Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources

Issue 7 - Evidence


OTTAWA, Thursday, April 13, 2000

The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 9:00 a.m. to examine issues relating to energy, the environment and natural resources generally in Canada.

Senator Mira Spivak (Chairman) in the Chair.

[English]

The Chairman: Good morning, Mr. Andognini. We are delighted to have you here. We have followed your career to some extent. We know that you established the nuclear performance advisory group in January 1997 to carry out an independent, integrated assessment of what was then Ontario Hydro Nuclear. I understand that this is now a routine practice in the U.S. nuclear industry, following Three Mile Island.

Please proceed, Mr. Andognini.

Mr. Carl Andognini, Special Nuclear Advisor to the President, Ontario Power Generation: Good morning, it is not only a pleasure but also an honour to be here today. I am here to discuss my personal experiences in nuclear power. I would be pleased to give you some of my own personal opinions, which do not necessarily reflect the opinions of the Ontario Power Generation. I am an American with over 40 years of nuclear experience and have worked at or monitored nuclear reactors in many parts of the world. Therefore, you will understand if my presentation appears to be a little pro -nuclear.

First, let me say that I was a licensed operator on a nuclear reactor in the United States, so I have been involved in nuclear technologies for over 40 years. I can honestly say that I firmly believe that the CANDU technology that you have in Canada is the safest nuclear technology in the world, especially when compared to light-water technologies used in the U.S. and other parts of the world.

I say that because the CANDU has redundant and independent shutdown systems. Its control systems are completely automated and are monitored by highly trained and experienced licensed operators. Also, there is a difference in philosophy between the American way of doing it and the Canadian way of doing it, much the same as there is a deference between a Boeing aircraft and a French Airbus.

An Airbus relies totally on computers; the pilot serves as a backup. On a Boeing aircraft, the pilot is the main control; the computers act as a backup.

In the U.S., the reactors are operated much the same as a Boeing. They primarily rely on the operators. In Canada, the reactors are similar to an Airbus; they are computer-operated. If there is an abnormal occurrence in the control room, there is no action required by the operator for about 15 minutes. There is time for the operator to become acclimated to what is going on.

The other benefit is that the CANDUs use natural uranium. There is no probability of an incident like that which occurred in Japan, where they had an inadvertent criticality. Another advantage is that Canada owns 60 per cent of the world's natural uranium. CANDU technology also uses on-line re-fuelling, which is a performance indicator; as well, it does not involve shutdown and movement of highly enriched uranium fuel in water-filled pools. Therefore, there are many advantages to the CANDU system.

In November 1996, I was contacted by the then president of Ontario Hydro, who asked me to review the performance at what was then Ontario Hydro nuclear plants. I have a curve here -- but I have no way of displaying it -- that shows the decline in performance for the years preceding the discussion that I had with the president.

The Chairman: If you would table the chart, we will distribute it.

Mr. Andognini: The president at the time also asked if I would be willing to conduct a brutally honest assessment to evaluate the causes and to develop an improvement program. I believe he came to the U.S. because the U.S. had the experience of building turnarounds of nuclear performance. After Three Mile Island in Pennsylvania, many utilities were forced into a recovery program, because the Institute of Nuclear Power Operations was developed. The institute was a regulatory body much the same as the Nuclear Regulatory Commission. Thus, there were two intrusive regulators that worked on the utilities, which forced them to participate in a corrective action program.

We used a proven methodology that required the use of about 35,000 person-hours at three sites, plus corporate office. From January to August 1997, we developed and implemented the assessment, while continuing to operate 19 of the 20 units that Ontario Hydro had. One of these units was permanently shut down years before because of damage to steam generators.

The findings in our assessment were quite clear. The decline in requirements for electricity in late 1970s and early 1980s resulted in early retirement packages and the loss of a lot of good people. In 1993, they went through a reorganization where they put the three operating units in direct competition with each other. Hence, they decentralized, resulting in duplication, triplication and even quadruplication of efforts and cost.

The second reason that they were doing poorly is that the organization never really shifted from a fantastic engineering and construction organization to an operational and maintenance organization. We are not totally there yet.

This is a very fundamental problem, one that also occurred in the U.S., where the engineers thought that they could operate the units in the same way that they built them, and that is not the way it happens.

In addition to that, when they first began operations, Ontario Hydro always felt that they were world-class operators; in my opinion, however, they were not world-class operators but, rather, they operated world-class reactors. The success that they achieved in the early years of the operation of these units was because of the robust design of the units.

In addition to that, we found that there were weaknesses in the managerial leadership of the organization, that there was a cultural problem with the employees -- having been a Crown corporation, there was an attitude of entitlement. People and performance lacked criteria. No compliance was required. The procedures and processes that I indicated -- not shifting from an engineering construction to operations and maintenance -- were not appropriate for the long-term operation of a facility.

The organization was, as I indicated, decentralized, and that resulted in internal competition. As well, human resources had not been hired in previous years to replace retiring employees. There were problems with labour relations because changes were inevitable in a relationship where there was a requirement to work with the unions, instead of mandating and directing to the unions. A great deal of that changed after Mr. Osborne came. He had a view of wanting to work as a team, and that has proven to be most effective.

After an exhaustive review of all of the information that we gathered, we came to the conclusion that performance was substantially below industry standards but produced "minimally acceptable" results. That is a term that we obtained from the U.S. government, when they inspected their facilities in the U.S. It is important to understand that it was safe to continue operating these units, but that immediate attention was required to improve their performance. That is the conclusion that we came to.

We prepared a presentation to the board of directors in August 1997, where we recommended that we lay up the seven oldest units -- four at Pickering A and three at Bruce A -- to consolidate the resources, to train the resources, and to take the resources of those units to develop and implement the performance improvement program.

