Point Lepreau delayed until fall 2012

The $1.4-billion Point Lepreau refurbishment project is now delayed until the fall of 2012, NB Power said Thursday.

The refurbishment of Atlantic Canada's only nuclear reactor is now three years behind schedule.

The latest delay comes as Atomic Energy of Canada Ltd. has decided it will remove all 380 calandria tubes and replace them.

"Although the calandria tube installation work sequence will take longer to complete than previously planned, it is essential that these activities achieve the required quality standard in order to provide safe and reliable operation for the next 25 to 30 years," Gatan Thomas, the president and chief executive officer of NB Power, said in a statement.

Thomas said later that he could not guarantee that the promise of newly elected Premier David Alward to freeze rates for three years was still feasible.

"This is one of the things we said we would look at," Thomas said. "We have to look at the impact of this delay and do that assessment. We will comment on that later."

Thomas said NB Power would take two weeks to review AECL's new schedule and would make public its findings then.

AECL, the federal nuclear corporation, is now expected to finish its portion of the refurbishment project in May 2012. The project will be turned over to NB Power to complete the remainder of the refurbishment with a target date of fall 2012 for the reactor returning to service.

The delay was first announced by NB Power and AECL after 5 p.m. on Oct. 8, as New Brunswickers were preparing for the holiday long weekend.

Premier Alward said on Oct. 12, the day his government was sworn into office, that he wanted to meet with officials from the federal nuclear corporation.

The project was supposed to be completed in September 2009.

The repeated delays have revolved around the reactor's calandria tubes.

All 380 new tubes were inserted in the reactor between December 2009 and April 2010. But dozens of the tubes flunked air tightness tests after being fused with special inserts designed to hold them in place.

The calandria tubes made to house smaller nuclear pressure tubes, which in turn contain radioactive nuclear fuel bundles were the first major pieces of equipment to be installed in the reactor as part of Point Lepreau's much delayed refurbishment.

It is estimated that NB Power spends $1 million a day to purchase replacement fuel for each day the nuclear reactor is delayed.

The former Liberal government had threatened to sue the federal government for some financial relief related to the refurbishment project's cost overruns.

Prime Minister Stephen Harper has repeatedly indicated the federal government would abide by the contractual obligations when it comes to paying for any delays at the reactor.

When AECL and the New Brunswick government announced the refurbishment and retubing contracts in 2005, those new agreements included penalty clauses if the project ran behind schedule.

The penalty clauses do not cover all of the costs associated with the mounting delays. Before the refurbishment project began, NB Power took out insurance to help cover any unexpected costs.