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Report on Business Ontario Power Generation CEO takes hands-on tack to Darlington overhaul

Jeffrey Lyash, president and CEO of Ontario Power Generation Inc., is photographed while on a tour of the Darlington Nuclear Generating Station.

Carlos Osorio

Jeff Lyash watches on a monitor as a crew installs fittings on pressure tubes during the massive refurbishment project at Ontario Power Generation’s Darlington nuclear plant. The OPG chief executive listens intently and nods approvingly as Brent Madden, the shift supervisor, explains how the workers retooled their welding machine to get at hard-to-reach spots more efficiently.

This is Mr. Lyash’s world. A mechanical engineer who once worked as an inspector for the U.S. Nuclear Regulatory Commission and as project manager on a number of major reactor jobs, he likes nothing more than to engage in the problem-solving conversations that occur every day on one of Canada’s largest energy infrastructure projects: the 10-year, $12.8-billion refurbishment of four Candu reactors at Darlington.

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However, after Mr. Madden’s quick update, Mr. Lyash moves on. As CEO, his job is not to engage in the minutiae of the revamp, he tells a visitor. Rather, he aims to engage with OPG’s project team as well as suppliers and contractors at the site to ensure his leadership group has what is required to get the job done on budget and on time.

So, he travels most Fridays from OPG’s headquarters down the street from the Queen’s Park legislature building to the sprawling nuclear complex on Lake Ontario east of Toronto, where he dons his steel-toed boots, safety goggles and hard hat, and makes his presence known.

“Internally, I tend to focus my day looking at leadership, strategy and culture because those three things go hand in hand,” he said during a walk-through of the Darlington plant. “The key is making sure you’ve got highly competent, high integrity, transparent and engaged leaders aligned around a strategy, and build the culture you need to implement that strategy.”

According to Mr. Lyash, the Darlington project is currently on time and on budget with work on the first unit 70 per cent completed.

Carlos Osorio

Since taking the position at OPG in 2015, Mr. Lyash has had one overriding priority: deliver on the Darlington megaproject. The company’s performance at Darlington will have consequences beyond its provincial owner and electricity customers. Canada’s nuclear industry needs a success story to carry it into the future as the need for low-carbon energy to combat climate change bolsters the case for atomic power despite continuing concerns about safety and radioactive waste.

Clearly, Mr. Lyash has other challenges in running the company that supplies Ontario with nearly half its electricity. Premier Doug Ford was elected last June on a platform of cutting electricity costs and has made it clear he is willing to intervene in the provincially owned business to deliver on that promise; while the corporation’s unionized employees recently rejected for a second time a contract deal reached by their negotiators, legislation was passed by the Conservative government before Christmas that prohibits them from striking. This fall, Mr. Lyash completed a US$298-million acquisition of a U.S. renewable energy firm, and struck a deal to support the developer of new reactor technology.

His biggest stumble has come in dealing with the new Ford government over OPG’s hiring of Alykhan Velshi, a former chief of staff to former Progressive Conservative leader Patrick Brown and interim leader Vic Fedeli, who is now Mr. Ford’s Finance Minister. Mr. Velshi was recruited to serve as OPG’s vice-president of corporate affairs and community relations, but was quickly terminated after the premier’s chief of staff, Dean French, personally reached out to the head of the board to have him fired, The Globe and Mail reported in November.

The CEO would not comment on Mr. Velshi’s hiring and firing, characterizing it as a personnel issue. Still, the matter left him looking vulnerable to political interference, despite the Premier’s insistence that the Crown corporation is responsible for its own staffing decisions.

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However, Mr. Lyash is determined not to lose his focus on Darlington.

The job involves pulling all 480 pressure tubes out of the reactor, inspecting them and, where necessary, refurbishing them. At the same time, OPG replaces many of the associated parts – turbines, piping and generators – that transforms the heat generated in the reactor to electricity. The Darlington complex provides one fifth of the province’s power supply.

The nuclear sector’s record on refurbishments in Canada is not a happy one. The former federally owned Atomic Energy of Canada Ltd. ran three years late and $1-billion over budget in retooling New Brunswick Power’s Candu reactor at the Point Lepreau power station, while Ontario’s Bruce Power ran $2-billion over budget when it refurbished two mothballed reactors at its facility on the shores of Lake Huron. The industry now faces an enormous task in refurbishing not only the Darlington units but six reactors at the Bruce plant, with much of the work running simultaneously when the job at Bruce commences in 2020.

At 57, the Pennsylvania native offers no guarantees he’ll still be at the helm when the Darlington work is completed, a date scheduled for the first quarter of 2026. He has strong ties to the United States with a vacation home in the Wasatch Mountains in Utah; two adult children and nine grandchildren in North Carolina; and a number of board positions as well as the chairmanship of U.S.-based Electric Power Research Institute.

However, his legacy will only be fully apparent by the middle of the next decade when OPG’s six reactors at the Pickering nuclear station are scheduled to be shut down permanently, and Darlington is set to be fully returned to service.

The 10-year, $12.8-billion refurbishment of four Candu reactors at Darlington is one of Canada’s largest energy infrastructure projects.

Carlos Osorio

At this point, the project is currently on time and on budget with work on the first unit 70 per cent completed, Mr. Lyash said. OPG has spent more than $5-billion of the anticipated $12.8-billion cost, and has on the job some 900 of its own employees and 1,500 workers for key contractors such as Aecon Group Inc. and SNC-Lavalin Group Inc. The challenges will increase as OPG begins working on more than one unit at a time, and as Bruce Power starts up its project.

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One key risk is a looming shortage of skilled workers, especially boilermakers. OPG is pursuing a number of strategies in co-operation with Bruce Power to ensure the two companies have the needed work force, including partnering with unions and colleges to reach out to women and minorities for training programs. Mr. Lyash said he approaches that challenge like all others: Eliminate what risk you can, and what you can’t avoid, find ways to mitigate its impact.

The province’s Auditor-General Bonnie Lysyk recently issued a report on the Darlington project that for the most part, commended OPG on its risk management efforts and said its timelines and cost estimates were based on “reliable information and reasonable assumptions.” Mr. Lyash said the auditor – whose staff worked at Darlington over the course of a year in preparing their report – provided valuable feedback for the project management team.

“If you don’t love assessment and criticism, you don’t belong in the nuclear business,” he said. “Because one of the keys to running major projects like this and to running nuclear plants is that you have to seek out every piece of critical feedback that you can get. And you have to treat every piece of critical feedback like a gift, because that’s what it is.”

One strategy that was put in place well before Mr. Lyash joined OPG – but that he has fully embraced – was the decision to build a mock-up reactor that allows workers to repeatedly practice the procedures they will have to perform on the actual unit. But all that practice must be accompanied by a strict adherence to procedures in order to reduce risk of human error, he said.

The CEO drove home that lesson in spades after visiting the mock-up centre and witnessing some safety violations that – while they caused no injuries – had the potential to do so. He called a halt to all work for the day, gathered supervisors and read the riot act, telling them that if they couldn’t meet the project’s safety standards, they needed to leave. A few chose to do so, he recalled.

And while the loss of a day’s work at OPG was unfortunate, it paid off. “If you take the time to get those behaviours right, in the long run you’re more productive. It will save us more than a day," he said.

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