That performance improvement program included the development of new processes and procedures and the training of the staff -- a challenging opportunity. To improve communications, we did face-to-face meetings with thousands of employees. In total, there are approximately 10,000 employees in Ontario Power Generation today. We developed a report card so that we would have a way of letting the staff, the organization, the communities that surrounded us, and the regulator understand what and how we were doing in the areas of performance and the recovery program.

We held quarterly meetings with the surrounding town councils; we initiated an annual meeting within these communities to provide an opportunity for the citizens, via an open forum, to ask questions and find out what we were doing.

We instituted an organizational restructuring to standardize the format for the job descriptions, to create the same positions at the three plants. We restructured under what is called "requisite organization." As well, we taught our managers to train, coach and mentor the staff.

We developed an ombudsman program, which was extremely beneficial, to allow the employees to bring concerns to management without fear of retaliatory action. That proved to be a very effective tool for management to utilize in taking corrective action.

We also developed the WANO -- World Association of Nuclear Operators -- performance indicators. These are standard from plant to plant and country to country. Thus, if a WANO performance indicator in Canada is compared to one in Japan, China or the U.S, they would work on the same basis.

In 1997, we started the year with a performance indicator of 57 per cent. The North American average at that time was 81 per cent. In 1999, at the end of the year, we were at 81 per cent; thus, we had made some improvement. However, the North American average went from 81 per cent to 88 per cent. Therefore, we were trying to hit a moving target. Clearly, progress has been made, but substantial work still needs to be done to create a world-class operation.

In respect of regulatory action, my experience in the U.S. taught me that, after Three Mile Island, the development of the Institute of Nuclear Power Operation was the turning point of the nuclear industry in the U.S. While that was occurring over the last 15 to 18 years, little of that experience was brought to Canada. When we did the independent assessment from January to August 1997, we identified many of the same problems that had occurred in the U.S. over a 10- to 15-year period -- ones that needed attention immediately. Thus, Canada was not looking to the south to find out what was going on there.

If I had been asked 10 years ago, "Would the Nuclear Regulatory Commission, in the U.S., transfer a nuclear licence without a public hearing?", I would have said not only "No", but "Hell, no," and I would have bet my life on it. That has happened. The utilities, in the U.S., have been able to transfer ownership without a public hearing. Also, the plants in the U.S. have been licensed for a 20- to 30-year period. In Canada, the licensing period is for a maximum of two years, which is a very difficult task in itself because it requires an extensive amount of work from your staff to prepare for those licensing activities.

In the U.S., they have relicensed two units for the Baltimore Gas and Electric Co., in Baltimore, Maryland, for an additional 20 years. That, too, was done without a public hearing. There have been massive changes in the regulatory area in the U.S.

The Canadian regulatory area was somewhat concerned with the IIPA that we had. The AECB had tried, over a number of years, to get the utility to make changes. Several attempts were made, but each attempt was not implemented, causing the AECB to become very frustrated. Hence, this report was a blessing in disguise to the AECB.

However, there are, in my opinion, some problems within the AECB. I believe that the regulators are too much in line with management. For example, if you take the fire protection system out to perform repairs, you must obtain approval from AECB to restart that system.

From a regulatory point of view, in the U.S. the system would be taken out, and the regulator would monitor the corrective action and how that system was put back into service. If the regulator did not feel that that was appropriate, they would take regulatory action. In Canada, the regulator is in line.

The regulators also indicated to Ontario Power Generation that they would require a new licence for a new owner if OPG should decide to sell any of its units, which in itself would require public hearings and environmental assessments. In my opinion, the two-year licence period is much too short. The regulator has the authority to shut down the units at any time should the need arise.

In closing, I would like to leave you with five points. First, in my opinion, the CANDU is the safest technology in the world and has many advantages to it. Second, the sale of CANDU reactors throughout the world brings the safest nuclear technology throughout the world and also brings economic benefits to Canadians. Third, the oil problems of 1970 and of 2000 leave us with the question of whether we can depend on oil or natural gas in the future. In my opinion, I doubt it. Four, Canada needs clean energy that is environmentally friendly. CANDU reactors do not release to the atmosphere carbon dioxide, sulphur dioxide, mercury and other things that are found in coal. In my opinion, it is a very clean and safe energy source.

I hope that I have provided this committee with some information to help you better understand and evaluate this safe and clean electricity source. I would be happy to answer any questions for you.

Senator Taylor: Thank you, Mr. Andognini, for your crisp and to-the-point submission.

On the second page of your presentation you say "use proven methodology that required approximately 35,000 person hours" at three sites. I do not understand that. Do you mean that these are safe because that many hours in training were spent on it?

Mr. Andognini: The point I was trying to make, sir, is that the assessment was conducted using a proven methodology. It was a methodology that the U.S. Nuclear Regulatory Commission had determined to evaluate the performance of plants in the U.S. After they had taken regulatory action, they used the same methodology to determine whether the plants were safe to restart.

The methodology that we used incorporated all the processes that they utilized. It took 35,000 person hours to conduct that at the three sites, as well as the headquarters. It was a very extensive and intrusive evaluation.

Senator Taylor: I get the impression when I read these remarks that you are saying that the machine is a good machine but, sometimes, the drivers or trainers or employees are not trained up to the level they should be. Is that right?

Mr. Andognini: In my opinion, the CANDU is a very robust safe reactor system. When you did not shift from an engineering construction methodology to an operate and maintain methodology, you did not properly maintain the units, thus taking some of the robustness out of it over the years. You still have a robust design. It has been degraded a little; but the ability and the capability of returning it back to a totally robust design is there and has been accomplished over the last three years.

