 to get all four units running at the plant, when initial plans called for that to have happened by December 2002.
In an interview, Osborne blamed a lack of experience among senior management for the problems.
"The project was underestimated right from the start," he said.
"Once off the rails, it was extraordinarily difficult to get back on the rails."
Although "many people" contributed to the situation, he said he accepted full responsibility.
"I'm not trying to duck that," said Osborne, adding he offered to resign a year ago.
"I guess they've taken me up on that. This isn't a complete surprise. I can't say I enjoy the circumstances and the timing. That would be naive and stupid."
Baird said he accepted his share of the blame.
However, he said had concerns about Pickering from the moment he took over as energy minister last year and that's why he asked Epp to examine the situation.
Richard Dicerni, a long-time bureaucrat and OPG vice-president, was appointed interim chief executive officer. The government will approve decisions until the board is replaced.
John Manley, who has just resigned as federal finance minister, has been mentioned as a possible candidate to take over OPG.
32 minutes ago
COLIN PERKEL
TORONTO (CP) - Ontario's new Liberal government moved swiftly Thursday to take control of the province's giant electricity generating utility, firing its top three executives after a report blamed senior managers for botching the restoration of the Pickering nuclear plant.
Canadian Press Photo
Related Quotes
DJIA
NASDAQ
^SPC
9930.82
1968.80
1069.72
+57.40
+8.55
+4.99
delayed 20 mins - disclaimer
Quote Data provided by Reuters
Missed Tech Tuesday?
TiVo-like digital video recorders can change your life. Build your own, or check out Sony's new PSX.
There was no decision on whether the province would press ahead with efforts to get Canada's largest and oldest nuclear power plant fully back in service, which the report estimated could end up costing $4 billion and take another five years.
"It is a horrible mess," said Energy Minister Dwight Duncan, who noted the project is still costing taxpayers $25 million a month.
"This is an affront to the people of Ontario."
Duncan said he had no choice but to get rid of the three top executives at Ontario Power Generation and replace its board of directors. The overhaul has driven up electricity prices in Ontario and shaken public faith in the province's power supply, he said.
Severance terms were not released for OPG's chief executive officer Ron Osborne, chairman Bill Farlinger, and chief operating officer Graham Brown - all appointees by the former Conservative government.
Duncan blamed that regime for failing to properly oversee the publicly owned utility as deadlines to restore the Pickering plant changed 13 times and the total cost spiralled out of control.
"They did virtually nothing about it," said Duncan.
"The findings point to mismanagement of one of Ontario's most important energy assets."
The New Democrats called for a criminal investigation and a forensic audit.
"You do not get billions of dollars of waste from engineering problems," said NDP member Marilyn Churley.
"Give me a break. It comes from negligence and misappropriation of funds."
In 1997, four units at Pickering A just east of Toronto were taken offline for safety reasons. Work to get them running again began in 1999.
Only one of the four units has returned to full service and that happened only in the last couple of months - more than two years late. The cost to restore that unit was $1.25 billion - almost triple the $457 million originally estimated.
Duncan said it was too early to speculate on the future of nuclear power in Ontario, which supplies about 35 to 40 per cent of the province's electricity.
Under pressure from soaring electricity prices caused by tight supplies, former Tory energy minister John Baird appointed Jake Epp in May to investigate what had gone wrong at Pickering.
In his report Thursday, the former federal energy minister laid the blame for the fiasco on the provincial government, under whose watch the project went so badly amiss, as well as on senior management and OPG's board of directors.
"The failure of this project was pervasive," said Epp.
Epp blamed a management culture that accepted sliding deadlines and excuses and incomplete information for "consistently unreliable and unrealistic" estimates of cost.
"It is that type of culture which does not take responsibility and which is not accountable which needs to be changed," said Epp.
"Waste is a natural outcome."
Disorganization was so pervasive that workers were regularly forced to wait up to three hours just to get into the facility, a situation that got even worse after the Sept. 11 terrorist attacks in the United States.
The report estimates the total cost of restoring service at the Pickering A plant could be almost quadruple the originally approved cost of $1.1 billion.
It could take until August 2008 to get all four units running at the plant, when initial plans called for that to have happened by December 2002.
In an interview, Osborne blamed a lack of experience among senior management for the problems.
"The project was underestimated right from the start," he said.
"Once off the rails, it was extraordinarily difficult to get back on the rails."
Although "many people" contributed to the situation, he said he accepted full responsibility.
"I'm not trying to duck that," said Osborne, adding he offered to resign a year ago.
"I guess they've taken me up on that. This isn't a complete surprise. I can't say I enjoy the circumstances and the timing. That would be naive and stupid."
Baird said he accepted his share of the blame.
However, he said had concerns about Pickering from the moment he took over as energy minister last year and that's why he asked Epp to examine the situation.
Richard Dicerni, a long-time bureaucrat and OPG vice-president, was appointed interim chief executive officer. The government will approve decisions until the board is replaced.
John Manley, who has just resigned as federal finance minister, has been mentioned as a possible candidate to take over OPG.