Washington (Platts)--23Jul2009

Ontario-based Bruce Power on Thursday said it is scrapping plans to build
as many as six reactors in the province because of slumping power demand. It
will instead focus on refurbishing six existing units.

The generator has planned to build as many as two units, with combined
capacity between 2,000 and 3,000 MW, at its Nanticoke facility on Lake Erie,
and as many as four units, which combined capacity of 4,000 MW, at its nuclear
facility near Elgin on Lake Huron.

Bruce Power said its decision on the Ontario units has no effect on its
proposal to build nuclear units in Alberta or Saskatchewan, where it said both
provincial governments are expected to release policy statements later this
year on nuclear's role in the energy mix.

"These are business decisions unique to Ontario and reflect the current
realities of the market," Duncan Hawthorne, Bruce Power president and CEO,
said in a statement.

"Our focus has always been to find the best way to provide Ontario with a
long-term supply of 6,300 MW," he said. "For more than five years, we've
examined our options and refurbishing our existing units has emerged as the
most economical."

Bruce Power spokesman Murray Elston said the decision to pull the plug on
the new reactors was, in part, a result of the current economic downturn that
has pushed electricity demand in Ontario to record lows.

"We don't have enough of a definition of how firm the economic recovery
will be," Elston said. While he said the generator believes that demand will
ultimately reach levels projected when it proposed the new plants, he said
"that is far enough out" that Bruce Power needed to pull back on its new build
plans.

The company said it has notified the Canadian Nuclear Safety Commission
and the Canadian Environmental Assessment Agency that it will withdraw its
site license applications and suspend its environmental assessments in Bruce
County and Nanticoke.

Bruce Power said it will now work with its investors and the Ontario
Power Authority to investigate the feasibility of refurbishing Units 3-8
following the successful restart of Units 1 and 2, which will provide the
Ontario market with another 1,500 MW of baseload capacity. Units 3-8 are
currently operating, but would be decommissioned within the next 10 years if
they are not refurbished.

The company said refurbishing its remaining units could create up to
3,000 construction jobs and represent a multi-billion dollar investment over
the next 10 years. It also would secure the long-term employment of up to
4,000 people to operate the site's eight units over their extended lives.

"While we have chosen to pursue the refurbishment option, I want to thank
everyone in Bruce, Haldimand and Norfolk counties who supported us," Hawthorne
said. "The work we have done confirmed both sites held great promise for new
build if the market conditions were more favorable. However, the time has come
to narrow our focus and follow the route that's best for us, for Ontario and
its ratepayers."

Bruce Power is a partnership of Cameco, TransCanada, BPC Generation
Infrastructure Trust -- a trust established by the Ontario Municipal Employees
Retirement System -- the Power Workers' Union and The Society of Energy
Professionals.

The company's announcement comes after Ontario's government in late June
suspended a request for proposals for two nuclear reactors at Ontario Power
Generation's Darlington station, citing concerns about pricing and the future
of lead bidder Atomic Energy of Canada Ltd.

Deputy Premier and Minister of Energy George Smitherman said in a June 29
statement that, despite the decision, the government remains committed to
modernizing the province's nuclear fleet.

"Emission-free nuclear power remains a crucial aspect of Ontario's supply
mix," he said. "Unfortunately, the competitive bidding process has not
provided Ontario with a suitable option at this time."

The government in late February received proposals under the second phase
of a two-part solicitation that began in 2008 from Areva, AECL and
Westinghouse. It later said only AECL's proposal complied with the terms of
the RFP and "the objectives of the government."

The Canadian government in late May said it was proceeding with a
restructuring of AECL.

Under the RFP, the two new units were to replace older units as part of
strategy to "renew" Ontario's nuclear fleet, the provincial government said.
Nuclear power accounts for about 50% of Ontario's power needs.