Ontario Power Generation

Ontario Power Generation

Type	Crown corporation
Industry	Electricity generation
Founded	1999
Headquarters	Toronto, Ontario, Canada
Key people	Jeff Lyash – President & CEO; Bernard Lord – Chair
Products	Electricity
Revenue	$4.73 billion CAD (2012)[1]
Number of employees	10,840 (2012)
Website	www.opg.com

OPG's head office in downtown Toronto

A Mitsubishi i-MiEV from the 2011 Montreal International Auto Show showing the hydro companies of Canada for Ontario Power Generation, Hydro-Québec, BC Hydro & others.

Ontario Power Generation (OPG) is a public company wholly owned by Government of Ontario.^[2] OPG is responsible for approximately 50% of the electricity generation in the Province of Ontario, Canada.^[3] Sources of electricity include nuclear, hydroelectric, wind, gas and biomass. Although Ontario has an open electricity market, the provincial government, as OPG's sole shareholder, regulates the price the company receives for its electricity to be less than the market average, in an attempt to stabilize prices. Since 1 April 2008, the company's rates have been regulated by the Ontario Energy Board.

Establishment

OPG was established in April 1999 under the Ontario Progressive Conservative government of premier Mike Harris as a precursor to deregulation of the province's electricity market. As part of government plans to privatize the assets of Ontario Hydro, the utility was split into five separate corporations. OPG was created as the owner and operator of all of Ontario Hydro's electricity generating stations.

Board of Directors

Bernard Lord is Chairman of the Board of Directors. He was appointed as Chairman on 1 April 2014.^[4]

Jeff Lyash is the President and Chief Executive Officer of OPG. He was appointed to this position on 21 August 2015, when the previous President and CEO, Tom Mitchell retired.

Other current members of the Board include William A. Coley, John Herron, Roberta L. Jamieson, M. George Lewis, Peggy Mulligan, Gerry Phillips, Lisa DeMarco, Brendan Hawley, Ira Kagan and Nicole Boivin.^[5]

Finances

The financial situation at Ontario Power Generation has improved significantly since 2003. Its profits for 2005 were $366 million, and its credit rating was upgraded. In July 2006, Liberal Energy Minister Dwight Duncan described OPG's turnaround as "[o]ne of the untold stories of the last two years"^[6]

On the local public relations side, OPG has won many awards for its performance as a "good corporate citizen".^[7] Most recently, OPG was named "Business of the Year" by the Kincardine and District Chamber of Commerce. OPG regularly sponsors community events and houses wildlife trails in the exclusion zones around its reactors. The company's annual employee charity campaign has raised millions of dollars for charities across Ontario. In October 2008, OPG was named one of "Canada's Top 100 Employers" by Mediacorp Canada Inc., and was featured in Maclean's newsmagazine. Later that month, OPG was also named one of Greater Toronto's Top Employers, which was announced by the Toronto Star newspaper.^[8]

OPG regularly reports on its operational, safety and environmental record. The company publishes semi-annual Performance Reports summarizing its performance in these areas.

Nuclear power

The Darlington Nuclear Generating Station, on the shores of Lake Ontario in Clarington.

OPG is the owner of two nuclear power plants^[9] with responsibility for operating the Pickering A, Pickering B, and Darlington nuclear generating stations in Ontario. OPG owns a nuclear power site on Lake Huron in western Ontario and leases the Bruce site to Bruce Power which owns eight nuclear reactors in that location.^[10] OPG owns two other nuclear stations on Lake Huron which are leased to Bruce Power which is responsible for their operation. The lease is for 18 years (until 2019) with an option to extend a further 25 years (to 2044).^[11] Bruce Power as the leaseholder is responsible for refurbishing of the reactors and has completed two which were mothballed earlier. They now plan to refurbish the remaining six reactors.^[12] by a partnership^[13] (TransCanada Corp., Borealis Infrastructure, a trust established by the Ontario Municipal Employees Retirement System, The Power Workers’ Union and The Society of Energy Professionals; over 90% of employees also own shares in the company).

