Lepreau nuclear plant back in service after second-longest outage in 40 years
N.B. Power says costs of 8-month shutdown still being calculated
The Point Lepreau nuclear generating station is back online producing electricity for N.B. Power. But the cost to customers of an eight-month shutdown that began in early April and ended last week is still being calculated by the utility.
"N.B. Power continues to assess the financial impact of the extended outage," Dominique Couture, a spokesperson for the utility, wrote by email in response to questions about the cost of the shutdown and how it will paid for.
What began as a 98-day planned and budgeted maintenance shutdown on April 6 ballooned into a 248-day outage, after an unexpected problem surfaced in the station's generator.
That added 21 extra weeks of downtime, the second-longest service interruption caused by equipment problems at the plant in its 41-year history.
In 1995, the nuclear plant was offline for almost nine months to address sagging pressure tubes in its reactor.
Couture said N.B. Power is hoping costs caused by the generator trouble, whatever they amount to, won't have to be fully paid by customers and the company is "exploring options" like "potential recovery through corporate insurance policies" as an alternative.
Breakdowns at Lepreau are notoriously expensive.
Depending on the time of year and market prices to supply replacement energy, the cost of an unscheduled outage can range between $1 million and $4 million per day.
Since last year, those amounts are charged directly to customers on their bills as a "variance account recovery" rather than being absorbed as a financial loss by the utility.
Currently, N.B. Power customers are paying a three per cent surcharge on every monthly bill to pay for previously accumulated financial misfortunes, including another major breakdown at Lepreau that occurred in December 2022.
That lasted 35 days and added more than $100 million to the variance account set up for customers to pay off.
If insurance does not cover the recent Lepreau breakdown costs, those will be added to the variance account. N.B. Power customers will not have to pay more than the current three per cent surcharge on their bills but those payments will be extended indefinitely, potentially for years.
Earlier this year the outstanding balance in the variance account exceeded $200 million. The customer surcharge was expected to raise $54.1 million to apply against that.
In explaining the decision to charge customers directly, N.B. Power said on its website it could no longer afford to deal internally with the cost of unbudgeted expenses like those caused by troubles at Lepreau.
"Until now, N.B. Power had to absorb any variances, whether they were positive or negative," it wrote
"In recent years, N.B. Power has experienced primarily negative variances, which has become increasingly challenging for us."
In testimony at New Brunswick's Energy and Utilities Board earlier this year, just before Lepreau's generator problem surfaced, N.B. Power president Lori Clark said the cost of reliability problems at the nuclear plant has been the source of many of the utility's poor financial results in recent years.
"In most of those years there would have been some challenges with the assumptions that were made around Lepreau's performance, which could have in some cases wiped out our earnings," she said.
Designed to run at more than 90 per cent capacity in good years, Lepreau's recent output has been particularly poor, with the plant operating at 57 per cent capacity in the 2023 fiscal year and what is likely to be close to 32 per cent this year.
Despite those troubles, Lepreau remains N.B. Power's lowest-cost generator when it's running, and the utility is unwavering in its belief that ongoing maintenance and upgrades will eventually overcome its recent struggles.
To pay for itself the plant needs to operate until 2042, a goal the utility believes is achievable.
Lepreau "remains a cornerstone of New Brunswick's energy infrastructure," the utility said in announcing its return to service last week.
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