Hydro-Quebec told former Liberal government before election to shut down costly Gentilly II project

Hydro-Quebec informed the former Liberal government of the exorbitant costs of refurbishing the Gentilly II nuclear reactor months before last summer's election campaign but the province failed to tell voters the project was unfeasible.

The president of Hydro-Quebec Thierry Vandal confirmed before a National Assembly committee Tuesday that the costs of refitting the reactor no longer justified keeping it in operation and informed the former Liberal government of his recommendation that it be shut down.

However, before and during the election campaign former Liberal premier Jean Charest kept alive the hope of refurbishing the reactor, insisting he wanted to save the 700 highly skilled jobs at the site. Opponents said Mr. Charest was trying to save crucial votes in the Sept. 4, 2012, election in the Trois-Rivières region where the Gentilly nuclear complex is located.

"We knew before Sept. 4, 2012, that this project was not one that could be financially justified by Hydro-Quebec," Mr. Vandal told reporters. "But our shareholder [the Quebec government] … asked us to keep open the possibility of refurbishing [the reactor], which we did."

The Parti Québécois minority government announced its decision to mothball the province's only nuclear reactor in the weeks after its election. The decision was based on a Hydro-Quebec report that concluded it would cost an additional $3.4-billion to refit the reactor in addition to the $984-million already spent on the project.

The report also noted that when the decision was announced to refurbish Gentilly II in 2008 the cost of producing electricity made it feasible. But since then the market price of producing electricity has plummeted with the sharp increase in shale-gas production in the United States.

It had been estimated that Gentilly II, once refitted, could produce electricity costing between 7 cents and 8 cents a kilowatt hour. At the time the average price for electricity on the open market was 9 cents a kilowatt hour. But cheaper electricity using shale-gas production plunged prices to 4 cents a kilowatt hour. What was once considered a viable project in 2008 became totally unfeasible in 2012.

"We were very far from the break-even point. In these conditions we would have lost $215-million each year with the electricity produced at Gentilly II," Mr. Vandal told committee members.

Hydro-Quebec's information placed the Liberal members on the committee in an embarrassing position. Despite the numbers, Trois-Rivières Liberal MNA Danielle St-Amand defended Gentilly II.

"The decision to close the reactor is an ideological one," Ms. St-Amand argued in accusing the PQ government of ignoring the needs of her region. "Even at 8 cents a kilowatt hour, the reactor could produce electricity at a cheaper rate than wind turbines. We were always in favour of this project."

Minister of Natural Resources Martine Ouellet argued that the former Liberal government was prepared to keep the reactor open regardless of the impact it would have had on Quebec consumers.

"Hydro-Quebec has confirmed that the former Liberal government was well aware that it wasn't economically viable to refurbish the reactor and allowed themselves to be deliberately blind to the information they had. It was completely irresponsible and cheap electioneering to promise to refit the reactor when they knew it wasn't feasible," Ms. Ouellet said.

Hydro-Quebec will prepare over the next 18 months to put the reactor into dormancy. The dormancy period will last until at least 2050 as the used reactor fuel rods will be stored temporarily on site until the federal nuclear waste agency finds a permanent location to store the highly radioactive material.

Mr. Vandal said Quebec was the first jurisdiction in the country to proceed with the dismantling of a Candu nuclear reactor. Mr. Vandal hopes to work with Ontario and New Brunswick to share the technology needed for dismantling once these provinces decommission their nuclear reactors.

"We want to share resources, conduct the best studies so that when we begin work [to dismantle the reactors] that it be conducted in the most secure and least costly was as possible," Mr. Vandal said.