Senator Taylor: If there is any safety hazard, it is more likely to be in the method and training of people rather than in the machine itself, is that right?

Mr. Andognini: Like anything, whether it is an automobile, an airplane or a nuclear reactor, it relies on human instincts. The quality and safety of anything are dependent upon the hands of the worker. It has to be a philosophy that starts at the top. Whether you get quality or safety, it always ends up in the hands of the worker.

Senator Taylor: Is the training that we have in Canada good enough? Where would you rate it on a scale of 1 to 10?

Mr. Andognini: That is a difficult question for me to answer because I do not know what you want me to compare it with.

Senator Taylor: Compare it to perfection.

Mr. Andognini: What is perfection? I am not trying to give you a difficult time, senator. It is difficult to quantify it for you. I can tell you that the reactors in Canada with a CANDU design are a very safe system. Have they been operated and maintained properly? No. Has that been corrected? Yes.

Senator Taylor: In terms of relicensing in Canada, you mentioned two years -- as you say, you seem to spend a lot of time doing book work, keeping up all the time; on the other hand, say that in the U.S. they go 10 or 20 years. What is the optimum time for relicensing?

Mr. Andognini: The methodology used in the U.S. has been very effective because the U.S. Nuclear Regulatory Commission offered 20 years, and sometimes 30 years, whatever the utility went for. But there have been many cases when the regulator has taken mandatory action and shut the plant down until they took corrective actions.

The AECB also has that authority. In my opinion, a two-year licence period is much too short. It takes too many resources to prepare for that on an ongoing basis. When we first got here, the Pickering licence was only six months. The regulator was trying to get the attention of the utility to take some corrective action. Thus, they reduced it to a six-month period. We worked very hard, got it to nine months, then to one year, and then to a two-year period. Properly preparing for those meetings takes a lot of time and effort. Many of those resources could have been utilized in capitalizing on the return.

Senator Taylor: You are saying that 10 or 20 years is quite all right.

Mr. Andognini: I would say that 20 years is a reasonable licence period.

Senator Christensen: Thank you for your presentation. It was certainly clear and concise. As you know, we had the pleasure of having a visit last week to the Pickering plant. It was certainly enlightening for me. I am interested in the human equation, as Senator Taylor was just discussing. That is probably the area about which most of us have concerns. Certainly, the redundancy of safety that is built into the plant is really very impressive.

When we are dealing with nuclear fuels and the effects that they can have on people and the environment. If, in fact, there is an accident, how do we deal with the human equation? How do we get a feeling of confidence and assurance that these things are 100 per cent safe?

Mr. Andognini: The training required to work at a nuclear facility is very, very extensive. You have to have fundamental training on radiation protection and operations and in maintenance procedures. The programs are very proceduralized. The procedures are prepared and independently reviewed before they are put into operation. All the work processes are controlled.

For instance, it takes about four years for an individual to obtain a licence to operate one of the nuclear reactors. The program for obtaining a licence is a very extensive and very demanding one.

All the programs are proceduralized and reviewed. Quality controls are placed on them. There are independent checks by regulators and by independent forces within the utility, as well as by external forces. There are several reviews going on constantly, not only of the performance, but of the procedure and of the personnel.

Senator Christensen: You were saying that the CANDU is one of the safest reactors in production and you spoke of the economic benefits of selling it overseas. Do you have any concerns about the regulatory regimes that manage these reactors once they have left our country?

Mr. Andognini: I very much do, and I can give you an example of that. For example, India purchased a CANDU reactor many years ago. They have since then designed and built several of their own reactors. I am somewhat concerned because they do not belong to the World Association of Nuclear Operators. That bothers me because anything that happens anywhere in the world will reflect not only on CANDU reactors but on all reactors.

Senator Christensen: Is there any way that that can be overcome?

Mr. Andognini: I think the World Association of Nuclear Operators is working very hard to get that under control. They visit the plants around the world and do an assessment similar to the assessments that are done on the plants in North America. They meet and have exit visits with executive management, so that executive management is fully aware of what is going on. They go to the board of directors so that they understand what is going on.

They have met in Russia. They have been to China. They built a team not just from people within the United States or Canada; they take members from all over the world. When they came to evaluate the plants in Canada, they had members from Russia and Japan. The team that does these assessments is highly experienced and highly trained. That is one of the major steps that is being taken now to control that throughout the world.

Senator Christensen: We saw where the spent fuels are stored in the large refrigerator boxes, and we were impressed with the relatively small amount that was there --

Mr. Andognini: Do you mean dry storage?

Senator Christensen: Yes -- given the number of years that the plants had been operating. I know that long-term, permanent storage is a major problem. What are your feelings? Is the storage that is now being used something that could be continued to be used?

Mr. Andognini: This is an issue around which there is some debate. Some people believe that dry storage is a long-term way of handling nuclear fuel; others believe in a deep repository in the ground.

In the U.S., it is not a technical issue; it is a political issue. The same goes for Canada. It is not a real technical issue. Technically, it can be stored above ground in those dry storage containers permanently, and can be monitored. It can be stored underground, permanently and monitored. The technical issues have been resolved. It is a political issue.

Senator Christensen: Is there any research ongoing for the use of those materials so that they may be used in other areas?

Mr. Andognini: Do you mean the materials in the fuel?

Senator Christensen: Yes.

Mr. Andognini: The French still reprocess nuclear fuel. The U.S. did it for a few years, and then they shut it down because you must control those fusion products since some can be used for warfare.

It is a very expensive and extensive process right now. The cost does not have a cost-benefit particularly to a CANDU reactor because it uses natural uranium. Canada has most of the natural uranium in the world, so it is not economically feasible to reprocess the fuel.

Senator Taylor: I have a question arising from Senator Christensen's question. Should we be selling reactors to countries that do not join or agree to join or are part of the world association?

