TORONTO - It's like giving the cashier at Tim Hortons a penny to find out how much a cup of coffee costs.
Ontario Power Generation (OPG) has agreed to pay two prospective reactor builders $26 million to come up with an estimate on how much two new nuclear reactors at the Darlington Generating Station would cost, Energy Minister Chris Bentley told a Queen's Park committee Wednesday.
"They reached an agreement with them to prepare the various proposals and estimates, and although I am advised that the specific price between the two is commercially sensitive - they had negotiations with each - the ballpark total price for the two is less than $26 million," Bentley said in response to a question from New Democrat energy critic Peter Tabuns.
The two firms - SNC-Lavalin's now-striking Candu Energy Inc. and Westinghouse - have up to 14 months to deliver their cost estimates, which are expected to be at least $10 billion for two 1,000 megawatt reactors.
At those prices, the Tim Hortons analogy would mean the cup of coffee costs about $1,500.
Paying prospective builders for coming up with a cost estimate is normal practice for massive projects such as nuclear reactors, OPG spokesman Ted Gruetzner said in an e-mail.
"This is common in large projects like this as there is a recognition that firms will incur expenses in order to provide the level of detail we require," Gruetzner wrote.
The province's long-term energy plans have called for the new nuclear generation for years but the process was suspended in 2009 by then-energy minister George Smitherman, who said at the time the cost was simply too high.
Bentley later told the committee the decision to go ahead with the estimates does not mean Ontario is definitely going ahead with construction.
"It does not mean we're committed to new build, it does not mean we need the new generation," he said.
Outside the committee, Bentley said that even though the new reactors are still in the province's long-term plan, it's not certain the province needs the new power. If it's decided the extra megawatts are needed, the government will still have to decide if nuclear is the way to go and which firm to get to build it, he said.
"This is a new approach," different from the procurement process suspended in 2008, Bentley said.
SNC-Lavalin, which bought Candu Energy from the federal government last year, has also won a $600-million contract to plan the refurbishment of aging reactors at Darlington, Ont., another project in the $10-billion price range. Bentley said he had no concerns the Candu strike would affect the project.
"If Westinghouse and SNC-Lavalin reactors are cost-effective, why are Ontario ratepayers being forced to subsidize their marketing costs?" Greenpeace nuclear analyst Shawn-Patrick Stensil asked.
"Both the need and affordability of new reactors should be independently reviewed before this project goes any further."