OPG also operates three facilities for the interim management of nuclear waste generated by OPG’s 10 nuclear reactors and Bruce Power’s eight nuclear reactors.^[14] The company is proposing to construct and operate a deep geologic repository on the Bruce Nuclear site, adjacent to its present Western Waste Management Facility. The repository would provide permanent storage of low- and intermediate-level radioactive waste produced from the operation of the Bruce, Pickering, and Darlington nuclear generating stations. In 2005, OPG initiated the regulatory approval process. The first steps are a comprehensive environmental assessment by the Canadian Environmental Assessment Agency (CEAA),^[15] and an application for a site preparation and construction licence from the Canadian Nuclear Safety Commission.

OPG has also begun the process of building up to four new nuclear units at the site of its Darlington Nuclear Station. There is a lengthy approvals process in place, including a full environmental assessment which will take 3–4 years to complete. If everything goes well, the new units would go into service starting in 2018. No decision has yet been made on what technology the new reactors will use.

After conducting studies to determine the feasibility of refurbishing the four reactors at the Pickering B nuclear generating station, in February 2010 an announcement was made that they would be kept in good repair until 2020 but would not undergo a full refurbishment as it would not be economical. The four reactors at Pickering B represent over 2,000 megawatts of generating capacity. The two operating reactors at Pickering A will also close in 2020. The four reactors at Darlington will be refurbished as their performance and size makes this economically desirable.^[16]

Alternative energy

OPG owns and operates or contracts some limited alternative electricity generation through two wind power sites and two solar power sites. The company has not expanded either significantly, since the provincial government prefers not to compete with private enterprise companies in the potentially lucrative environmentally friendly power market. Ontario now has many privately owned wind farms, including one very close to the Bruce Power nuclear site, as well as over 70 large solar farms^[17] and these sell electricity to OPG and directly to some public utilities.^[18] By 2014, OPG had stopped burning traditional coal,^[19] converting two stations to burning biomass and closing one coal-fired site. The company is proud of its achievements in reducing pollution. "Now, together with a diverse fleet that includes 65 hydroelectric stations and two nuclear stations, OPG’s power is 99.7 per cent free of smog and greenhouse gas emissions."^[20]

Thermal electricity-generating stations were traditionally coal-fired, creating problems caused by pollution. The Nanticoke Generating Station, on Lake Erie in Haldimand County, Ontario, stopped burning coal in 2013 and remained idle until 2015. At that time, the plant was closed because it was not considered to be economically viable to convert it to using natural gas or biomass.^[21] However, OPG did convert two other power plants. The one in Atikokan, Ontario was converted in 2012 to burning steam treated wood pellets or biocoal, referred to as a type of biomass by OPG. "Biomass wood pellets are a sustainable fuel recognized as beneficial to climate change mitigation, as identified in the Biomass Sustainability Analysis Report by the Pembina Institute," according to OPG.^[22] The company says that this generating station is "North America's largest 100 per cent biomass-fueled power plant".^[23] Another thermal electricity generating station, at Thunder Bay, ON, was converted to using "advanced" biomass in 2014. "It is a solid biomass fuel ... has higher energy density and is hydrophobic (repels water) allowing it withstand the elements while being stored outside," according to OPG.^[24]

Controversies and criticism

OPG attracted considerable controversy for the operation of coal-fired generating stations, which ranked among Canada's largest individual air pollution sources. This was mostly because Nanticoke housed a massive 3,900 MW of generation capacity in one site: it produced "the most pollution in one site" despite being a reasonably clean plant per megawatt of power.^[25] Nanticoke Generating Station was North America's largest coal-fired generating station and the single largest air pollution source for southern Ontario and northern New York state, attracting considerable criticism from environmentalists and legislators in both jurisdictions. OPG's Lambton Generating Station was the second largest air polluter in the province. The Liberal government of Dalton McGuinty came to power in 2003 with a promise to phase out coal generation by 2007.^[26] However, for various operational and demand reasons this was not possible until 2014, when the last coal was burned in OPG's stations.