Mr. Andognini: I cannot make that decision for Canada. I can tell you that the reactors currently being sold by Canada are to countries like China and Korea, which are part of the World Association of Nuclear Operators. I have been to Korea twice for Canada. I have been to China. Most recently, I was in China -- approximately three weeks ago. They are monitored by the world association. The only one that is not, of which I am aware, is India.

Senator Taylor: It seems to me that we should not sell to a country that is not monitored.

Mr. Andognini: I agree with you. That sale occurred many years ago.

Senator Buchanan: This may have nothing to do with Canada. Over a 13-year period, I participated in the Conference of New England Governors and Eastern Canadian Premiers. Through the late 1970s and early 1980s, the big discussion with the New England governors was Seabrook. You are well familiar with Seabrook.

Mr. Andognini: I am.

Senator Buchanan: On the New Hampshire side were Governors Thomson, Sununu and Gregg, and on other the side was Governor Michael Dukakis. It was interesting to listen to them discussing it. Even with the Canadian premiers present, they could not avoid getting into a discussion. Michael Dukakis was saying that they would have to put some kind of wall between Massachusetts and New Hampshire to stop the radiation from coming. It was a real battle, as you recall. We had no difficulty with what was going on there, even though New Hampshire was not that far from New Brunswick or Nova Scotia. We saw no problem with it.

As I understand it, although I have not been a participant since 1991, there has been no difficulty with Seabrook. It came on stream in the mid-1980s. As far as I know, Seabrook has been operating well, although back at that time the shareholders were wild because of the additional costs. There are no problems with Seabrook, are there?

Mr. Andognini: The only problem with Seabrook was a cost issue. They originally started out to build two 1100-megawatt units. They got the second unit about half or two thirds completed, and decided to cancel it, so they had all those costs bearing into the construction costs and generation costs of unit one. Seabrook has been a reliable energy source. It is well run and well managed; it is doing very well.

Senator Buchanan: That is what I understood.

The next question has to do with the Point Lepreau reactor in New Brunswick. Are there any difficulties there at the present time?

Mr. Andognini: I cannot tell you because I have never been to Point Lepreau. I am close with the people at Point Lepreau. They have been advised of the assessment that we conducted and the results of the assessment. We have offered all of the corrective action programs, new procedures and new programs to them, at no cost, and the same with Hydro Quebec.

Senator Eyton: Thank you for being here. The discussion is very interesting. You made a number of observations and comparisons. Would you take a minute and tell us something more about your own training and experience? You acknowledged that you were a nuclear man. How broad is your experience, and have you had experience with other forms of power generation?

Mr. Andognini: The answer to your latter question is yes.

I studied mechanical engineering. I have a masters degree in nuclear energy from MIT, Massachusetts Institute of Technology. I got it through operating their research reactor, prior to the operation of the Yankee Rowe reactor, which went critical in 1960. I graduated from college with a B.Sc. in 1958. I was through all the construction and start-up of the Yankee Rowe reactor, which was the first commercial reactor in the U.S. I had the start-up responsibilities for the Connecticut Yankee reactor, which was the second commercial pressurized water reactor in the United States. I had the start-up responsibilities for the Vermont Yankee and the Maine Yankee plants, and then went to work at Boston Edison, with responsibility for operation and engineering of their nuclear unit, the Pilgrim station. From there, I went to work at Arizona Public Service, where I had responsibility for all forms of generation, plus transmission, and the start-up of the three 1200-megawatt Palo Verde units.

From there, I went to a troubled plant in Sacramento called SMUD, Sacramento Municipal Utility District, the Rancho Seco plant. The plant had been shut down for 18 or 20 months by the regulator, for some problems. We put a corrective action program together and built a team, and were able to turn that around and restart the reactor under budget and within the schedule that we built. From there, I went into the consulting business for awhile, and then went back to another utility. And then I went to work at Ontario Hydro. I was a member of the team after the Three Mile Island incident that formed the Institute of Nuclear Power Operations, and I was on the first board of directors of that organization.

Senator Eyton: What is your exposure to other forms of power generation?

Mr. Andognini: At Arizona Public Service, we had gas plants, coal plants, oil plants, and even, believe it or not, in Arizona, two hydro plants.

Senator Eyton: That is certainly extensive. About halfway through, I was prepared to say it sounded very good.

Mr. Andognini: The two hydro plants were not very large. One was a megawatt and the other was half a megawatt, but they are hydro plants.

Senator Taylor: Where did you find that much water in Arizona?

Mr. Andognini: In northern Arizona, this is water that came out of the ground. The plants were built in 1909 and 1911. The water comes out of the ground and has, for the last 100 years, the same mineral content, the same temperature, the same volume. As a matter of fact, they are shutting both of those plants down now to make it a national museum for that water resource.

Senator Eyton: In your remarks, you talked about performance indicators. Would you elaborate on that? What are the principal criteria, and what is their relative weighting?

I raise that because your charts show that the nuclear organization rates Ontario at the end of 1999 at 81 per cent, against an average of 88 per cent. It is a running scale, but an average is only an average. There would be some operators in North America that would have numbers like 81 per cent or less, but the others would be truly excellent. Perhaps you could comment on who they might be, as well.

First, what are the principal performance indicators and the relative weighting?

Mr. Andognini: Unit capacity factor is one of the performance indicators. It is calculated on a two-year rolling average. In other words, if you have a high performance for one month, or one year, it does not immediately bring that average up because it is calculated on a two-year rolling average.

