The Economic Benefits of Refurbishing and Operating Ontario’s Nuclear Reactors February 25 th 2011

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Report Overview The Economic Benefits of Refurbishing and Operating Ontario’s Nuclear Reactors Released in July 2010 – available at cme-mec.ca Nuclear is a critical source of base load electricity supply (55%) Refurbishing aging reactors = opportunity to extend life by years Refurbishment and continued operation of 12 reactors at Bruce and Darlington offers substantial employment and economic benefits to the province – 24,600 jobs per year during refurbishment period ( ) – $5 billion in annual economic activity – Long term operational benefits of 15,600 jobs and $2.5 billion

Report Overview The Economic Benefits of Refurbishing and Operating Ontario’s Nuclear Reactors Released in July 2010 – available at cme-mec.ca Economic impact analysis of refurbishing and operating 8,300 MW of existing electricity generating capacity Nuclear is a critical source of base load electricity supply – 55% of Ontario’s electricity needs Integral part of Ontario’s long term plan – critical component of Integrated Power System Plan (IPSP) Refurbishing aging reactors = opportunity to extend life by years

Report Overview Refurbishment and continued operation of 12 reactors at Bruce and Darlington offers substantial employment and economic benefits to the province – 24,600 jobs per year during refurbishment period ( ) – $5 billion in annual economic activity – Long term operational benefits of 15,600 jobs and $2.5 billion Can be done quickly compared to building new reactors Important to industrial power users also because of the cheapest power sources in Ontario’s portfolio Report considers refurbishment of 10 reactors (not Pickering investment), and operating of 12 reactors: – Bruce A, units 3-4 and Bruce B, 5-8 (1 and 2 currently being refurbished) – Darlington units 1-4

Costs, employment and schedule Estimated capital cost, employment and schedule for one unit using public information Looked at cost estimates at Point Lepreau, Gentilly-2, Bruce A units 1 & 2, Darlington, units 1-4 Average capital cost of $2 billion assumed for refurbishing Bruce and Darlington reactors Breakdown of capital cost: – Engineering: 15% or $300 million – Project management: 10% or $200 million – Equipment and materials: 35% or $700 million – Construction labour: 40% or $800 million – Total: $2 billion

Labour Costs for each Reactor Unit Refurbishment Project component Overall percentage Percentage labour cost Net % - Salary and wages Net salary & wages Engineering15%75%11.25%$225 million Project management 10%75%7.5%$150 million Equipment & materials 35%NA-- Construction labour 40%80%32%$640 million TOTAL100%NA50.75%$1,015 million

Costs, employment and schedule We estimate that refurbishing each reactor will generate 5,500 person-years of employment Based on OPG and Bruce Power estimates Annual cost per employee of $184,500($1,015 million / 5,500 person-years) – includes both salary, benefits and payroll taxes Average annual salary per employee of $92,300 or approximately $47 per hour Assumed average project schedule of 36 months Assumed schedule going from 2014 to 2024

Summary of Refurbishment Scope ParameterEstimated value for one reactor 10 reactors Capital cost$2 billion$20 billion Equipment, materials and supply $985 million$9.85 billion Direct labour costs$1,015 million$10.15 billion Direct employment5,500 person-years55,000 person-years Schedule (duration of physical works) 36 months11 years ( )

Economic Benefits Annual average expenditure of $1.82 billion Majority of equipment to be used in Ontario, e.g. Foster Wheeler, Babcock & Wilcox, GE Canada, Comstock, AECL, Siemens Canada, etc. Estimated 80% of direct spending would take place in Ontario – excluded 20% for imported materials Annual economic stimulus of $1.456 billion (1.82 x 80%) Considered that up to 10% of workforce would come from outside Ontario Also took into account indirect and induced impacts Assumed one job created for each worker employed in refurbishment (2.4 multiplier for labour – 2.1 for industrial expenditures)

Total Benefits of Refurbishment Annual Economic Benefits Direct ImpactSecondary impactTotal impact Ontario employment 4,500 9,000 Labour income$415 million$581 million$996 million Ontario equipment, materials and supplies $716 million$798 million$1.5 billion TOTAL$1.13 billion$1.37 billion$2.5 billion

Costs, employment and schedule for operation 12 reactors – 2012 to 2050 Used current employment levels – 650 employees per unit Used public data to estimate operating costs Looked at direct costs of employment, materials, fuel, operating, maintenance and administration – estimated that 80% of materials and supplies procured in Ontario Took into account shutdowns due to refurbishment