The company also endured significant criticism concerning the slow return to operation of some of its nuclear generating stations which had been shut down by the 2003 North America blackout. The problem was that all but one of the reactors were tripped and allowed to poison out, preventing an early reconnection to the electricity grid. Once shut down, all nuclear reactors take several days to return to service.

Another source of criticism was the extended and expensive refit to the reactor Unit 4 at the Pickering A Nuclear Station. In late 2003, the incoming Liberal government fired the three most senior executives at OPG on the heels of a report that the retrofit of a single reactor at the Pickering nuclear plant had come in $900 million over budget and three years behind schedule. The government also accepted the resignation of all remaining Board members. Management underestimated the amount of work and complexity of the Unit 4 refurbishment project and failed to do a complete scope analysis before starting on the project. Due to the uproar over the large cost overruns and delays, an independent review committee was commissioned to examine the future role of OPG in the electricity sector; the future structure of OPG; the appropriate corporate governance and senior management structure; and the potential refurbishing of Pickering A Units 1, 2, and 3. Former federal Finance Minister and Deputy Prime Minister John Manley chaired the review committee. Peter Godsoe, Chairman of the Bank of Nova Scotia, and Jake Epp, a former federal Cabinet Minister, Chair of the Pickering A Review Panel, and interim Chairman of OPG, also sat on the committee.^[27]

The experience of refurbishing Pickering A Unit 1 was significantly different with a much tighter adherence to schedule and budget. Unit 1 was returned to service in November 2005 providing 542 MW of generating capacity for Ontario's electricity system. It was decided that Pickering Units 2 and 3, which had considerably larger maintenance issues, would not be restarted as the business case could not be made.

In early December 2015, Ontario's Auditor general pointed out that OPG was importing wood products from Europe to burn at the Thunder Bay station "pushing the cost of the electricity it generates to 25 times higher than other biomass generators",^[28] or $1,600 per MWh. Subsequently, Ontario's Development and Mines Minister Michael Gravelle stated that OPG was seeking a local company to produce the biomass fuel.^[29]

Considering the ever-increasing cost of electricity to Ontario consumers, the hiring of CEO Jeffrey Lyash in the summer of 2015 created some criticism when it was revealed that Lyash would earn $775,000 per annum and that could increase to $1.55 million with bonuses if performance targets are met.^[30]

Head office

• Ontario Power Building, 700 University Avenue, Toronto, ON M5G 1X6. Tel. (416) 592-2555.

Power plants

The Pickering Nuclear Generating Station.

The 1045-MW R. H. Saunders Generating Station, on the Saint Lawrence River.

The old water mill at Decew Falls

OPG's Thunder Bay Generating Station.

OPG owns and operates generating plants that draw from three main power sources: nuclear, hydro-electric, and fossil fuels, plus some minor output from wind and biomass. In 2012, it generated about 60 per cent of the electricity in Ontario or 83.7 terawatt hours (TWh).

The Bruce Nuclear Generating Station is the largest nuclear generating station in the world by net electrical power rating, total reactor count, and number of operational reactors. Roughly 60% of Ontario's electricity is accounted for by three nuclear power plants: Pickering, Darlington and Bruce. No fatal accidents related to nuclear power have occurred in Ontario.

See also

• Renewable energy in Canada
• Hydro Ottawa

References

External links

Wikimedia Commons has media related to Ontario Power Generation.

• Official website
• OPG 2008 Annual Report
• Images from the OPG Collection Niagara Falls Public Library (Ont.)
• Material related to power developments at Niagara Falls with an interactive map Niagara Falls Public Library (Ont.)
• OPG L&ILW Deep Geologic Repository website

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