Others include: industrial safety accident rate; collective radiation exposure; chemistry performance, which is extremely important in a reactor, to ensure that there is appropriate and proper chemistry; fuel reliability -- in other words, fuel failures; thermal performance, which is how well the unit is performing; availability of emergency AC power, a backup in the event that something goes wrong; reliability of the auxiliary feedwater system; availability of the high-pressure injection system, which is used in case of an emergency, calculated, once again, on a rolling average; unplanned automatic scrams, or trips, of the reactor, calculated on a two-year rolling average.

The last parameter is unplanned capability loss factor, which measures how well you operate within the time of your cycle and how many outages you have. If you have a lot of outages, it detracts from your performance indicator.

I will give you some numbers on performance results for Ontario Power. Regarding industrial safety accidents, Ontario Power Generation, at the end of 1999, received 4.7 points out of 5 points. On collective exposure, on two-year rolling average, 8 points out of 8 points. On chemistry, 5.9 points out of 7 points, and that is because of some problems with the condensers. Those problems are being addressed currently. On fuel reliability, 7.8 points out of 8 points.

For thermal performance, we got 1.1 points out of 6 points. The reason for that is that we have terrible zebra mussel problems on the intake structure, which causes the water not to be able to get into the condenser and not to be able to cool. At Darlington, we removed several thousands tonnes of zebra mussels on the intake structure. That impacts thermal performance.

On fuel reliability, we scored 7.7 points out of a possible 8. On emergency AC power, we scored 9.3 points out of 10 points. For auxiliary feedwater, we got 9.6 points of out of 10. On the high-pressure injection system, we got 9.4 points out of 10 points. For unplanned auto trips or scams, we got 8 points out of 8 points.

We had problems with unplanned capability loss. It is on a two-year rolling average, so we cannot improve immediately; we will have to work it out over two years. On that indicator, we got 4.8 points out of 12 points.

Those numbers are rolled together and calculated. We received a rating of 81 per cent.

Senator Eyton: There is a lot of weighting in that scale?

Mr. Andognini: Yes, but its weighted the same for all plants. Thus, if you compare a plant here to one elsewhere, they are compared on the same basis and at the same scale.

Senator Eyton: You used the term -- I thought it was a term of art <#0107> "minimally acceptable." That was defined as the percentage of 81 for the end of 1999. I assume that "minimally acceptable" can be translated into a percentage. What would that be today? How far away are we?

Mr. Andognini: No, that is not the way it goes. These terms were developed by the Nuclear Regulatory Commission in the U.S. based on years of studies and years of conducting analysis of data at the plant. They categorize them in several groups. "Excellent" is performance that exceeds industry standards, that is, world-class operation. "Satisfactory" is performance that meets most industry standards. "Below standard" is performance that is below standard and generally produces desired results." Minimally acceptable" is performance that is substantially below industry standards, but it is safe to continue operation. " Unacceptable" is performance that is not acceptable, and nuclear safety is compromised. "Unrated" is insufficient data available to assign a rating. Those are the ratings that occur, and those are the systems that we use to rate the plant.

You are asking me, what would I rate the plant today?

Senator Eyton: I was trying to put it on a scale. However, from what you have just said, it seems that, when you are talking about minimally acceptable, it is more geared toward safety and safety considerations, as opposed to performance indicators reflected in the 81 per cent.

Mr. Andognini: That is correct. We did not look at power operation when we did the assessment; we looked at safety and how the plants were operating. Studies have been done, throughout the U.S. and the world, that clearly conclude that the safest plants are also the most economical plants.

Senator Eyton: I will put it another way: If the performance indicator on your mathematical scale rated a 50, would that be minimally acceptable?

Mr. Andognini: If you got below 50, you would be on the unacceptable scale.

Have I answered your question?

Senator Eyton: In general, you did by discussing the two different scales. At some stages you take both into consideration, and both would be telling you the same thing.

Mr. Andognini: That is the difficulty of it. We operate on many scales, and it is not clear. We have not done a good job so that the public could understand what we are doing. The nuclear industry was started many years ago by engineers, who thought they knew everything and knew how to do everything. We found out soon that we did not.

There is a massive program -- headed up by Mr. Dicerni, who is with me here today -- at Ontario Power Generation, to improve communications with the public. The minute you talk to someone about nuclear power, it is easy to say it is unsafe. The minute that I try to convince that you it is safe, I have to get a smidgen technical; the minute I get technical, I turn you off. That is the difficulty of it.

Senator Taylor: Along the line of Senator Eyton's questions, on the top of page 5 of your brief, you say: "Progress has been made -- however, there is still a lot of work to do to become world class." I do not really understand that.

Mr. Andognini: I indicated that the definition for excellence is performance that exceeds industry standards -- in other words, world-class. That is where I get the term "world-class".

Senator Taylor: In other words, that is what we are aiming for. Are there any countries that are "world-class?"

Mr. Andognini: Oh, yes. I should have brought the curve with me, but I did not. I could supply it later. It would show you all of the North American plants with their performance indeces. It is broken into quarters. World-class operations are in the top quartile, and there are a lot of plants in the top quartile.

Senator Taylor: What goes into making that assessment? Senator Eyton seems to have pointed out that it is not the cost of the power or the efficiency.

Mr. Andognini: It is all those things that are indicated on this curve. All of those combined are what make up the performance indicator. It is not just safety, and it is not just cost, and it is not just power production; it is all of them.

Senator Taylor: In looking at the pie graph, the weighting for each category seems to be almost equal. Am I correct?

Mr. Andognini: No. Industrial safety accidents have nothing to do with equipment. That refers to the safety of individuals.

Senator Taylor: Do you mean human error?

Mr. Andognini: No. I would not say that is human error. That is how many industrial accidents have occurred. They are rated on a system -- have the employees been hurt? That is the industrial accident rate. That is not nuclear.

