Ontario Power Generation

OPG News Release, August 12, 2005

August 12, 2005
ONTARIO POWER GENERATION NOT PROCEEDING WITH THE REFURBISHMENT OF PICKERING A UNITS 2 AND 3

OPG Will Devote Resources to Existing Nuclear Units

[Toronto] - President and CEO Jim Hankinson today announced that Ontario Power Generation (OPG) has decided not to proceed with the refurbishment of Pickering A Units 2 and 3. Instead, it will devote its resources and expertise to maximizing the performance of its ten existing nuclear units.

OPG's Board of Directors accepted management's recommendation that the refurbishment of Units 2 and 3 not go ahead and advised the Ontario Government of its decision.

"For several months we have studied the economics of the Pickering A Units 2 and 3 return to service, including third party reviews," said Hankinson. "Our mandate is to operate our assets as efficiently and as cost-effectively as possible. We don't see a sound business case for returning Units 2 and 3 to service."

Mr. Hankinson stressed that, "The return-to-service project is technically feasible and the units could be operated safely for several years. However, the physical conditions of Units 4 and 1 made them better candidates for return to service than Units 2 and 3.

For OPG, "The expertise in nuclear operations and the knowledge gained by returning Units 4 and 1 to service can be used best in maximizing the performance of these two units, and the other eight units at our Pickering and Darlington stations. OPG's nuclear units are important for Ontario as they produced close to 30 per cent of the power used by the province last year," Mr. Hankinson said.

He added, "OPG's decision on Units 2 and 3 is financially prudent and reflects our objective of keeping our costs as low as possible."

Mr. Hankinson also reassured both workers in OPG's nuclear division and the communities in the Durham Region that the decision announced today does not reduce the relevance of nuclear power to either Ontario Power Generation or to the province.

"The decision on Units 2 and 3 should not be seen as a lack of confidence in nuclear power," Hankinson said. "OPG continues to believe strongly that nuclear power remains an important element of the province's electricity generation mix. Nuclear fuel costs are stable and nuclear reactors do not contribute to smog or global warming.

"To this end, studying the case for extending the life of the Pickering B station, and ultimately Darlington as well, is a key element of OPG's plan for the future," he said.

The nine nuclear units that OPG had in service last year produced 42.3 terrawatt hours of electricity, 4.6 TWh more than OPG's nuclear production in 2003. Nuclear output was 40 per cent of OPG's total electricity production last year. These improvements have carried through to this year as the nuclear units have had outstanding performance in the high-demand winter and summer months.

OPG returned Pickering A Unit 4 to service in 2003 and Unit 1 is now undergoing commissioning. The refurbished Unit 1 is expected to be in service in October at a projected cost of about $1 billion.

Units 2 and 3 have been maintained in a safe shutdown state since December 1997. Over the next two years the fuel and heavy water will be removed from Units 2 and 3 and the units will be put into a long-term layup state.

Ontario Power Generation Inc. is an Ontario-based electricity generation company whose principal business is the generation and sale of electricity in Ontario. Our focus is on the efficient production and sale of electricity from our generation assets, while operating in a safe, open and environmentally responsible manner.

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Ontario Power Generation Media Relations
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