Senator Eyton: You were asked to be brutally frank about the nuclear organization. When you look at those findings, they are really quite devastating. It is lovely to hear you have world-class facilities, but the comments about the management and the operators are very tough.

You did not say today, and perhaps I have not heard in recent times, but there was always some suggestion that some of that came because the nuclear organization within the Ontario Power Generation was kind of isolated, separate, and ran on its own. Is that still the case today or is there good integration with the OPG as it is now? I recognize that OPG is going through an evolution and a change. Is there good integration and good accountability within the organization encompassing the nuclear organization? Has that changed in recent times?

Mr. Andognini: Major improvements have been made, not only in terms of internal dealings within OPG but in external dealings with the Institute of Nuclear Power Operations in Atlanta, Georgia. We have sent individuals down there to work. We participate in their programs. They have a CEO conference every year. Our CEO has attended. They have plant manager meetings and engineering meetings. We actively participate in all of that. We send people there to participate, learn and train. Major improvements have been made in that arena in the last three and a half years.

Internally, there are better communications than in the past.

No matter whether we are looking at a fossil plant or a coal plant, there has always been a difference between whether you worked at the plant or whether you were downtown. The minute you left the plant and went downtown, you were one of the downtown guys. There are some words that I cannot use here that they use for that type of move. That has been the case in both fossil and nuclear.

Gene Preston is working very hard to integrate the engineering organization with the operating organization, so that they become one. There is a massive amount of work being done in that arena.

Senator Eyton: I was looking at the accountability part of that integration.

Mr. Andognini: We also went to the requisite organization, so that all jobs from the top to the bottom have been completely delineated as to responsibility, authority, accountability and requirements. Every one of those jobs has been done. When we got there, we found different job descriptions at Darlington when compared with Pickering and Bruce. They are all standardized now. They are all the same. They have all been delineated in terms of accountability, authority and educational requirements.

Senator Kelleher: I have a couple of questions that do not deal directly with your responsibilities at Ontario Power Generation but which you may be able to shed some light on. With respect to CANDUs that we sell abroad, do you know if we attach operating conditions to the sales of those units?

Mr. Andognini: I can only give you a very limited amount of information on that point. In the past, an extensive number of personnel were trained at Ontario Hydro. Some of these Ontario Hydro licensed personnel were sent to Romania, for instance, to train and to start up the reactors.

In the case of the Chinese, they have a number of people being trained at Hydro Quebec. We have provided some training material to the Chinese. However, in all cases, AECL either helps to provide or gets a utility to provide training to those utilities.

Senator Kelleher: Once we do the initial break-in training, if you will, do you know if AECL, or whoever is the responsible body, continues to monitor operations after they are operating satisfactorily?

Mr. Andognini: Yes. Last fall, I went to Korea to look at the operating units there. They have people monitoring those full time, at no cost to the Korean utility. That data is available. All the information is gathered on the CANDU reactors. There is what is called the "CANDU owners group," which is made up primarily of Canadian utilities. It has now been extended. The group includes the Chinese, the Koreans, the Romanians, the Canadians, and the Argentineans. They share their operating experiences. As an organization, we are monitoring what happens in all of those reactors. That data is shared with everyone. If an abnormal occurrence or problem arises, if a bearing fails or a pump fails, at any one of those utilities, all of them find out about it.

Senator Kelleher: I trust that we have built that cost into the initial sale price, have we?

Mr. Andognini: No. That cost is incurred by the utility.

Senator Kelleher: Do they pay for our work?

Mr. Andognini: The CANDU owners group is an organization in itself that is funded by the utilities. AECL participates, but it is really run by a separate organization. It has a separate president. It takes all of that data, consolidates it and supplies it to all of the utilities.

Senator Kelleher: Do we pay part of that cost?

Mr. Andognini: Yes, in your electric bill, you do.

Senator Adams: We are paying very high rates for electricity up in the Arctic when compared with what people in Ontario are paying.

Are you looking at any other resources outside nuclear power facilities? I know there are new and different technologies coming out all the time. Do you have a forecast in this regard? Right how, there are new light bulbs coming out.

Mr. Andognini: Are you asking about fission, sir?

Senator Adams: Yes.

Mr. Andognini: As a matter of fact, I am very involved with that, on the president's behalf. There is an organization called ITER Canada, which is the fusion organization very actively involved in getting a fusion facility here in Canada. There is an international council for ITER throughout the world. The only real competition for getting that test facility in Canada is from the Japanese. However, the Japanese have had some troubles with their facilities. They had an inadvertent criticality in a fuel- processing facility. They have not been forthright with some of the information that they have given in the past on the operation of their plants. I think Canada has an excellent opportunity to bring a very critical energy supply source and research facility to Canada. Canada is working very hard on that right now. There is some work going on in the U.S. at some of the universities, but it really needs a major facility. There is engineering work going on for it right now in several parts of the world to support this program.

Senator Adams: As cities grow up we look to the future in terms of power generation. What do you see in terms of future energy demands in Canada? For example, are the people at General Electric or Westinghouse looking at ways to reduce energy consumption by developing light bulbs that use less wattage?

Mr. Andognini: There is a lot of work going on to conserve energy -- more efficient light bulbs and refrigerators and things of that nature. The law of supply and demand is still what controls the industry.

I can only talk you to you from my personal experience. I have worked in fossil plants and in nuclear plants. My future would depend on building nuclear plants. If I had anything to say, I would say to go to nuclear. If you go to gas, you can get a gas combined cycle plant. The going-forward cost to bring four units back to Pickering is about 2.6 or 2.7 cents per kilowatt. A combined cycle gas burning plant is about 4.6 cents per kilowatt. I am not sure of the availability, long term, on large volumes of gas, and it is also not as clean as nuclear because it does emit some things. If I had to choose whether to site my family close to a nuclear plant or a fossil plant, I would, ten to one, choose a nuclear plant.

Senator Adams: We went through there about a week ago. That was the first time that I had heard about Pickering for approximately 20 years. The first time we went there, we were satisfied with the operation. The only problem was that it takes 10 years to cool off the spent fuel.

Mr. Andognini: The technology is available to handle spent fuels safely, sir. It is a proven technology in the U.S. It is a technology that has even been proven in Canada to be safe, but it has not been accepted by the public. The technology is there.

Senator Adams: How long have the copper tubes been operating? Has it been over 20 years?

Mr. Andognini: Those condenser tubes started in 1970 something, I believe. I do not mean to be facetious or vindictive, but if you are looking at what copper goes into the water, you should look at how many boats are in the water, because every boat has a anti-fouling paint on the bottom, and 70 per cent of it is copper. It is reapplied every two or three years. The copper put in by the condenser tubes at Pickering station is very small compared to the boating industry.

Senator Adams: Would stainless steel last as long?

Mr. Andognini: Either stainless steel or titanium. They can use either. Both are long term and do not have copper in them.

Senator Cochrane: Thank you for attending today. I appreciated the tour at Pickering. Your people were very kind and very informative.

Mr. Andognini: Good.

Senator Cochrane: What is your relationship with the AECB board? While we were there, we noticed that the AECB are set up permanently within your facility. Am I right?

Mr. Andognini: Yes. That practice was started after the Three Mile Island incident in the U.S. The regulator was concerned about what was going on in the utility and put inspectors permanently at the site to monitor all the performance, the day-to-day operation, people, procedures, implementation, safety and everything. It is a program that was adopted here in Canada. There are what they call senior resident inspectors and a staff of two or three people at all the nuclear stations in Canada and all the stations in the U.S. It is like having a traffic cop in your own home.

Senator Cochrane: You did mention some refitting and having to replace something. You mentioned fire prevention or something. If they have to replace something, you mentioned that it takes awhile, and then you have to wait for approval from the AECB. Would you elaborate on that, please?

Mr. Andognini: In my opinion, and this is my personal opinion and no one else's, the regulator in Canada is in line in management's position. When you take a system out to repair it, whatever the system is, whether it is an electrical system or a water system, and you make the repairs, you need the regulator's approval to put that system back in operation.

Senator Cochrane: You have some of them right there, do you not?

Mr. Andognini: You have them right there watching you all the time. Again, in my opinion, when you do that, you are taking away from line management the responsibility associated with ensuring that that is okay because you have the regulator telling you it is okay. You really should leave it to the utility to determine whether it is safe or not. If it is not safe, then the regulator can stop it at any time.

Senator Cochrane: Does the regulator not come in after the job is done?

Mr. Andognini: He is there before, during and after.

Senator Cochrane: So things should be okay.

Mr. Andognini: That is just a pet peeve of mine. That does not mean that it is wrong. It is just the way that I am accustomed to working.

Senator Cochrane: Tell me a little bit about privatization. I understand that the Bruce plant may be privatized.

Mr. Andognini: You are asking the wrong man. Mr. Dicerni can address that.

Senator Cochrane: Tell me where we are going with regard to privatization of these nuclear plants.

Mr. Richard Dicerni, Senior Vice-President, Corporate and Environmental Affairs Corporate Secretary, Ontario Power Generation: Some months ago, the company canvassed investors to determine if there was any interest in pursuing what we call private-public partnerships regarding the Bruce units. A number of companies have indeed come forth and expressed an interest in taking over the management and the running of these plants. We are in discussions with them. We obviously, for commercial purposes, have confidentiality agreements with various interested parties, but we were very pleased to note that there were quite a few companies that were interested in coming in and, shall we say, investing in the CANDU technology.

Senator Cochrane: Are we just talking about the Bruce plant?

Mr. Dicerni: No, the four that are operating, and Bruce A, which, as Mr. Andognini mentioned, has not been operating for awhile. It has been laid up. It is the whole site.

Senator Cochrane: Who approves the buyers? We are talking about nuclear energy here.

Mr. Dicerni: There will be a fairly rigorous process in regards to the next steps. It has to go through our own board of directors. They must be comfortable and confident that the new investors would be able to do a good job. Our shareholder, the Government of Ontario, must also sanction this. Lastly, the AECB must also grant a licence to the new operator. Anyone who purchases, leases, what have you, these plants must go in front of the AECB and obtain from the board an operating licence, just like we would for any of our other plants. There will be a fairly rigorous process, both in terms of financial due diligence as well as safety, to ensure that the new owner-operators meet all of the appropriate standards.

Senator Cochrane: Are you satisfied now with the progress that the Pickering plant has made? You were mentioning, Mr. Andognini, some of the earlier problems. Are you satisfied now that we are where we want to be?

Mr. Andognini: We are in a position, in my opinion, where we can move forward and safely return the Pickering A units to service. A great deal of thought has gone into that. It has been reviewed independently. It has been reviewed by executive management. It has been reviewed by the board on several occasions. To move forward is a major investment by Ontario Power. It is a $1-billion investment to put those units back on the line. It is a very clean, reliable and economical energy source.

Personally, I am quite comfortable in moving forward. We have achieved enough in the management systems, programs and procedures to move forward and put those units back on the line.

Senator Cochrane: That is in safety as well as the production aspect.

Mr. Andognini: Yes.

The Chairman: When we were at Pickering, I asked about the difference between the Pickering A plant, which is being re-tooled, and the latest CANDU technology. I understand that all of the CANDU reactors have two independent shut-down systems. However, the message that I heard about Pickering A is that there are not two independent, fast, shut-down systems; that, in fact, there is only one, but there is a separation of the indicators. I would like to have clarification on that, from your perspective.

Mr. Andognini: There are not, currently, two independent shut-down systems available at Pickering A. However, the equivalent of two independent systems is being installed. This installation is part of the regulatory requirement before those units return to operation.

The Chairman: It was indicated that there were not two independent, fast, shut-down systems.

Mr. Andognini: There is the equivalent of two independent shut-down systems.

The Chairman: That is, I understand, equal to the latest in terms of safety for the new CANDU reactors.

Mr. Andognini: I am not able to give you the engineering analysis of that. If you specifically want that question answered, I would have to solicit someone more knowledgeable about safety systems to provide a proper response.

The Chairman: That would be fine. Perhaps we could get that information in writing.

Mr. Andognini: I would be happy to comply.

The Chairman: My second question is with regard to the environmental assessment.

I understand that it was at your suggestion that the peer review of the scope of the environmental assessment was done with a group of scientists for the City of Pickering. They recommended an independent panel with public hearings.

Mr. Andognini and Mr. Dicerni, what are your opinions on that?

Mr. Andognini: Are you asking for my personal view.

The Chairman: Yes.

Mr. Andognini: My personal view, based on my 42 years of experience in nuclear power plants, is that environmental assessment is not required, or necessary, to return those units to service. Those units were not shut down; rather, they were laid up with the fuel in them, while we took appropriate corrective actions to bring the standards of those operating units back to a satisfactory level. I believe that we should be able to bring those units back safely, purely and properly monitored by the regulator.

The Chairman: Thank you.

Senator Christensen: The environmental assessment on Pickering A was done independently. In your presentation, you alluded to how poorly public relations has been handled in dealing with the public, because the engineers feel that they are always right. Would there be any benefit if that were done for the comfort level of the people and the groups in the area who have these concerns?

Mr. Andognini: I cannot answer that question, because I do not know the people in Canada. I speak with more American experience, and I do not think it is fair of me to address that. Mr. Dicerni may want to respond.

Mr. Dicerni: There are a few things. I was Minister of the Environment for Ontario for three and one half years, so I know a bit about environmental assessments and matters. The environmental assessment that we have done at Pickering is pretty significant. We will be releasing that report to the AECB shortly.

The Chairman: Are you talking about the scope?

Mr. Dicerni: No, I refer to the environmental assessment that is currently underway.

Senator Christensen: I do not want to interrupt you, but it is the point of public relations. I am not questioning the assessment but, rather, consideration of the comfort level of those who have major concerns because they are living near the facilities.

Mr. Dicerni: Some people will never be satisfied, no matter what we do.

Senator Christensen: We do know that.

Senator Buchanan: Are you familiar with the only tidal power plant in North America, the one with the largest low-head, straight-flow generator ever installed in North America, in the Annapolis Valley, Nova Scotia?

Mr. Andognini: No, sir.

Senator Buchanan: I invite you to visit it sometime. I opened it with Prince Charles. It is one of the marvels of the world.

Mr. Andognini: Is it similar to that which was going to be built in Maine?

Senator Buchanan: No. This is on the tidal system in Annapolis Basin. The big one was to be in the Bay of Fundy. New York Power Authority and New England Power Pool were promoting it, but it got lost in the shuffle.

The Chairman: I wanted to ask you, Mr. Andognini, about the solid oxide fuel-cell project. Maybe we can do that at another time, or perhaps we could get the written material from you.

Thank you, gentlemen, for your attendance here today.

Honourable senators, we have two motions before us that we need to address. The first relates to inter-basin transfers -- dealing specifically with Manitoba, but affecting the water system in general. I would ask Senator Taylor to move the following motion:

That the honourable Senators Kenny and Spivak be authorized to travel to Washington, should it be necessary, to meet with their counterparts and relevant authorities to address the inter-basin water transfer issue.

Senator Taylor: I so move, honourable senators.

Senator Spivak: Is it agreed, honourable senators?

Hon. Senators:Agreed.

The Chairman: Carried.

Senator Taylor: In respect of Bill S-20, to enable and assist the Canadian tobacco industry in attaining its objective of preventing the use of tobacco products by the young persons in Canada, I move that it be referred to this committee, and that the committee set aside 12 to 16 hours in the months of May and June for the purposes of such study, should it be referred to this committee.

Senator Kenny: I apologize to the committee for being late.

Briefly, the bill, as was described in the motion, should probably go to the Social Affairs Committee. I undertook discussions with the chairman of that committee, and their line-up with government legislation, which, by tradition, takes precedence, will take them through until June.

That committee also has a study for which they received the approval of the Senate some time ago; they have not had a chance to do any work on that study at all. As you can see, Senator Kirby would sooner not deal with the bill.

The same applies to the Standing Senate Committee on Legal and Constitution Affairs. That committee probably has the heaviest load of government legislation of any of the committees; the likelihood of them being able to address the bill prior to the summer recess is virtually nil.

I know that there is some interest in the subject by members of this committee. It does relate to the environment aspect of the committee's mandate. In discussion with your steering committee, there seems to be some support for addressing the bill at the steering committee level, but the question is whether there is any support amongst members of the committee to address this bill.

I am inquiring now if there is support to address the bill. I would be pleased to deal with any questions that members might have.

The Chairman: Are there any questions?

Senator Kelleher: What impairment, if any, would this have on our study of nuclear safety?

The Chairman: It would not have any impairment. We have some free slots. The important legislation that is coming before our committee is stalled in the Senate, I think until the fall, or perhaps till June.

You understand that legislation always takes priority. This is a piece of legislation from the House, and I think that we can manage it.

Any further discussion?

All in favour?

Hon. Senators:Agreed.

The committee adjourned.